Case Law: Big Fine for Not Providing Employment Documents!
A Dental Technician was awarded over €13,000 after her claims, of not being provided with written employment terms, Unfair Dismissal, and lack of notice pay, were upheld.
The negative consequences of not providing appropriate employment documents were highlighted in this recent Workplace Relations Commission case (ADJ-00034847).
Background
The complainant, Sarah O’Connor, worked as a Dental Technician for the respondent, Cas Dental.
O’Connor alleged that she had not received a written statement of her terms of employment, or a disciplinary procedure, or an employee handbook.
The complainant also explained that she did not receive a letter inviting her to the dismissal meeting. The dismissal meeting lasted about a minute. She was not given notice pay or the right to appeal.
Defence
Mr Colum Sower, a director of the respondent, explained that he thought he had a period of one year to issue an employment contract and this was his understanding based on advice he had received from the Small Business Association.
Mr Sower gave evidence that he issued the complainant with verbal warnings and a written warning before the dismissal, although there was no final written warning or formal improvement plan.
A notice payment was not made, but the complainant was given a payment for good will.
The respondent accepted the procedure used was not perfect but argued that the complainant had not met the required performance standards and there are serious consequences of not meeting standards in the medical profession.
WRC Decision
The WRC Adjudicator found that the claim of not being issued with written terms of employment was well founded. The respondent was ordered to pay compensation of four weeks’ remuneration to the complainant.
The claim of lack of notice pay was also upheld and the WRC Adjudicator ordered the respondent to pay one week’s remuneration to the complainant.
The WRC Adjudicator concluded that the Unfair Dismissal claim was well founded.
There were breaches of the Code of Practice on Grievance and Disciplinary Procedures, including no opportunity for representation at the dismissal meeting, and serious procedural flaws. The Adjudicator concluded that no reasonable employer would have dismissed the complainant in the circumstances and in this manner. The respondent was ordered to pay €12,000 compensation to the complainant.
Takeaways for Employers
It is essential to comply with the legal requirement to provide employees with written terms and conditions of employment within the required time limits. The excuse of receiving incorrect advice was not accepted by the WRC Adjudicator.
Bright Contracts clients can quickly and easily create legally compliant terms and conditions of employment using the step-by-step instructions in our software.
It is also important to understand legal obligations relating to notice pay.
Bright Contracts includes a legally compliant template contract clause about notice.
Finally, failure to follow reasonable procedures can result in serious consequences. In the O’Connor v Cas Dental Case, the respondent suffered reputational damage and was ordered to pay significant amounts of compensation.
Bright Contracts has a ready to go Employee Handbook which clients can tailor to their requirements. Policies and procedures are reviewed and updated in line with employment law changes and recommended practices.
First WRC Decision under Sick Pay Act
In this case (ADJ-00044889), Ms Karolina Leszczynska (the “Claimant”) had been employed by Musgrave Operating Partners Ireland (the “Respondent”) in its Supervalu store since 2007. During her employment, the Claimant went out on sick leave and a dispute arose.
Facts
The Respondent operated a paid sick leave scheme which entitled its employees to up to 8 weeks of sick leave on full pay once they had more than 6 month's service. Under the company's scheme, the first 3 days of leave were deemed "waiting days" and were unpaid. The Claimant went on sick leave for a period of 4 days, for which she only received 1 days' pay.
She then took a WRC claim on the basis that she was entitled to 3 days paid sick leave under the new statutory sick pay scheme per the Sick Leave Act 2022 (2022 Act).
Defence
The Respondent's case was that the Act permits an employer to use its own sick pay scheme as a substitute for the statutory scheme if it provides more favourable sick leave terms.
The following matters need to be taken into consideration when determining if an employer’s scheme is more favourable:
(a) the period of service of an employee that is required before sick leave is payable;
(b) the number of days that an employee is absent before sick leave is payable;
(c) the period for which sick leave is payable;
(d) the amount of sick leave that is payable;
(e) the reference period of the sick leave scheme.
