Avoid lawsuits, anger when laying people off
Business owners dread having to tell employees they’re being laid off.
It’s inescapable in a weak economy or as a company changes the way it does business that some workers must be let go. There’s probably no way for a company owner to blunt the pain, but being honest, direct and showing concern when breaking the news may help the employees and workers they leave behind as they recover from the blow.
Before you meet with a staffer you intend to lay off, carefully plan what you’re going to do and say. First, be aware of possible legal complications.
“You should always contact an attorney,” said human resources consultant Leigh Branham. A lawyer will help you look out for pitfalls that could land you in litigation -- for example, if you intend to lay someone off right before the date when they would be vested for retirement benefits.
Bob Burbidge, founder of Genesis Consolidated Services Inc., a personnel outsourcing firm, warns that if you lay off a worker who is in a class protected by labor laws -- such as minorities, women, the disabled and people over age 40 -- but you decide to fill the job soon after with someone else, you could be opening yourself up to a lawsuit for discrimination.
Branham advises laying off workers on a Monday or a Tuesday, and definitely not on a Friday. It is simply kinder and more compassionate not to do it right before the weekend.
“If you do it on Friday, people will stew in their own poisons over the weekend, without anyone to counsel them on how to handle it,” Branham said. On the other hand, if they get the news early in the week, they can start meeting with outplacement counselors, if the company is providing this service, or otherwise get some help in moving forward.
Hurtful as the news is going to be, it should be delivered in a straightforward manner.
“You need to explain to an individual the reasons why -- if the company has financial hardship, because they lost some big client,” said Patty Hilger, a vice president at Genesis. “You have to be really direct.”
At the same time, Hilger said, “you want to be respectful and treat them with dignity.”
Always keep the meeting private, and try to have another manager with you as you deliver the news. Never, ever do it by e-mail.
You should consider some kind of severance package. One reason for this is the highly negative effect on the rest of the staff if they find out you sent someone away without any severance.
Treating a laid-off staffer well will help morale -- and in turn, productivity -- among your remaining employees. Remember that what you say to this staffer will be repeated over and over to co-workers.
Meanwhile, the rest of your staff will be worrying about their own jobs. Talk to them as soon as possible after you’ve met with a departing staffer, and “not have the affected employee communicate what happened,” Hilger said.
