One of the largest railway strikes in 30 years took place in recent weeks as 40,000 workers protested the threat of job cuts. Their employer, Network Rail, is looking to lay off up to 1,800 people as it prepares to roll out new technologies in a bid to save more than £100 million annually after a post-pandemic drop in passenger numbers.
Transport Secretary Grant Shapps has claimed this union action will cost around £150m in lost revenue, in addition to a £450m blow to the wider UK economy. With such high projected costs, not to mention the lingering impact on individual travellers, the government has called on the parties involved – the rail operators and the unions representing the workers – to negotiate a deal.
Earlier this year, we saw the impact of a company taking such matters into its own hands when P&O Ferries laid off 800 employees unannounced for trying to cut costs. In the current situation, the management of Network Rail is following a consultation process with the employees involved. It has offered voluntary redundancy in an effort to mitigate the impact of its modernization plans that will lead to the layoffs, with more than 5,000 workers applying so far, according to news reports.
Unfortunately, layoffs are a fact of life for companies, especially in difficult times such as the current economic environment. In such circumstances, companies often choose to take layoffs in order to create a more sustainable future for the company as a whole. And while firing employees is an unpleasant experience for all parties involved, the impact is of course greatest for the employees who lose their jobs. Companies must therefore find a way to implement layoffs with compassion, provide clear communication to all employees throughout the process, and provide ongoing tools and support for those who lose their jobs and those who remain.
So what should you expect? Employees at risk of being fired have the right to a fair dismissal process, supported by the Employee Rights Act 1996, which includes the right to meaningful consultation. According to the UK Advisory, Conciliation and Arbitration Service (ACAS), this should provide an opportunity to discuss the changes and why certain workers are at risk of being fired. If employees meet certain criteria, such as a fixed-term contract (usually a minimum of two years), they are also entitled to statutory severance pay. However, it is important to also check specific employment contracts and the company’s redundancy pay policy.
According to my research, layoff programs go beyond basic rights and can be implemented more smoothly if employees understand the business reasons for the situation. Business leaders must make clear why layoffs are taking place. For example, Network Rail discussed its plan to save by implementing technology such as drones for site inspections and to automate ticket sales.
To ensure that consultation is useful and beneficial, employers must also be able to clearly demonstrate to unions and their members how they have tried to cut costs through means other than layoffs. Think of reducing or selling unused assets or saving on purchasing costs. All reasonable alternatives to redundancies should be considered, such as possible redeployment of workers at risk of redundancy.
However, once it has been decided that layoffs will occur, a company must be ready and able to explain how employees have been selected and why certain areas of the company have been affected. In general, workers and unions should be provided with a clear plan for individual and collective consultation with expected timelines and effective communication channels. This will show all affected employees that all decisions surrounding the redundancy program have been carefully thought through.
For those workers at risk of redundancy, additional services should be provided to help adjust to life after the layoff. This can be support from the company itself, but also services from external providers up to three months after being fired. Examples are:
Retraining: where possible redundancies can be prevented by retraining employees to alternative, available and suitable roles. This depends on the role requirements and reasonable ability to transfer skills.
Counseling: Loss of income is extremely stressful and causes anxiety and financial worry. Organizations must have the necessary help to support the mental health of employees by providing access to free advice and personal support.
Transition: Employers can also provide alternative support, such as workshops on financial planning and mentoring, or on starting a business.
Supporting other employees
A more compassionate dismissal process should also take into account the employees who remain with the organization. During my research, I discovered that the way organizations deal with employees who lose their jobs can have a significant impact on the employees who stay in the organization. They may feel guilty or angry about co-workers losing their jobs, and experience lasting fear of job insecurity if more job losses are expected.
Treating all employees with compassion, fairness and respect during layoffs also benefits the management personnel responsible for conducting the layoff process. Again, widespread communication — not just with the union, but with the workers themselves — helps companies conduct the process with compassion. The other employees must understand the future vision and mission of the organization. Other ways to raise employee morale include investing in training and development, as well as recognizing work-related progress or achievements.
Layoffs cannot always be avoided, but the negative impact can certainly be mitigated for both those who lose their jobs and those who remain. And when unions work with management to ease the pain of layoffs, workers can at least leave the organization better equipped for the future.