The Respondent submitted that in all but one of the above aspects (point b), its own sick pay scheme was more favourable than the statutory sick pay scheme.
WRC Decision
The Adjudicator stated that the primary issue was whether the "waiting days" condition in the Respondents scheme made the scheme less favourable "as a whole" than the statutory scheme. The Adjudicator noted that a waiting period is also attached to the payment of Illness Benefit by the Department of Social Protection and that such a measure, aimed at discouraging intermittent absences, is a reasonable one.
The Adjudicator concluded that the disadvantage caused by the waiting period in the Respondent's scheme was outweighed by the advantages of the scheme.
The Respondent's scheme gave its employees full pay as opposed to 70% pay as per the statutory scheme. Further, the Respondent's scheme covered a longer period than the statutory scheme.
This led the Adjudicator to conclude that the Respondent's scheme could be substituted for the statutory scheme.
Conclusion
This decision acts as a helpful clarification for employers in respect of whether a company sick pay scheme may or may not be more favourable than the statutory sick pay scheme. When comparing the two schemes, regard should be had to the criteria set out in the legislation.
Crucially, even if certain elements of the company scheme are less favourable than the statutory sick pay scheme, the overall benefit granted by the company sick pay scheme might still be more favourable.
Domestic Violence Leave
Domestic Violence Leave is part of the Work Life Balance and Miscellaneous Provisions Act 2023.
Any employee who has experienced in the past, or is currently experiencing domestic violence will have an entitlement to take paid leave for the following purposes:
• to seek medical attention
• to obtain services from a victim services organisation
• to obtain psychological or other professional counselling
• to relocate temporarily or permanently
• to obtain an order under the Domestic Violence Act 2018
• to seek advice or assistance from a legal practitioner
• to seek assistance from the Garda Síochána
• to seek or obtain any other relevant services
The entitlement is for employees to take up to five days of full paid domestic violence leave in any 12 consecutive months. Where an employee is absent from work for the purposes of domestic violence leave for part of a day, that will be counted as a full day of domestic violence leave.
Domestic violence leave applies to any person of any age who has entered into or works under a contract of employment, including part-time and fixed-term employees. As there is no service requirement specified in the Act, employees will be entitled to take domestic violence leave from their first day of employment should they need to do so.
The entitlement also extends to employees to take domestic violence leave for the purposes of assisting a ‘relevant person’ in the doing of any of the above listed actions.
A ‘relevant person’ is
• the spouse or civil partner of the employee
• the cohabitant of the employee
• a person with whom the employee is in an intimate relationship
• a child of the employee who has not attained full age
• a dependent person to the employee
Domestic violence is defined broadly under the Act to include violence or threat of violence, including sexual violence and acts of coercive control committed against an employee or a relevant person by another person.
Notification to Employers
Employees who take domestic violence leave must, as soon as reasonably practicable after having taken the leave, notify their employer of the fact that they have taken domestic violence leave and the dates on which it was taken.
The Act does not require employees to provide evidence to support their need to take domestic violence leave.
Parental Leave Case Law Example
The Workplace Relations Commission (“WRC”) case of Elizabeth O’Reilly v Avista CLG was brought under Section 18 of the Parental Leave Act 1998 (“the Act”) in respect of the Complainant’s persistent issues with her employer in respect of her applications for parental leave. The Adjudicator confirmed that parental leave is an entitlement and that the Act only requires notice and not an application for approval unless an employee is applying for a period of parental leave that is shorter than a block of six weeks. On that basis, the Adjudicator directed the Respondent to amend its Parental Leave Policy to remove any requirement for approval for parental leave unless requested for a period of less than six weeks. She also ordered that the Respondent confirm the Complainant’s parental leave applications for 2024 and 2025 no later than 1st June 2023.
