Dismissal, or a reduction in the number of employees, is a temporary or permanent termination of work of an employee or group of employees (collective dismissal) for commercial reasons, such as a change of staff or downsizing of the organization. Initially, the dismissal referred exclusively to a temporary interruption of work or employment, but this led to the final abolition of the term in both British and American English. There was a need to add the word "temporary".
Dismissal should not be confused with unlawful dismissal. Dismissed or displaced workers are people who have lost or left their job because their employer closed or moved, they did not have enough work, or their position and shift were canceled. A reduction in a company is defined as a reduction in personnel in the workforce. It became a popular practice in the 1980s and early 1990s, as it was seen as a way to increase shareholder value, because it helped reduce costs.
Indeed, recent reduction studies in the United States, Britain, and Japan suggest that executions are seen by executives as one of the preferred routes to help raise organization revenue, eliminate unnecessary expenses, and increase organization productivity. Typically, a reduction in the number of employees occurs as a measure of cost reduction.
Terminology
Euphemisms are often used to "soften the blow" in the process of dismissal. The term "dismissal" originally meant a temporary interruption of work (and, as a rule, payment of time that the employee was absent). The term has become a euphemism for final dismissal and now requires the addition of the word “temporary” to refer to the original meaning.
Many other euphemisms were invented for permanent dismissal, including "reduction", "excessive reduction", "change of rights", "use of synergy", "deferment", "smart resizing", "redistribution", "reduction of labor "," workforce optimization "," simplification "," power generation "," recursion "and" power reduction "(also called" RIF ", especially in the government employment sector).
Mass layoff is defined by the US Department of Labor as 50 or more workers laid off from the same company at about the same time. "Exhaustion" means that positions will be liquidated when workers leave or retire.
“Retirement” means that employees can resign now, but can still qualify for retirement benefits later.
"Redundancy" is a special legal term in UK labor law. When an employer encounters a certain type of job, stopping or decreasing in a certain area, this can be perceived as confusion. Dismissals suggest improper behavior or failure, but this term is also understood as economic forces that are not controlled by the employer and employees, especially in the face of a recession like the one that began in the late 2000s.
Common abbreviations for downsizing
RIF - the general reduction in the number of employees, an indefinite method. Often pronounced as an abbreviation without the need for explanation. Sometimes used as a verb, but most often in foreign-language dialogues. In Russian-speaking countries, the abbreviation is also found recently.
eRIF - email termination notice. Most often, the employer (or managers) notifies of the dismissal in a remote form.
IRIF - Forced dismissal, which can be carried out only with the consent of both parties in accordance with Article 77 Article 1 Clause 1 of the Part. The employer and employee must agree on the conditions under which the employment contract will be terminated. Such cases are frequent when the organization forces the employee to write an application for voluntary termination of the contract. The employee has the right to sue the employer, also the labor inspection will deal with this situation. But the employee is not always able to win the court. If he is fired, but the reason is indicated to show that the dismissal was related to the work and / or behavior of this employee, the employer has every chance to win the court.
VRIF - dismissal due to a reduction in the number of employees. The employee voluntarily terminates the employment contract. In this case, he must notify the employer in writing of his intention to leave the organization no later than two weeks in advance (part one of the eightieth article of the Labor Code of the Russian Federation). In some cases, the company may put pressure on the employee to make this choice, possibly implying that otherwise dismissal is inevitable or by offering an attractive severance package or early retirement. However, by law, a company cannot make decisions for employees.
WFR - reduction of labor, personnel, workers and the like.
An employee on a trial period must notify management 3 days in advance (Part 4 of Article 71 of the Labor Code of the Russian Federation).
When a manager is dismissed, it is necessary to notify the personnel department for the month (Article 280 of the Labor Code of the Russian Federation).
If the employment contract was concluded for more than 4 months, and was broken by an athlete or a trainer, you also need to warn about leaving for a month (part 1 of article 348.12 of the Labor Code of the Russian Federation).
If other terms are written in the employment contract, they can exceed 1 month (Part 2 of Article 348.12 of the Labor Code of the Russian Federation).
Employees who work by season, or who have concluded an agreement for a period of up to 3 months, must notify management 3 days before leaving (article 292, article 296 of the Labor Code of the Russian Federation).
