Businesses may add new employees to their rosters during times of success. They may also need to reduce the number of paid workers on the company roster when operations contract. When companies experience temporary economic hardship, sometimes difficult choices become necessary.
Downsizing or eliminating excess employees is sometimes necessary to ensure the long-term solvency of an organization. The choice to eliminate certain positions is never an easy one. However, organizations may need to control staff costs to continue offering employment opportunities to the remaining workers at the organization.
Yet, in some cases, downsizing could actually worsen the financial struggles at a company by causing an employee lawsuit. Workers might try to claim that a company discriminated against them by terminating them or including them in the layoff.
How can companies avoid worker allegations when terminating multiple employees?
Establish clear retention criteria
The simplest way to prevent home worker allegations about a company discriminating is to ensure that the company has reasonable standards in place for determining who remains on the employee roster and who the company lays off or terminates. Frequently, organizations look at seniority and job performance when making decisions about employee retention. Establishing clear criteria for how the company makes decisions about terminations and retention when downsizing can be helpful. So can a thorough review of the list of retained and terminated employees.
Check for signs of unintentional discrimination
Having someone not involved in the decision-making process review the list of employees losing their jobs and the workers staying at the company can be of the utmost importance. That review can help detect signs of inappropriate patterns regarding who stays at the company and who loses their job.
If one group of workers has disproportionate representation among the people let go by the company, they may have grounds to take legal action against the organization later. Generally, there shouldn’t be any significant trends connecting the workers terminated via their protected characteristics. No one race, religion, age group or sex should have disproportionate representation in the people retained by the company or terminated by the organization.
The more careful an organization is when making downsizing decisions, the less likely the company is going to face financial losses related to employee-initiated litigation later. Being proactive when preparing for a significant staffing reduction can help insulate a company from claims made by frustrated employees.