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Letting GO

Letting GO

But that level of employee participation may be the exception rather than the rule.

"I remember one employer who had to implement the dismissal of employees by a drop-dead date 'without fail'," says Swebeck. "Imagine the CEO's shock when he was told by an Industrial Relations Tribunal, on application by a union, that all such plans were off - by way of injunction - until there had been proper communication with employees and their union.

"In another reported case, an employer was ordered by the tribunal to reinstate all the employees it had made redundant because the employer had failed to follow its own procedural guidelines on redundancy," he says.

"There are a lot of misconceptions as to what people are entitled to; people form their own views and adopt stances which inevitably end up in the hands of solicitors," Brown says. Managers, such as CIOs, can find retrenchment issues especially difficult, he says, particularly where there is a more unionised work force where selection criteria for who goes are very important. "It is very difficult to make selection judgments without there being some element of subjective analysis. There is no substitute for the manager making selection decisions but this leaves them in an unfortunate position."

While Brown says he is loath to be seen as a lawyer instantly recommending the use of lawyers, he emphasises that "if the emphasis is on procedure, it's best to call in the experts from the HR or IR department". Ultimately, Brown says, managers must satisfy themselves on three issues: the right selection decision has been made; the payout is fair and equitable; and the process is proper and adhered to. "HR professionals should have this as their stock-in-trade," he says.

Swebeck agrees. "Management should always involve HR - or an organisation with the relevant expertise and experience - in any retrenchment program," he says. "Experience with this situation is critical."

He references the case of a large, Sydney-based media company that was advised by its overseas board that "75 heads" had to go. Local management was dismayed, and sought advice on the various HR and legal issues surrounding the impending dismissals. The project involved weeks of strategic communication and legal planning with all levels of management. The legal aspects of the dismissals were carefully mapped out, including the obtaining of privilege over sensitive documents. A mini due diligence was carried out on all the employment contracts, awards and enterprise agreements.

"While there was no union membership, the communication planning proceeded on the assumption that employees were eligible to join a union, and that one or more of the dismissals might be challenged in the Industrial Relations Commission," says Swebeck. "Retention plans were drawn up to cover the survivors. Outplacement and counselling services were engaged, as were separate financial advisers for each employee to be made redundant. The strategic plan covering all these matters was presented to the overseas board. No claim was made on the company. In fact, many employees expressed their desire to return when 'things picked up'.

"This case is very different from the one involving a manufacturing company that secretly prepared a list of employees to 'go' and communicated the names via e-mail about a week before Christmas. Understandably, the matter ended up in the Industrial Relations Commission and the Anti-Discrimination Tribunal."

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