List the factors which determine the layoff.Below given are the factors to be considered when you are planning to lay-off employees:
- Lack of funds – While the enterprise faces a fiscal crunch, the first thing to be scrutinized is the diminution in staff levels.
- Looking for alternatives that abate the sway on employees in regards to their career options, e.g., temporary layoffs, referring them to another company, or freezing the hiring process.
- Looking for transferable employees, i.e. employees to whom you can transfer to any other department provided they are qualified to carry out the job responsibilities in that particular department.
- If you are planning to lay off laborers, you need to give an advanced notice to the acting union especially in those cases where 5 or more laborers from the same unit are being laid off.
- The other important factor that leads to lay off an employee is on ethical grounds, this may include, lying, cheating or stealing in the office premises.
Who determines the positions that should be laid off?When planning to lay-off, it should be a combined decision from the HR department, Department Leadership and the finance department to maintain the employer and employee relation.
- HR Department – HR managers play an imperative role while captivating the pronouncement on which employee should be laid off.
- Department Leadership Input - The supervisor of the employee’s department, his decision on laying off the employees is very critical. As the supervisor is the main analyser of the employee’s performance. And hence while laying off poor performing employees; the supervisors input carry a lot of weightage.
- Finance Department - The department or employee in control of the firm's funds plays an essential role in the decision-making, specifically when the syndicate is cutting redundancy pay checks as part of the layoff. Pecuniary contemplation for laid off employees embraces more than just severance pay. It is then the HR department; supervisors of the department and the finance head consult with each other to discourse the monetary materials concomitant when you think of laying off employees.
What the effect of seniority is in the process of lay off?Senior personnel of your department is the one who is constantly tracking your performance; he is the one who knows your strengths and weaknesses and hence while making decision on which employee should be laid off the supervisors’ decision carry a lot of weightage.
What are the rights of a candidate being laid off?Due to recession hitting the industry, layoffs have become quite common in each and every industry prevalent in today’s time. Many employees are not aware about the rights that can safeguard their interests and welfare till they have a new job in hand. Here are a few of the rights mentioned below:
- Final Pay: Final pay is nothing but the full and final laws applicable. The final payment laws differ from one state to another. The final pay is usually paid off once your employment is over. Usually severance pay is not included in the final pay.
- Severance Pay: Severance pay refers to the amount an employer pays to his employee along with his salary. Severance pay is calculated in accordance with the salary of an employee.
- Discrimination: What is the reason that your boss is laying you off? If the reason is based on your age or health issues you could fight a legal battle against your employer.
When can an employee being laid off expect his final pay check?The payment of the employee is dependent on the type of lay off that he has been offered. If it is a short term lay off, in that case the company is liable to pay him the amount within a time frame of 4 weeks, in-case if the employer fails to do so, and the employee can either ask for his claim or he could report this legally while claiming for the claim.
If the layoff is permanent one, for any reason be it closure of the company or on loss of ethical values on the part of the employee, the company is liable to calculate and pay their till date dues on their last working days.
What is the impact of layoff on following?a. Employee's insurance benefits: Usually the medical insurance benefits ends on the last date of the month that they are being laid off.
For example, if your last day of work is on 1st February, then your medical insurance benefits will end on 28th February. If you want to continue with your insurance benefits, you need to check this out with the insurance regulating company and take the necessary actions as suggested by them.
b. Employee's retirement benefits: The employee stops gaining the retirement benefits once he has been laid off. For example, the amount collected in the Employer’s Provident Fund can be withdrawn or transferred as per the employee’s choice. For this he needs to inform his company on the same and let them know what he will prefer to do with the EPF amount, he want a lump sum cash or wants to get it transferred. If you are approaching the retirement age you can talk to the regulating company for your retirement benefits and you could avail them within a period of 120 days.
Are there any alternatives for lay off?The answer to this is yes, there are many alternatives instead of laying off employees especially in those cases if the layoffs are due to lack of finances within the company.
a. Discussing it out with your employees: Tell your employees that the company is facing a financial crunch and that they should come up with new ideas so that they could cut costs without affecting the productivity of the employees.
b. Cutting extra costs: You could cut down cost by stop hiring people for the time being, reducing the travels of your employees, cutting off their bonuses, etc.
c. Exchange of employees: If your company has a lot of other companies in the same brand name, you could ask the parent company for staff from some other company under the same brand name to do a particular task, this can be done if you are desperately looking to hire somebody
d. Reducing part time staff and contractors: Usually contractors and part time staff are paid more for their work as compared to the full time workers. It may be because of their expertise or just as compensation to them not being full time workers. When you are looking to cut down costs of your company, you could stop hiring contractors. This could save quite a lot of your expenses.
How do you propose to motivate the employees who see their colleagues being laid off?Often it has been observed when a company starts downsizing its employees, the other employees start getting insecure as they always have a feeling that the next number could be theirs and hence they at time also start losing motivation in working and also might exploring other job opportunities. It is a big concern for the employers to keep their other employees motivated while they are downsizing.
One of the major ways that you could help in keeping up the spirits of your employees is by giving them recognition for their work alongside praising them for their achievement. The other small steps that you could adopt to keep them motivated are:
- Discussion with employees - creates small groups of employees and explain them the situation personally.
- Empathy - be candid in understanding the people who were let go and also for the added responsibilities on the current staff. Discuss with the current staff on their thought process regarding the downsizing and try to understand them. This will be a good way that they will be able to vent out their emotions and will help in reducing the rumours.
- Courteous – be courteous enough towards your employees, and thank them that they are with the company in difficult times and the company appreciates their understanding. This will give a feeling to the employees that they are also important to the company.
Suppose you are laying off an employee. Make a check list you would require for them.You need to be very careful while laying off an employee as you have to be ready with your counter points that an employee may come up with after you inform him that he is being laid off from his job. Below mentioned are some points that you can keep in mind while you are planning to lay off an employee.
- Be aware of the rules and regulation mentioned in the company’s model standing orders regarding the termination of an employee, grievance procedures as well as the disciplinary actions or if any bond has been signed between the company and the employee.
- Keep all the performance appraisal reports up to date of the employee, so that if he questions you where did he lack in his performance, you have all the reports ready in your hand to answer and clarify his doubts on the same.
- You should be able to explain the reason of the lay off to the employee effectively. Hence you should be ready with all the relevant information.
- Notify the employee with all the benefits and the insurance rules and also about his final payment in advance.
- Try to avoid conversations on why was he laid off and why not the other employee.
- If the employee is worth, you could refer him to some placement companies so that you could help him in getting another job.
What are the steps in processing a suspension or termination of an employee?While you are terminating an employee, you need to be extremely careful. When you terminate an employee you must follow the below mentioned steps:
a. Notice Period: Notice period is nothing but how much in advance should you inform the employee about his termination. The Notice period is also at time dependent upon the employment period as well. But in most of the cases the notice period is fixed to one month, so that the employee has enough time to find another job for himself.
b. Leave entitlements: if there are any balance leaves in the employees account he can either avail them during the notice period or he could en-cash them as per his will.
c. Severance Pay: Severance pay is usually paid if the position is being eliminated from the company. Also the laws for the severance pay should be mentioned in the employment contract.
d. Final Pay: You should pay the dues of the employee by the last day of his employment or maximum within 4 weeks of time.
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