Layoff means they will return to work, termination of employment is a permanent dismissal
Be careful about the term layoff unless you really want them back. The term layoff literally means ‘call back’. Lay off means that eventually you intend to call them back; its not the same as a termination of employment. Suppose you’re a ski instructor. You hire other ski instructors. And so, business is great when it snows, The ski instructors teach skiing until the snow melts. Then, you lay them off and hope they come back next season.
This used to happen all the time in the car industry. Lots of layoffs. They’d make too many cars so they’d lay off a bunch of employees. Until they sold out the cars, they brought them back. Now the companies learn pretty quickly. They’re just going to make enough based on the information that I have.
So saying you’re going to lay someone off is just a soft landing for termination of employment. If you’ve got 100 employees and you decide you’re going to lay off just one person, think how an outsider would view that. Is the termination of employment for one person really going to make a difference? An outsider is going to ask if your intent was to get rid of that one person. If it wasn’t, then you’re suggesting that you’d be willing to rehire that employee. If you’re not willing to do that, then you’re running into trouble.
Don’t use layoff as an alternative to termination of employment.
Legitimate layoffs can be based on seniority. Last one hired, first one laid off. Or you can do it by location. If you’ve got a branch that’s closing down, anyone at that branch has lost their job. Or performance and behavior. The ten lowest rated people based on last year’s evaluation will be the first ones gone. But you have to be able to justify that you’re not using this as a euphemism for termination of employment.
Now, on today’s climate usually even laid off employees can go and find work. So the vulnerability is not there. But I’m not going there. Don’t use the word layoff unless you want them back. And the real risk comes if you laid them off and then two years later you hire a replacement. They may come back and say, “Why didn’t you offer me the job? You told me I was laid off.”
Then there’s also what’s called a permanent layoffs. That’s basically termination of employment. If your intent is to get rid of somebody, then either fire at-will, buy him out, take your chances, try to salvage if you can before it gets to that point.
Also avoid a constructive discharge. This is where you stop short of firing them, but you could an employee’s hours to the extent that they’re miserable until they quit. What would a reasonable man, reasonable woman tolerate given the work environment? This is also not a safe way to circumvent termination of employment.
You’ve got reasonable chance to save their job. You’ve got at-will, but there’s not a whole lot in between to be safe. So don’t try to lay someone off as an alternative to termination of employment.
Edited remarks from the Rapid Learning Institute webinar: “Yes, You Can Fire Without Fear! What Every Supervisor Needs to Know” by Hunter Lott, Esq. on August 22, 2007
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