Read the following situation: The local textile plant has a workforce of 55 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. Click here to access the WARN Act.
Answer the following questions in your report: Do you agree with management’s human resource plan of action for the immediate plant closing? Why or why not? Explain in detail and include the legal implications. What does the WARN Act say that allows the plant to close inside of the 60-day notice period?
What possible alternatives do the managers and HR have in handling this scenario? If no other attractive options exist and they must depart in two days, what kinds of assistance can the plant give the newly unemployed workers? Given the financial restrictions, is outplacement assistance a possibility?
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