What is layoff and how does it affect workers and companies?

Layoffs have been a hot topic recently and are associated with news about mass layoffs.

What is lay off?

Lay off is nothing more than a cost reduction measure used by companies that results in the dismissal of employees on a large scale.

This dismissal can be temporary or permanent, and may involve part or all of a company's employees.

Therefore, the practice aims to adjust the employee structure so that the company can cut costs during periods of crisis.

Therefore, the practice can help companies, allowing them to maintain their budget and strategies, in order to avoid closure.

How does it work?

Lay off is a measure provided for by law and, as already mentioned, its objective is to avoid layoffs.

As a result, companies seek alternatives to avoid contract termination, such as converting full-time work into part-time work, time banking and bringing forward or granting collective vacations.

Therefore, in practice, the main objective is for companies to use this time of reduced activities or suspension of work to put their finances in order and thus be able to bring employees back.

In this context, layoff with temporary suspension of the employment contract works as follows:

The contract may be suspended for two to five months;
The union and employees must be notified by the company;
Employees must sign a document 15 days in advance that makes it clear that they are aware of and agree with the layoff;
Employees must receive the salary paid by FAT- Workers' Support Fund;
And if the contract is terminated during this period or up to 3 months after returning, the worker will be entitled to receive a fine paid by the company.

In the case of layoff due to temporary reduction in working hours and employees' salaries, it works as follows:

The company must sign an agreement with the union;
Respect the limit of up to 25% of work and salary reduction in the period of up to 3 months, which may be extended if the crisis continues;
In this case, the responsibility for paying salaries lies with the company and not with the FAT.

However, it is important to remember that in any of the types of layoff adopted by the company, the employer will need to prove the reasons why they need to adopt the measure.

What is the difference between layoff and dismissal?

In practice, the meaning of layoff can vary as the term has been used to refer to mass layoffs.

Therefore, the ideal is for you to be able to understand the difference between the two so that there are no doubts about what the practice really means.

In a simplified and summarized way, dismissal is the termination of the employment contract, on the other hand, layoff seeks to avoid the termination of the employment contract.

Therefore, while dismissal represents the end of the employment relationship, layoff aims to preserve this relationship.

And this is with the aim of helping companies and employees, including with a stipulated deadline for the resumption of activities in full.

How does layoff affect workers?

Although layoff aims to avoid dismissal, there are some consequences that affect workers in some way.

For example, the suspension of the employment contract, which maintains the employee's link with the company, but the salary to be received will be proportional to the unemployment insurance ceiling limit.

In the case of reduced working hours, the employee's working hours and salary will be reduced by up to 25%.

Therefore, it is ideal for employees to be aware of their rights during the period of temporary suspension of the contract or reduction in working hours. These are:

Receive a minimum amount equivalent to two thirds of their net salary, in cases where the worker receives more than the minimum wage;
Receive the benefits granted by the company's freedom;
In accordance with a collective agreement, receive monthly compensatory aid;
Carry out paid work outside the company.

How does layoff affect companies?

Lay off is the moment when companies going through a certain crisis seek to reorganize themselves in terms of reorganizing finances and strengthening business.

And when it resumes, the company will not need to go through new recruitment processes or the costs of new hires.

However, the fact that there is a need for a layoff conveys a negative image in terms of company management, since adhering to the practice guarantees a positive result.

Therefore, the ideal is to look for other alternatives before adopting the lay off, such as:

Identify and reduce costs, invest in technology, attract new customers, train employees, create good financial control and seek government incentive programs.

How to deal with layoff?

If you are a professional who is going through this situation, here are some tips on how to deal with layoff.

Reflect on your career and your trajectory and invest in new learning;
Update your resume and portfolio, invest in your personal marketing;
Network and maintain professional contacts;

However, for companies considering adopting the practice, in addition to evaluating the real need for layoff as mentioned above, it is ideal to always maintain transparency with their employees.

After all, they are your biggest collaborators, so keep in mind that when breaking the news, it is best to do so calmly and with all the necessary explanations.

This way, any confusion that may arise during this time, causing unnecessary problems between the company and its employees, will be avoided.

Conclusion

Although it is being interpreted in a different way than it really represents, layoff brings a possibility for companies to get back on their feet without the need for mass layoffs.

However, nothing can be done outside the rules stipulated and complying with the deadlines required by the CLT (Consolidation of Labor Laws).

And layoff also offers employees the possibility of continuing to seek improvement.

Therefore, it is important to always be in constant development and investing in yourself will always be a great option.

So if you want to know more, find out why personal marketing is the key to your career success.

Given that April 19, 2023

Career