Facts: The Complainant was employed as a social care worker by the Respondent from October 2002. The Respondent provides housing support for people with intellectual disabilities and complex needs. Having had her first child in 2011, in 2014 the Complainant applied for parental leave which she intended to take in 2015. The Respondent agreed to providing this by reducing her hours over a period of 62 weeks. However, the Complainant made a number of further applications for parental leave, all of which were refused or altered by the Respondent. The leave requests were:
- In 2017, she applied for one 7-week leave block to be taken in the summer
- In 2018, she applied for one 7-week leave block to be taken that summer
Both of these requests were refused on the basis that the Respondent would be required to get agency workers to fill in for the Complainant. The Complainant submitted a claim to the WRC, which resulted in a failed mediation and the matter was returned to be heard by an Adjudicator. In 2019, the Complainant applied for parental leave by reducing her hours and this was also refused. Further requests for parental leave made in April and May were also refused so she brought a further claim to the WRC in February 2020. The Respondent requested details of her plans for the next five years, but the Complainant wanted to make an application on an annual basis. After failed mediation for this claim, it was returned to be heard by an Adjudicator, but was withdrawn by the Complainant when she was granted her leave for a 6-week block in August and September 2021. On foot of this, the Complainant made a further application in October 2021 for 7 weeks in 2022, which was again refused. This time the Respondent stated that it was being refused as one block but approved the parental leave to be taken by way of a reduction to her working hours. The reason given for this was to allow all employees two weeks holidays during the summer. Further requests for a block of leave for 2023, 2024 and 2025 or for reduced hours were not confirmed by the Respondent. It stated that it would confirm with the Complainant by 30th April each year and argued at the hearing that this met its obligation as it was in excess of the 4 weeks’ notice required to be given under the Act.
Decision: Section 6 (1) of the Act states that
“An employee who is a relevant parent in respect of a child shall?be entitled?to leave from his or her employment, to be known and referred to in this Act as ‘parental leave’, for a period of 18 working weeks to enable him or her to take care of the child”. From September 2020, this period was increased to 26 weeks.
In order to avail of this entitlement, section 8 requires the employee to provide notice in writing to his employer at least six weeks in advance of the start date of the leave. The Adjudicator pointed out that the requirement to give “notice” is not a requirement to seek “approval” and she compared it to the entitlement in respect of maternity leave.
Section 11(1) of the Act provides for an employer to refuse the parental leave only on a limited basis – were
“the employer is satisfied that the taking of parental leave at the time specified in the notice would have a substantial adverse effect on the operation of his or her business, profession or occupation by reason of seasonal variations in the volume of the work concerned, the unavailability of a person to carry out the duties of the employee in the employment, the nature of those duties, the number of employees in the employment or the number thereof whose periods, or parts of whose periods of parental leave will fall within the period specified in the said notice or any other relevant matters, the employer may, by notice in writing given to the employee not later than 4 weeks before the intended commencement of the leave, postpone the commencement of the leave to such time not later than 6 months after the date of commencement specified in the relevant notice under section 8(1) as may be agreed upon by the employer and the employee”.
The Adjudicator pointed out that “employers are required to find ways to enable their employee to balance their family life with their working life”. The Adjudicator stated that where the employer does not meet the required justifications set out in Section 11(1) than parental leave may only be postponed by agreement between the employee and employer and the employer does not discretion to refuse an employee who gives notice of his or her intention to take parental leave.
The Adjudicator noted that the Respondent had not argued that it was “swamped” with applications for parental leave during the summer months. Perhaps if it had, there would have been grounds to refuse the application until a later date.
The Respondent’s Parental Leave Policy contains the following clause:
“Application for Parental Leave should be approved by your Senior Manager/Service Manager and then submitted to Human Resources for final approval in your Centre of Employment, not later than six weeks before the proposed commencement date under section 8(1) of the Act.”
The Adjudicator stated that this policy was misleading as it suggests that managers have discretion to “approve” an application and in fact provides for managers and HR to provide “final approval”. The Adjudicator therefore directed the Respondent to amend its policy and remove the word “approval” except in respect of parental leave requests for periods that are shorter than 6-week blocks.
