Creative, legal downsizing ideas?

hrnorth

I am the HR Manager at a mining facility, and we have a need to cut our salaried manpower by about a half dozen people. We have identified some folks who are all in their 50's, as are most of our employees, that are not really pulling their weight, but we don't have any good performance documentation on this. We've thought of offering some early retirement bonus options to all in hopes these would take it and run but we're not sure that we can legally say no to the people we don't want to lose. The things we are thinking about are either some temporary (1-2 year) termination allowance payments to carry a person to full retirement eligibility, or some lump sum inducements, or maybe some add-ons to their rule of 65 or 70-80 retirements, (but there are many others who could qualify for this than we want to allow)

Any ideas?

Terry

While it would add a little work to your plate, if you conducted perforance appraisals (or even short ones) for all employees, this would provide documentation to support downsizing the poor performers. This could cover the basics such as attendance, productivity, etc. Just one approach to think about. Another thing I would add is if you offer the downsized employees a generous package, don't forget you need to also incent the people you really want to keep. Last thing you want is to have the employees you really want to keep very disgruntled. Lastly, you may want to consult an attorney because even though most of the ees are over 50, if they are all not then the process for deciding who to downsize needs to be scrutinized for adverse impact.

Theresa Gegen TX

Lots of employers find that they don't have good documentation when they decide to make a reduction in force. But it is not too late to document the reasons for the selection (as long as it is done correctly -- which means that the valid business reasons for selecting the individuals for the RIF are documented, this could include not only a comparative on past performance, but also the skill sets possessed by each of the managers in comparison to the organizational needs that are expected after the RIF).

Having the management tean document the specific business reasons for the selection before the RIF will assist both you and the managers in not making selections based on illegal factors (like age or disability). It really will force the managers to think about their reasons and articulate the valid business reasons. If a manager can't articulate a valid business reason for the selections, then there probably isn't one. It will also help you if any of the selected individuals file charges of discrimination or sue. You won't have to go back to the manager and recreate the reasons why this individual was selected as compared to others. You will already have it down.

A company can legally give the selected individuals severance packages, and there is no requirement that the company offer the packages to a group (for example, in a volentary early out situation). As an evidentiary matter, in a lawsuit, the fact that packages were offered to an entire group and volentarily chosen can not be used to support a discrimination claim. However, if packages are offered on an individual basis, evidence about a offered package that was refused could be used by the employee in a lawsuit to support a discrimination claim. (The employee may use it as evidence that the employer tried to get him to sign his rights away or that the employer was focused on his close retirement). All in all, though the offering of severance packages, especially if they are likely to be accepted is the better practice.

A critical issue will be getting a release in exchange for the severance package. To get an enforceable release under the age discrimination act, the release must contain specific language, the employee must be given specific demographic information about the selections for the RIF and the comparators, and the employee must be given a long time to consider whether or not to accept the package and release. I strongly suggest that you hire an attorney to help you draft the release because of the complicated nature of the law in this regard. An attorney can also look over the selection information to help you determine whether the reasons for selection are supportable or whether you should do more background work before terminating the employees.


Good Luck!!

hrnorth

thanks for the ideas!