HR Legal Corner: Layoffs
Published:
2021-06-25
In recent years, under the fierce market competition, many enterprises have begun to carry out large-scale layoffs due to various reasons such as operating deficits, structural adjustments, departmental relocation, production line closures, and divestment liquidation. The layoff project is progressing smoothly, not only can the understanding of the employees be obtained, but the enterprise can also revive itself. On the contrary, it will cause complaints from employees, or the enterprise will bear serious liability for breach of contract due to employee strikes, or the reputation of the enterprise will be seriously damaged due to the spread of employee petitions, social media and self-media.
The success of a layoff project mainly depends on the preparatory work in the early stage and the communication between the employees in the later stage, whether they understand the objectives of the enterprise, the key points that the employees may pay attention to, the "historical problems" that the enterprise may have, and the attitude of the local government.
1. determine the appropriate reasons and methods for layoffs
Article 41 of the "Labor Contract Law" stipulates economic layoffs, but in practice, the requirements for economic layoffs vary from place to place. Therefore, before citing "economic layoffs" as a reason, it is recommended to contact the local labor first. The administrative department makes an informal note to find out whether the layoffs of enterprises can apply to "economic layoffs". If economic layoffs are not applicable, the enterprise may choose a significant change in objective circumstances or liquidation of the enterprise as the reason for layoffs according to its business needs.
2. forms layoff project team
The formation of a project team is a very critical step in the layoff project, and the professionalism, execution and reliability of the project team members will directly affect the implementation of the entire project. Project teams can generally be divided into project core teams and project assistance teams. The core team is involved in the design and implementation of the entire project, with about 4-5 members, ensuring that there is at least one decisive and fully authorized senior manager and one HR or legal assistant who has data on employee salaries and benefits. In addition, the coordination of labor unions, security, production, public relations and other departments with external legal counsel is also very important.
3. enterprises to conduct "labor and employment physical examination" and formulate coping strategies
Before layoffs, it is very necessary for the company to conduct a "self-examination", such as: whether the employees are directly employed or dispatched? Are all signed a written labor contract? Are there any special employees such as "three periods", "work injury" and "medical period"? Are they paying social security and overtime pay according to the law? Have there been any strikes before?......
The reason for the labor and employment physical examination is that the layoff project is the last opportunity for employees to negotiate with the enterprise. When employees are laid off, they will try their best to strive for "maximum benefit". Therefore, any "non compliance" of the enterprise will become the stick for employees to negotiate with the enterprise. Only through the legal examination of labor and employment can enterprises know in advance what labor and employment problems they have, so as to formulate effective coping strategies.
When formulating coping strategies, we should consider as many as possible, analyze their advantages and disadvantages, and select the best one. At the same time, when a strategy is blocked in the implementation process, multi-strategy backup can also help enterprises quickly adjust their tactics to avoid deadlock.
4. formulation of a layoff plan
The formulation of the layoff plan is the "top priority" in the whole preparation for layoffs, and the main contents generally involved are as follows:
1. Grouping list of employees and determination of economic compensation
If there are more layoffs, it is recommended to group them. The grouping can be carried out in accordance with the principles of "easy before difficult", "employees in the same group have common characteristics as far as possible", "employees with bad employment records are evenly distributed to each group", and "the negotiation difficulties of each group are roughly the same.
With regard to the way of economic compensation, we can generally refer to the compensation method for layoffs of surrounding enterprises, the compensation scheme for layoffs of affiliated enterprises (if any), and the guidance of local government agencies.
2. Determination of important time nodes and formulation of project schedule
When to communicate with the government, when to inform customers, when to reduce overtime, when to stop production, when to implement layoffs and other important time node decisions are very particular, for the implementation of the entire layoff project is also crucial.
At the same time, in order to keep the whole project in order, the layoff project schedule should be made.
3. Preparation and production of documents
The layoff project needs to prepare and formulate a series of documents, such as the resolution of the board of directors, the notice of the trade union, the negotiation termination agreement, the details of economic compensation, etc., the interview communication documents such as the ppt description of the employee placement plan, the matters needing attention and process of negotiation communication, the unified negotiation strategy and speech skills, etc.
4. Response Plan on the Day of Implementation of Layoffs
In the response plan, all possible situations on that day should be listed first, and corresponding response plans should be formulated. At the same time, in order to prevent accidents in mass incidents, enterprise equipment should be counted in advance, inventory inspection should be conducted to confirm the security situation, etc.
5. Handling and response of special employees
Unless the enterprise is closed, the enterprise has no right to unilaterally terminate labor relations with special employees (e. g. "Phase III" female employees, injured employees and medical employees) regardless of economic layoffs or major changes in objective circumstances. Therefore, it is best not to put it on the same day with other employees when negotiating with special employees, and to formulate different compensation schemes according to different situations of special employees.
6. Confidential work before layoffs
The vast majority of enterprises will take strict confidentiality measures before announcing layoffs, but if the confidentiality work is done too well, it may also make it difficult for employees to accept it psychologically, which in turn leads to protests. And some areas of labor administration will require companies to listen to the views of employees before layoffs. Therefore, it is not impossible to "release some wind" in advance and let employees prepare psychologically in advance. Of course, the implementation rules of the layoff plan still need to be kept strictly confidential.
5. actively communicate with the government
Group layoffs are very likely to trigger mass incidents, which are manifested as collective slack, resulting in strikes, and in some serious cases, even into demonstrations, petitions and other events that seriously disrupt social order.
Therefore, in practical operation, the relevant labor administrative departments and the grass-roots government attach great importance to the reduction of such personnel, and it is necessary to obtain the understanding and support of the government in the implementation of the project.
In the practical operation of the layoff project, various other complicated situations may arise, so they need to be dealt with according to the specific local conditions. However, in any case, adequate preparation in the early stage is the foundation, and the communication combining law, reason and situation is the catalyst for the smooth development of the layoff project. Both are indispensable.
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