The Adjudicator further directed the Respondent to provide confirmation to the Complainant of her parental leave for the summer of 2024 and 2025 by 1st June 2023 and to ensure that it has adequate cover for her parental leave of 2023, 2024 and 2025 as it had been given plenty of notice to provide same.
Takeaway for Employers: This decision clearly illustrates that employers must facilitate the taking of parental leave when sought to be taken in a minimum of a 6-week block and that an employer may only postpone such a request by no more than six months if it meets the justifications set out in section 11(1). The decision reminds employers that approval can only be sought if the request for parental leave is for a period of less than a 6-week block.
Jury Service - FAQ
The Juries Act 1976 places a civic duty on individuals to provide jury service when chosen to do so by random selection. The Act has a number of provisions aimed specifically at an employer’s obligations to employees who are requested to undertake jury service. We have set out these obligations through a set of FAQs.
Do employers have to provide paid time off for employees who attend jury service??
Yes, the employer must allow the employee to take paid time off to attend jury service where required. This also includes when an employee is summonsed for jury service but may not actually be called on to serve on the jury panel.
Is this protected leave??
Yes, an employee’s employment is protected for the duration of their jury service. At the end of jury service leave, they are entitled to return to their original job under terms and conditions no less favourable than those which would have applied if they had not been absent.
Can employers request that the employee does not attend jury service??
The employer is prohibited from stopping an employee from fulfilling their civic duty to attend jury service, however, an employer can ask the employee, if they agree, to make an application to be excused which outlines the reason why they are unable to attend. It is important to note that the decision to grant the application is at the discretion of the County Registrar. If the application is refused the employee must be allowed to attend jury service.
How can application to be excused be made??
Employees should state their reasons as fully as possible on the form J2 that is attached to the original summons, explaining why they should be excused and send it to the County Registrar. The application should include any certificates or documents in support of their application.
An employee has been called to give evidence for a civil / criminal case, are they entitled to paid time off??
No, jury service should not be confused with a situation where an employee has been requested or subpoenaed to provide evidence in civil law or criminal proceedings. In such a case, there is no entitlement to paid time off work. However, the organisation may, at its discretion, decide to allow the employee to avail of either annual leave or unpaid leave.
Is the employee entitled to annual leave and public holiday entitlements??
Yes, employees continue to accrue annual leave and are entitled to their full public holidays.
How much notice should an employee give when called to jury service??
An employee should provide written notification to you that they need to avail of jury service leave. This should be received as soon as possible after they have received the jury service summons. You can request that the written notice includes evidence of the times and dates that they are required to attend court.
In the instance that an employee is required to attend part of a working day for jury service leave, can an employer request they return to work??
Yes, an employee must return to work immediately after they have been released from court. For each day they attend jury service, they should provide you with a certificate of attendance from the County Registrar evidencing the dates and times of their jury service.?
Common Parental Leave Questions
There are several different types of leave available to parents in Ireland. What employees are entitled to depends on their circumstances.
- Maternity leave: If employees become pregnant while in employment, they may be entitled to maternity leave. While employers don’t have to pay employees during this time, they might be eligible for maternity benefit for the first 26 weeks. They are also entitled to an extra 16 weeks of unpaid maternity leave
- Paternity leave: New parents are entitled to 2 weeks paternity leave from employment or self-employment following the birth or adoption of a child. Employers do not have to pay for this leave but employees may be eligible for paternity benefit
- Adoptive leave: One parent of the adopting couple or a parent who is adopting alone is entitled to 24 weeks of adoptive leave, beginning on the day the child is placed with them. Employers do not have to pay an employee for adoptive leave but they may be entitled to adoptive benefit. They are also entitled to an extra 16 weeks of unpaid adoptive leave
- Parent’s leave: Parents of children under two and parents of adopted children in the first two years of adoption are entitled to seven weeks paid parent’s leave
- Parental leave: Each parent is entitled to 26 weeks of unpaid parental leave before a child is 12 years of age
Rights as a parent
Before employees apply for time off work, it is important to understand what their entitlements are.
