In: Economics
what are the moral obligations of a company planning to engage in downsizing and layoffs?
What rights and obligations do the management have?
What rights and obligations do the workers have?
What must they tell their shareholders and other stakeholders?
Which of these are social obligations?
Which should be legal obligations?
Moral obligations of the company
Moral obligations of the management
Provide as much information and fair warning as possible. Some companies provide “pre-layoff” workshops designed to help employees understand the why, when, and how of being downsized. Regular, open, honest communication is critical to foster employee trust that is crucial during downsizing efforts.
Procedures are perceived as fair if they are made consistently, without self-interest, on the basis of accurate information, with opportunities to correct and the interests of all concerned parties represented and following moral and ethical standards.12 Not only is it the right thing to do; a significant business case can also be made for process fairness.
Allow employees the opportunity to say goodbye. Resist the temptation to suspect or devalue employees who have been cut because of business necessity.
Rights and obligations of workers
Rights:
In general, the employee's rights to receive a final paycheck depend on whether the employee quit or whether the employer fired the employee. These conditions are to be specified in contractual agreement between an employer and an employee.
Right to receive severance pay
A severance agreement is a contractual agreement between an employer and an employee. The agreement typically entails the following terms: the employer will provide the terminated employee with a severance package in exchange for the employee's promise not to sue the employer.
Right to health coverage
Terminated employees have the right to health insurance coverage after separation from their employer. The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986, grants terminated employees and their families the right to continued healthcare coverage for a limited period.
Unemployment Compensation
A terminated employee may be able to replace some lost income by receiving unemployment compensation. If qualified, the unemployed worker may receive compensation while searching for employment.
Obligations:
Honour restrictive covenants.
Some issues can be addressed at the start of employment, by negotiating restrictive covenants that impose confidentiality, non-competition and non-solicitation obligations on the employee.
Social obligations of company towards their employees
Note: I haven't answered 2 questions as the context is not specified accurately.Hope you find other answers helpful.