The employee in his application may not indicate the exact dates and reasons for leaving. This was decided by the Ministry of Labor in a letter dated June 24, 2012 No. PG / 5521-4-1.
The employee has the right to write an application himself and submit it to the personnel department. If for some reason (he is also not obliged to explain them) he is not able to deliver the letter himself, a person can send it by mail or electronically. The letter will be valid if it is possible to determine the fact of sending and receiving the letter, as well as the date (application of the Ministry of Labor of September 5, 2006 No. 1551-4).
A letter can be considered sent and received, even if in fact you did not receive it and were not acquainted with it. This is stated in the first article 165.1 of the SCRF. The reduction in the number of employees should be done only at their own request in accordance with article 180 of the Labor Code of the Russian Federation.
Public sector layoffs
After the recession of 2007-2008 In the public sector, employment growth was significantly lower than in the private sector. And layoffs were used to ensure sustainability. As the public sector shrinks, the demand for services from the private sector is also declining. Reducing the number of employees of the organization in the public sector imposed restrictions on the growth rate of private companies. This inevitably burdens the entire market flow. The company must comply with the procedure for reducing the number of employees. Dismissal takes place in the same form, the employee notifies the state in writing of his intentions in two weeks, but already in accordance with the first part of article 36 of Federal Law of July 27, 2004 No. 79-FZ "On the State Civil Service of the Russian Federation"
An employee who fell under the reduction in the number of employees (according to the Labor Code of the Russian Federation) must arrive at the personnel department of his Administrative Department. The latter depends on the location and location of the public service. The employee must be given an order to reduce the number of employees.
Then the employee must receive an order for dismissal for signature and become familiar with it, receive a form of a bypass sheet and begin the process of handing over the files according to the issued document.
The last day of work is the day of dismissal. On this day, the employee must submit a bypass sheet, completed by him earlier, to receive his employment record and a copy of the employment contract from the employee of the personnel department. If the issuance of the work book is delayed, the last day of work shall be considered the day it was issued. At the same time, the employer is obliged to pay the subordinate a forced delay in finding a new job.
Unemployment compensation
The risk of a reduction in the number of employees varies depending on the type of activity and the country in which the person is located. Unemployment compensation in any country or workplace usually has two main factors.
The first factor in the payment of unemployment benefits depends on the distribution of unemployment benefits at the workplace specified in the employee's workbook.
The second factor is the risk of inequality due to the type of political regime in the country in which the person works.
For example, in some provinces in Canada, employees who have been laid off receive higher salaries when hired than those who already work. In France, laid-off workers have shorter periods of unemployment and higher earnings during re-employment than other unemployed. The amount of compensation, as a rule, depends on what position the employee has or had in the company.
How different benefits differ
Benefits may also vary if the employee is voluntarily dismissed (VRIF). The method of termination may affect the ability of a former employee to receive any form of unemployment compensation that may be available in their jurisdiction. In many US states, laid-off workers can apply for unemployment benefits and receive compensation. Depending on local or state law, workers who quit on their own will, as a rule, are not eligible for unemployment benefits, as are those who are fired for gross misconduct. In addition, dismissals due to the transfer of production abroad may give the right to retrain. Some companies in the United States use supplementary unemployment benefits.
Since they were first introduced by organized labor and the Department of Labor in the early 1950s and first published in the IRS Income Ordinance in 1956, SUB-Pay plans have allowed employers to supplement the receipt of state unemployment insurance benefits for employees who were forced to fired. By setting termination benefits as SUB-Pay benefits, payments are not considered payroll. In order to receive SUB-Pay termination benefits, a participant must be eligible for state unemployment insurance benefits and termination benefits must be paid on a periodic basis. Concerns about the organizational effectiveness of the post-abbreviated "anorexic organization" have also increased.
The benefits that a reduction-seeking company speaks of are focused on saving labor costs, speeding up decision making, improving communication, reducing product development time, increasing employee engagement and greater responsiveness to customers. Nevertheless, some authors draw attention to the "obsessive" desire to reduce to the level of complacency. There may not be grounds for reducing the number or staff of workers.
Layoff Effects
Traditionally, layoffs directly affect the employee. However, an individual who has lost his job is not alone in this. Layoffs affect the work environment and the economy, as well as people. They have a widespread effect. They affect other employees of the company, the most laid-off person, and even the economy of the entire company.