Under Irish law, parents are allowed to take unpaid leave from their job to look after young children. This is called parental leave. Employees can take up to 26 weeks off work for each eligible child. Parental leave is to be used only to take care of the child concerned. If it is taken and used for another purpose, the employer is entitled to cancel the leave.
What is parental leave?
Under Irish law, parents are allowed to take unpaid leave from their job to look after young children. This is called parental leave. Employees can take up to 26 weeks off work for each eligible child. This includes parents, adoptive parents and ‘in loco parentis’ (that means they take the role that would usually be fulfilled by a parent).
Parental leave is available for each child up until their 12th birthday. This may be extended in the following circumstances:
- If the child was adopted between the ages of 10 and 12, employees can take the leave that they were entitled to up to two years after the date of the adoption order
- If the employee's child has a disability or long-term illness, then they may take leave up until they are 16 years of age
- If illness or another incapacity stopped an employee from taking the leave before the child reached the age limit, an extension may be allowed
Do employees get paid while on parental leave?
Employees are not entitled to pay or pension contributions from their employer while on parental leave. They are also not entitled to social welfare payments. Taking this leave does not affect any of the other employment rights.
Employees can get credited PRSI contributions while taking leave. The employer must write to the Records Update Section of Department of Social Protection (DSP), detailing the weeks the employees have not worked, so that they can get credited PRSI contributions for this time.
Is there a limit to how much leave employees can take?
If employees have more than one child, they are only entitled to take 18 weeks total in a 12-month period. However, this can be extended if the employer agrees. If an employee has twins or triplets, they are allowed to take more than 18 weeks of parental leave in a year.
If employees work part-time, their entitlement to leave is reduced on a pro-rata basis.
As the legislation only sets out the minimum entitlement is in terms of how many weeks are available to take, employers can have a greater amount than this in the contract.
Do employees have to take all of their leave at once?
No, but employees are allowed to do that if they want to. They can also take it in two separate blocks but must take at least six weeks in each block. There must be a gap of at least 10 weeks between the two periods of leave per child.
However, if the employer agrees, the leave can be separated into periods of days or even hours.
Are partners entitled to the same amount of leave?
Both parents are entitled to their own 26 weeks of parental leave. If employees both work for the same employer and the employer agrees, one employee can transfer 14 weeks of their leave entitlement to each other.
What happens if an employee gets sick while on parental leave?
Parents who fall ill while on parental leave are allowed to suspend the leave for the duration of their illness, but only if that illness leaves them unable to care for the child.
They will have to provide their employer with written notice and relevant evidence of the illness to their employer as soon as is reasonably possible in order for the leave to be suspended.
What happens to employees' annual leave?
During parental leave, employees are regarded as still working for employment purposes and so they can still build up annual leave entitlement. If their annual holidays fall during the period of leave, then they can take them at a later time.
If a public holiday falls while they are off and it takes place on a day when they would normally be working, it is added to their period of leave.
Can employees return to their old job after time off?
Employees are entitled to return to their job unless it is not reasonably practicable for the employer to allow them to return to do so. In this instance, employees must be offered a suitable alternative on terms no less favourable compared with the previous job, including any improvement in pay or other conditions which occurred while on parental leave.
When they return to work, they are entitled to ask for a change in the work pattern or working hours for a set period. Employers must consider their request and respond within four weeks but is not obliged to grant it.
Employees who take parental leave are protected by law from unfair dismissal.
What happens if employees switch jobs?
If employees change their job and have used part of the parental leave allowance, they can use the remainder after one year of employment with the new employer, provided the child/children are still under the qualifying age.
How should employees apply for parental leave?
