HR Practices in a Recession: Exploring the Options OMHRA: September 17, 2009.
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Transcript of HR Practices in a Recession: Exploring the Options OMHRA: September 17, 2009.
HR Practices in a Recession: Exploring the Options
OMHRA: September 17, 2009
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Union vs. Non-Union Options
• More control over non-union employees• Measures are often directed at non-
union employees• Collective agreement will largely dictate
measures that can be used
4
alternatives to termination
Cost Cutting:• reduced or time-limited health benefits• training and development restrictions• reduced travel budgets
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alternatives to termination
Cost Cutting:• demotions • salary freezes• bonus controls
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alternatives to termination
Maintaining Staffing Levels:• vacancy management• hiring freeze• redeployment
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alternatives to termination
Working Hours:• reduced work hours• work sharing • overtime control• managing absenteeism
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alternatives to termination
Staff Reductions:• temporary lay-offs • voluntary unpaid leaves• voluntary retirement
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alternatives to termination
Be Careful of Constructive Dismissal!
• unilateral changes: on consent on notice with consideration
• otherwise, potential constructive termination of employment
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alternatives to termination
Considerations:• impact of constructive dismissal • employee’s duty to mitigate by accepting
the change
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alternatives to termination
Duty to Mitigate in a Recession:• reason for change• manner in which change is
communicated• one employee or several affected
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alternatives to termination
Overall Questions:• can it be seen as humiliating? • is it an attempt to avoid severance
obligation?
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alternatives to termination
Cost Cutting:• potentially lesser impact • employees may be more amenable• can provide significant savings• don’t be short-sighted
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alternatives to termination
Cost Cutting:• is it humiliating? fundamental?• disproportionate impact on certain
employees?• pay increases a fundamental term of
employment?
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alternatives to termination
Demotions: • in context of restructuring• coupled with offer of severance• again…mitigation issues• morale issues
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alternatives to termination
Redeployment:• moving employees to open positions• terms of employment – stay the same
or based on position• union cooperation• voluntariness important
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alternatives to termination
Reduced Work Hours/ Work Sharing: • shared amongst several employees• Work Sharing 2009 – Service Canada• voluntary participation• what if they don’t agree?
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alternatives to termination
Reduced Work Hours/ Work Sharing:• back to normal after the recession• humiliating?• potential claims
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alternatives to termination
Overtime Control and Absenteeism:• assertively managing absences to avoid
overtime• managing strenuous workloads• wellness programs• changing expectations re: work
outcomes
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alternatives to termination
Temporary Lay-offs and Unpaid Leaves:
• lay-offs per Employment Standards Act• in employment contract or collective
agreement?• common practice?• if not, deemed termination at common
law
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Temporary Lay-offs and Unpaid Leaves:
• practical risks/rewards• morale issues• timing the layoff
alternatives to termination
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Voluntary Retirement: • human rights concerns• individually targeted• available to all employees?• what about key employees
alternatives to termination
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basic legal framework
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basic legal framework
Types of Termination Payments:
• Employment Standards Act:• notice/pay in lieu of notice• severance
• Common law:• reasonable notice
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basic legal framework
Employment Standards:
• minimum only• employee can’t agree to less• must continue all benefits and forms of
compensation
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basic legal framework
Common Law:
• bridge between jobs
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basic legal framework
Common Law:
• factors for notice period:• length of service• position• age
• no standard formula
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basic legal framework
Impact of Employment Contract:
• can establish notice period• governs on termination• limits exposure and need to litigate
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structuring the package
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structuring the package
Structure:
• working notice vs. pay in lieu• lump sum payment vs. salary
continuance
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structuring the package
Working Notice or Pay in Lieu:
• working notice rarely works• demoralized employees aren’t
productive• pay in lieu best option
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structuring the package
Making Working Notice Work:
• more than one person affected • retention bonus• resignations during working notice
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structuring the package
Lump Sum vs. Salary Continuance:
• length of the notice period• <4 months’ pay as lump sum• prospects of re-employment • clean break
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structuring the package
Salary Continuance:
• incentive to find new employment• bonus on alternate employment• definition of alternate employment• confirmation of employment status
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structuring the package
Assistance with Mitigation:
• providing reference letters• offering outplacement counselling
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strategy
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strategy
Reductions in Force:
• using formulas• based on position
• bump up for age
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strategy
Cost Savings Can be Risky:
• some employers just giving ESA minimum
• employees may be more likely to litigate
• may face class actions• at least give a small top up
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strategy
Negotiating:
• leave room to negotiate• time can be your best defence• negotiate only after signing date for
all employees
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strategy
Employees on Leave:
• using restructuring to get rid of employees on leave
• impact of media hype • legal risk – ESA and human rights• when to notify the employee – timing
is everything
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strategy
What To Ask For:
• signed release• restrictive covenants
non-solicitation confidentiality
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delivering the news
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delivering the news
• how to address reductions in force• when and how to deliver the news• minimizing the pain and uncertainty
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after the termination
• keep notes of the meeting• provide a timely ROE • cause = M (dismissal)• without cause = K (other)
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after the termination
Unconditional:
• letter of reference (at the termination meeting)
• ESA payments even if negotiating• outplacement counselling
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Questions: