Layoff: Process of Decision Making

Subject: Employee Management
Pages: 1
Words: 350
Reading time:
2 min
Study level: Bachelor

If the company has a trade union, this entity should be notified of the decision of layoff. For this, a notification is sent to the trade union at least three months before the forthcoming liquidation of the enterprise. When an organization is about to implement layoffs, the employer is obliged to warn all workers in advance. In this case, the termination of contracts begins with a notice being served to the employees. According to the American WARN Act, companies employing 100 people or more are required to warn them about the closure of production and mass reductions in 60 calendar days (Krolikowski & Lunsford, 2020). The exceptions are strikers, temporary workers, and civil servants. In addition, the law does not apply to situations when less than 50 people lose their jobs at one enterprise, or their number is in the range of 50-499 people but is less than 33% of the employees of this enterprise, as well as when the dismissal is temporary (for a maximum of six months) (Krolikowski & Lunsford, 2020). Severance pay is not expected to be paid to laid-off workers, except for those in whose contracts it is spelled out separately. However, they retain the right to use health insurance for 18 months with the same discount provided to the employer (Krolikowski & Lunsford, 2020). Therefore, it is necessary to notify all employees about the layoff in writing.

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The document is drawn up in two copies. One copy is sent to the employee, and the second, on which the latter signed and indicated the date, remains with the employer. The countdown of two months begins from the next day. If the employee refuses to sign the document, the employer must draw up a particular act about this. The act is signed by representatives of the employer and any other employee. In this case, the course of the two-month period begins on the day following the day of drawing up the act. After two months after delivery of the notification, the employer has the right to issue an order to dismiss the employee of the liquidated enterprise.

Reference

Krolikowski, P. M., & Lunsford, K. G. (2020). Advance Layoff Notices and Labor Market Forecasting. FRB of Cleveland Working Paper, 20(2).