In general, employees must have been working for the employer for at least a year to get the full amount of parental leave. To apply, they need to:
• Give notice in writing
• Inform the employer at least six weeks before the leave is due to start
• Include the start date, the way the leave will be taken and the duration of the leave
• Sign a confirmation document between the employer/employee confirming the details of leave at least four weeks before the leave is due to start
Can an employer say no?
Employers can only deny the request if employees do not meet the criteria to be eligible for leave.
If an employee has been working for the employer for anywhere between three months and a year, they may still qualify for pro-rata parental leave if the child is very near the age threshold. This allows employees to take one week of leave for every month of employment completed.
Can an employer postpone my parental leave?
An employer may also postpone the leave for up to six months, but this must be done before the confirmation document is signed. After six months, the leave cannot be postponed without further written agreement; grounds for such a postponement include lack of cover or the fact that other employees are already on parental leave.
Normally only one postponement is allowed, but it may be postponed twice if the reason is seasonal variations in the volume of work.
New Statutory Leave Updates
The Work Life Balance and Miscellaneous Provisions Act 2023 was signed into law on the 4th April 2023. From the 3rd of July, two of the changes are coming into effect. These are:
• a breastfeeding at work extension
• unpaid leave for medical care purposes
The breastfeeding at work entitlement has been extended from 6 months to 2 years after the birth of a child. Employees are entitled to take one paid hour off work each day. It can be taken in the examples below:
• One hour break
• Two 30 min breaks
• Three 20 min breaks
Employees have an entitlement to 5 days of unpaid leave per year for medical care purposes. Apart from doing so for the employee’s own medical care, an employee will be allowed take this leave for:
• their children,
• spouse, civil partner or cohabitant,
• a parent,
• a grandparent,
• a sibling,
• any person living in the household
The 5 Day Statement
Within the first 5 days of starting a job, employers must give employees part of their ‘written statement of terms of employment’. This written statement must include the core terms of employment and is also referred to as the 5 Day Statement.
Within 1 month of starting the job, employers must give employees the remaining terms of employment in writing (such as entitlement to annual leave).
The 5 Day Statement
The 5 Day Statement includes:
- The full names of the employer and employee
- The address of the employer
- The place of work, or where there is no fixed or main place of work, a statement stating that there are various places or employees are free to set their own place of work or to work at various places
- The date the employment started
- The job title, grade or nature of the work (such as a brief job description)
- The expected duration of the contract (if the contract is temporary or fixed-term)
- The rate or method of calculating pay, and the ‘pay reference period’ (for example, whether you are paid weekly, fortnightly or monthly)
- What the employer reasonably expects the normal length of the working day and week to be (for example, 8 hours a day, 5 days a week)
- The duration and conditions relating to the probation period (if there is one)
- Any terms or conditions relating to hours of work, including overtime
The right to get the core terms of employment (in writing) is set out in the Employment (Miscellaneous Provisions) Act 2018 and updated by the European Union (Transparent and Predictable Working Conditions) Regulations 2022. Employers can face serious penalties if they do not comply.
Employers must sign and date the ‘written statement of terms of employment’, but there is no legal requirement for employees to sign it. Employer must keep a copy of the written statement throughout employees employment, and for at least a year after it ends.
The Work Life Balance and Miscellaneous Provisions Bill
The Work Life Balance and Miscellaneous Provisions Bill 2022 (“the Bill”) aims to increase the participation of women in the workplace and the take-up of family-related leave and flexible working arrangements by all. The Directive aims to encourage a more equal sharing of family related leave between men and women.
Right to request flexible working
The General Scheme proposes the introduction of a right for employees with children up to the age of 12 (or 16 if the child has a disability or long-term illness), and employees with caring responsibilities, to request flexible working arrangements for a set period of time for caring purposes. The General Scheme goes further than the EU Work-life Balance Directive (the Directive) and will apply to children up to 12 years old (or 16 as outlined above). The EU Directive provides this right for parents with children up to 8 years old.
