Employers have to be careful that they comply with all their legal requirements or the cost reduction may not be as much as they hoped.
Employer rights
However, employers have the right to manage their businesses, and as long as they stick to legitimate business plans and stay within the legal parameters, implementation of staff reductions can proceed relatively smoothly.
During the last big economic downturn, a financial services provider reduced its workforce three times over a two-year period. Employees to be terminated were determined by performance ratings and one employee in particular was told in 2010 that he didn’t have a role with the organization any longer. The worker complained about harassment from his supervisor, but the employer didn’t investigate because it had already terminated him.
The worker filed an unjust dismissal complaint, claiming that the restructuring was a lie and his termination was really because of his harassment allegation – he was the only employee in his section to be terminated.
However, an adjudicator found that the restructuring was a legitimate reason for termination and there was evidence of many other employees being terminated, even though none were in the worker’s section.