The consequences of layoffs in the workplace
Layoffs remain the best way for companies to cut costs. Although from the point of view of the employer, dismissal is not always so beneficial for the business. Reductions and layoffs cause uncertainty in the work environment and reduce the safety of other employees, as well as create fears and fears of dismissal for the remaining employees, and subsequently reduce the overall motivation for work, which is very important for the business and work environment.
According to the statement of research institutes, as well as the words of experts in the field of labor, in the environment after dismissal there is a need for empathy, tangibility, self-knowledge and relentless search for clients among the "surviving" employees. Remaining employees may feel guilty. To reduce the negative effects of layoffs, Wayne Cassio offers alternative approaches to dismissal and reduction.
Optimism is crucial for restoring the workplace environment because employees turn to their leaders for stability and predictability, and when they leave, they lose it. Regardless of the position in the organization, employees will look for work.
The consequences of dismissals for an employee
Employees (or former employees in this situation) can be influenced in several ways. When an employee is fired, his overall confidence in long-term work may decline, which reduces expectations for re-employment. Once an employee withstands dismissal, the consequences may affect future employment and relationships.
Layoffs in the workplace often leave a former employee less likely to trust future employers, which can lead to behavioral conflicts among colleagues and management. Although new employers are not responsible for previous circumstances, previous layoffs may affect work. Many companies are working to ensure that layoffs are minimally burdensome for the employee. From time to time, employers may fire several people at a time to mitigate the impact.
The consequences of layoffs in the economy
Since the reasons for the reduction in the number of employees are related to finances, they mainly affect the economy. Layoffs create an overall lower job security and increase employee competitiveness. Layoffs, as a rule, have two main consequences for the economy and shareholders. How layoffs affect the economy depends on the industry that fires and the size of layoffs. If the industry in which most regions are employed (for example, freight transportation in the northeast) suffers and is forced to lay off workers, there will be massive unemployment in the economically rich region. This can have ripple effects across the country. Unemployment is the biggest impact on the economy that can be caused by layoffs.
Layoffs Abroad
In French-speaking Belgium, the term Procédure Renault has become synonymous with a reduction in the number or staff of the organization leading to layoffs. When an employee is laid off in Australia, his employer must pay him an additional allowance, also called holiday pay.
The only case where a backup payment is not required is a casual employee working for a small business or having worked for less than 12 months. The payment of compensation for employees depends on the duration of the employee’s work for the employer, which excludes unpaid leave. If the employer cannot afford compensation for the reduction in the number or staff of the organization, he must pay his employee or help with finding a job. The employer may apply to reduce the amount of money that he must pay the employee. An employer can do this by contacting the Fair Labor Commission for a reduction in the reserve payment.
In the UK, permanent layoff due to job exclusion is usually called redundancy. In some countries (for example, Belgium, the Netherlands, Portugal, Spain, Italy, France and Germany), a distinction is made between leaving the company of their own free will and dismissal. In the first case, a person is not entitled to unemployment benefits, but can receive a lump sum payment for leaving the company.
The RIF reduces the number of posts, rather than firing specific people, and is usually accompanied by internal redeployment.
Labor Reduction Stages
The procedure for reducing the number of employees consists of the following steps. We will consider them below.
- Determine whether you need to reduce the number of employees in the organization, exclude an externally funded position, or reduce hours, then contact the human resources department.
- Develop a memorandum with a proposal for reduction, which will set out the grounds for action, the rationale for each decision, list the unit and / or affected persons (including accounts and identification numbers of employees) and explain how the workload will be distributed after the reduction is completed.
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HR must notify and withdraw any employee who has been dismissed to reduce the number of employees when the restoration of strength occurs in the position and department of this former employee. Dismissed employees are entitled to recall within one year after dismissal. If the recall is made within a year, the campus or institute will develop a schedule for recalling employees. The recall will be in the reverse order of dismissal; The most recently dismissed employees will be recalled first. If, within one year after the dismissal, a former employee was recalled to undergo this process, the date of his continuous service will be restored to the date that existed at the time of dismissal.
If an employee, after receiving notice of a reduction in the number of employees, rejects the offer of re-employment for the position that he held at the time of dismissal, he or she loses all rights to reinstate. Former employees who choose voluntary dismissal are not eligible for benefits.