Under the current draft, the employee requesting flexible working arrangements needs to have six months’ service with the employer before they can make a request and must make the request at least six weeks before the arrangement is intended to start. Employers must consider the request and will have four weeks to respond. They can either grant, postpone or refuse the flexible working arrangement and will be required to provide reasons for any refusal or postponement. In certain cases, the time period to respond can be extended by a further eight weeks.
Requests can be postponed for six months where an employer is satisfied that the commencement of the arrangement would have a substantial adverse effect on the operation of the business because of:
- seasonal variations in the volume of work
- the unavailability of someone to carry out the employee’s duties
- the nature of their duties
- the number of other employees availing of flexible working arrangements
- any other relevant matter
Flexible working arrangements will need to be documented in an agreement.
At the end of the flexible working arrangement, the employee is entitled to return to their original working arrangements, hours or patterns (employees are also entitled to request an early return to their original working arrangements).
Leave for medical care purposes
The General Scheme proposes the introduction of five days’ unpaid leave, per year, per employee, where, for serious medical reasons, the employee is required to provide personal care or support to family members or loved ones such as a child, spouse, cohabitant, parent and sibling. This leave cannot be taken in periods of less than one day and the employer may request evidence of the employee’s relationship with the person needing medical care, the nature of the medical care required and medical certification of the serious medical issue. This right is in addition to existing entitlements under the Carer’s Leave Act 2001 and force majeure leave.
Extension of the period during which time can be taken out from work to breastfeed
The General Scheme proposes an extension of the period from 26 weeks to 104 weeks following the birth of a child during which employees have an entitlement to paid time off from work or a reduction of working hours for breastfeeding purposes.
The Work Life Balance and Miscellaneous Provisions Bill was signed into law on the 4th April 2023. More information on the Bill can be found here.
Lay offs: What you need to know
As unpredictability in the global economy continues, company layoffs remain in the news. While layoffs may be necessary and appropriate, in many cases they cause more damage than benefit. Some leaders taken actions to reduce risks to company performance, reputation and long-term viability. What can we learn from these actions?
1. Be clear in the reason for layoffs
When it comes to lay-offs, some are strategic and forward-looking with higher valuations and others are focused solely on cost cutting. Examples of strategic reasons for lay-off include exiting less profitable sectors, products or markets due to changing customer habits. Businesses who are transparent regarding the reasons for layoffs see an increase in investor, customer and employee trust and engagement.
2. Use layoffs as a last resort
Most organisations that conduct layoffs do not see improved profitability, especially those that are highly reliant on innovation and growth. Leaders often underestimate the negative impact of layoffs on productivity, employee engagement, retention and brand reputation.
Effective leaders know that they should pursue all possible alternatives before embarking on layoffs, including temporary furloughs, redesigning jobs and work models, moving some workers to contractor status and offering more flexible benefits to create cost and operational flexibility.
3. Act fairly
Layoffs historically have had a negative impact on women and underrepresented employees. Recent news stories show the effect of layoffs among employees on maternity and health leave, as well as those in vulnerable positions with visas.
Reasons cited as acceptable for determining who is laid off include factors such as employee performance, tenure, experience and skill set. Effective leaders know that evaluating performance, skills and other factors is difficult and time-consuming, and that maintaining ongoing performance evaluation and review processes can position companies well for both ongoing and unanticipated events.
4. Know the people being laid off
Great leaders spend the time and thought required to understand not only who they are laying off but also why and the potential impact. They conduct workforce planning exercises using data science to understand employee performance, skills, networks and collaboration patterns to safeguard against losing key talent and creating unintended consequences.
5. Take responsibility and show appreciation
Leaders must ensure they take responsibility for layoffs and show appreciation for those impacted. They demonstrate their empathy and compassion through all communications. They understand their audience, allow opportunity for employees to process the information and share their feelings, and provide support and resources.
While layoffs are difficult for all involved, effective leaders handle them with care to avoid unravelling company purpose, culture and performance.
