Employees primarily associate mass layoffs with stress and fear for their employment, while employers associate them with a last resort before closing down their operations.
In today's article, we'll expand on the topic we touched on last week. We'll focus primarily on how to conduct a collective layoff procedure.
Employer's obligations
An employer who decides to carry out collective redundancies should first of all notify the trade unions (or, in their absence, employee representatives) and the district labour office about (among other things) the reasons for the collective redundancies and the proposed method of carrying them out.
As a result of the aforementioned notification, the employer will be required to conduct consultations with company trade unions (or employee representatives) regarding the intention and procedure for the planned collective layoffs. The most optimistic assumption is that the consultations will conclude with an agreement, based on which the employer will carry out the layoffs. In a less optimistic scenario, the employer, considering and taking into account the wishes of the unions/employees, will unilaterally establish regulations governing the conduct of employees affected by collective layoffs. The final step is to notify the district labor office of the agreement or regulations.
Once the above information and negotiation process is complete, the employer may begin issuing termination notices and paying severance payments. It is important to note, however, that this should be done in accordance with the terms specified in the agreement or regulations.
Severance pay, or how much will I pay for separation from an employee?
As a reminder, we would like to point out that an employer who dismisses an employee in connection with the collective dismissal procedure is obliged to pay the employee a severance payment.
It's worth noting that the amounts cited above represent the guaranteed minimum severance pay. An employer may pay an employee a higher severance pay. However, it cannot exceed 15 times the minimum wage, as determined by separate regulations.
Employees in the protection period and collective layoffs
Employees eligible for special protection may be given notice of termination of their current working and pay conditions during mass layoffs. This could involve, for example, a change of position or a reduction in the protected employee's salary. An employer may terminate existing working and pay conditions by submitting a notice of amendment. If the employee refuses to accept the new terms proposed by the employer, the employment contract would terminate upon the expiry of the notice period.
It is worth mentioning the compensatory allowance - if, in the event of a notice of termination of working conditions and pay, the salary is reduced, the employer is obliged to pay the employee an allowance, which is paid until the end of the period in which he or she would have benefited from protection against notice or termination of the employment relationship.
The process of collective redundancies imposes a number of information obligations on the employer, including informing trade unions and the district employment office in order to fully protect the interests of employees who will be left without means of subsistence as a result of these redundancies.
If you have any questions or concerns regarding collective dismissals, please contact our office.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of May 16, 2024
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