Layoff or a reduction in force means a call back to work, a termination for cause is permanent.

In uncertain times like these, the way in which companies use layoffs as alternatives to a termination for cause is critical.

Literally the term layoff means ‘to call back’.
So laying someone off implies a promise to eventually call them back to work. So first, be careful about the term layoff unless you want them back. If you have workers, hit a slow point where you can’t afford to keep them, lay them off and hope they can come back when work starts up again, that’s a true layoff. Unless it’s that situation, then use a reduction in force or just say is a termination for cause

You’re not going to waste a reduction in force.
You could potentially do it on seniority, that’s the easiest but it also may not be in your best interest. Your oldest employees may not necessarily be your best employees. Likewise, the guy you just hired could turn out to be one of your hardest workers.

You can base a reduction in force on economy. If you’ve got 12 branches and you’re going to close one, everybody there is gone. Or you can base it on a performance and or behavior. But just like a termination for cause, it’s crucial to have good documentation.

Suppose you decide the ten lowest rated people based on last year’s evaluations are the first ones gone. This would be a great time to clean house, if you can. But it’s going to take the documentation, there’s the same pressure on laying off, reductions in force, job elimination as there is on terminations for cause. Just to save someone laid off.

Now, if you do decide, to just tell them they’re laid off and hope they go away, maybe it’ll work out. They might go out and find a different job, get hired, and you’ll never hear from them again.

They might say, “Well, I can’t sue because I got laid off.” But technically, there’s not a whole lot of difference. The harm is there. They don’t have a job. It carries the same risk as an termination for cause. Can they challenge based on the list? Yes they can.

Be careful about the literal term “layoff” and apply the same concepts of documentation and how the outsider would look at this to be safe.

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 April 2, 2008

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