Analyze the following situation:
The local textile plant has a workforce of 100 full-time hourly workers, 12 part-time workers (less than 15 hours per week), and six managers that are salaried. The company has been struggling for about five years and has just lost its only major account with a sporting clothes company. Contract renegotiations have been intense for the past six months, but they collapsed two days ago. There is barely enough cash to pay workers for their last two weeks of work. In order not to incur additional payroll obligations to the workers, the company has called a meeting of all employees to announce the plant’s closing at the end of the week (in two days). Although the workers were not overly surprised, they were overwhelmed that so many would be seeking employment in their small community within the next few days. Even though the hourly workers are to be terminated at the end of the week (in two days), managers (those that are salaried) will receive their pay for another 60 days as they handle the closing of the plant.
Analyze this situation from the perspective of the company managers and the HR department by addressing the questions below.
Before beginning your analysis, read Section 639.9 “When may notice be given less than 60 days in advance” of the Worker Adjustment and Retraining Notification (WARN) Act.
Assess the purpose of the WARN act, (WARN Section 639.1). Present potential pros and cons of giving employees 60 days advance notice of a plant closing or mass layoff. What are pros and cons to the employer and employees? Consider not only the legal issues, but also ethical concerns and workplace morale.
Evaluate whether management’s human resource plan for the immediate plant closing is the correct plan. Is the plan to close in two days (without advanced notice) in violation of the WARN Act or is this plant following their legal obligation to workers under WARN? (Read WARN Section 639.9 when answering this question).
Utilizing this week’s assigned readings, justify recommendations for possible alternatives the managers and HR have in handling this scenario. What strategic planning might have enabled the company to stay open? Present types of employee assistance management might provide or recommend if workers must depart in two days. How could this company demonstrate ethical treatment of employees during the closing?