The current government shutdown brought my thoughts back to a recent Dulles SHRM meeting that I attended where Misti Mukherjee of Jackson/Lewis spoke about Preparing for and Managing Employee Terminations and Reductions in Force. Not knowing how long the government will remain shut down and what the impact might be on the many industries that work with the federal government, I thought it would be beneficial for many of our clients to hear some of the points presented in her well thought out and planned presentation. She brought to mind many things that I know our clients have faced or should consider in advance of needing to implement a workforce reduction. Hopefully sharing some of Misti’s thoughts will help our client organizations review their policy or plan for a future need.
The first point is planning for the regrettable, but sometimes necessary, layoff of employees. Planning ahead for the situation causes the executive leadership to evaluate why the layoff is necessary. Determining whether it is a long term negative impact of a declining economy or a short term loss of a contract will help the leadership strategically plan for the future health of the organization. Planning also ensures that there is consistency in the process and procedure which will help reduce confusion with both the employees being terminated and those left behind. This planning should be preceded by a frank and productive conversation within the executive leadership team of what the company policy will be “if” such a need should arise.
The second point for consideration is developing an understanding of exactly which positions need to be downsized. This understanding helps you to determine not only who will be terminated, but why. It is necessary to identify the reason for termination and determine whether it is due to changing business environment, poor performance or seniority. This knowledge can help you to test for discrimination. Identifying the reason and whether the person is in a protected class can help employees understand that the organization is being fair and consistent across the board. This step can also help the organization prepare a defense for potential discrimination suits.
The final point that I would like to share is determining the legal obligations of the organization for the impacted employees. Leadership should be certain that they understand and consistently apply any contractual obligations and severance policies. Knowing what the organization is legally obligated to provide can help to determine the overall fiscal impact of the process.
These points are for your consideration, but your preparation should not stop there. When facing an unfortunate downturn in business leadership should consult with legal counsel to determine any legal obligations, the worker Adjustment Retraining and Notification Act (WARN) and Severance Agreements and Releases.
Workforce reductions are something that we all hope to be able to avoid. The reality of today’s market is that they are at times necessary. Having given some consideration to what the company policy and procedures will be and working with reliable legal counsel will help ensure that not only are the employees treated fairly, but that the organization is on solid ground and protected.
