Workplace restructuring that involves downsizing enmeshes with a number of employer duties in a thicket of legal acts. Among the regulations, it is the framework for group layoffs and our subject, monitored redundancies, that performs a crucial role.
For this type of outplacement, public-law duties of the employer have been prescribed, as certain actions in job market policy are required. The regulations aim to increase the chances the laid-off employee may have on the job market, while more broadly mitigating the risks that job loss-related social tensions might arise.
With the act on the job market and employment services entering into force, bringing about significant, albeit not revolutionary changes, the topic of monitored layoffs has recently become a widely discussed issue. No doubt the adjustments should be studied when preparing a mass layoff plan, since the extra duties put on the employer in this regard may need to be taken into consideration.
Monitored redundancies
Pursuant to the binding regulations, a monitored layoff takes places when the employer is planning to let at least fifty employees go in a time span of three months for reasons related to the workplace.
The most prominent change in comparison with the previous legal state of play is the narrowing down of possible reasons for layoff. The parliamentary act outright points that the cause has to do with the workplace. What is meant by this can forks out into two types of reasons:
- layoffs done for non-employee-related reasons, which might involve the employer or occur independently, that is involve neither the employees nor the employer; or
- layoffs due to employer bankruptcy, liquidation or workplace liquidation for economic, organisational, production- or technology-related reasons.
Although this kind of downsizing covers at least fifty employees, it matters not how much staff is on the employer’s payroll, marking a notable difference from the group layoff regulation, where the act applies in a varied way depending on the current staff size in a workplace.
Notably, employer intention features in the way the three-month deadline is counted. The present state of affairs should thus be taken as its starting date. In particular, the duration should not be determined from the moment the employer hands in the declaration to terminate the job contract to the first employee. In group layoff regulations, the issue is handled differently, as the duration therein is calculated from the date the first employee in question is given the termination notice.
When will the monitored redundancy be a group layoff?
Most often one is also the other, which from the employer’s point of view necessitates the need to fulfil the obligations put on both by the job market and employment services act and by the group layoff act. By way of an example, consider a situation where an entity employing 300 people is letting go 50 employees in 30 days for workplace-related reasons. Both the number of employees, the termination period and the reasons clearly suggest that the stipulations from both acts need to be followed.
Yet, situations when monitored layoffs will not be group layoffs can likewise be imagined. Therefore, both these vehicles should be remembered when planning to curtail employment at a workplace.
Employer obligations in monitored layoffs
The employer has a duty to determine with the relevant district labour office the scope and form of assistance rendered to the employees being dismissed, including in particular job-seeking aid, vocational advice, training, certification of skill and knowledge acquired and production of documents for the latter. Cooperation with the district labour office is also envisioned in group layoff procedure; still, the scope of mutual give-and-take there applies to slightly different issues.
The employer can also finance the employee’s reskilling benefits, if the latter submits a relevant request. Granting the former employee’s request means the employer is legally bound to pay the employee, on the basis of their contract, from the month which the employee is starting the training, a reskilling benefit to the tune demanded by the act.
Offboarding support takes on the form of an adaptation programme addressed to the employees who are poised for reduction, counting down the days in their notice period or have been downsized within the previous six months. The employer is responsible for financing the programme, with the caveat that costs may be split between the employer and public administration entities.
Before they make a decision on launching staff changes and decreasing the number of posts, employers would do good to take the need to cooperate with public institutions into consideration, with pride of place going to the district labour offices. At this stage, sensible budgeting is advisable, with earmarking appropriate funds for an employee readaptation programme. For such a possibly thorny reorganisation process, it would certainly help cushion the ramifications of employment readjustment.
Dariusz Zimnicki, Partner at ZL LEGAL Legal Advisors, contributed to this review.
