Economic Layoffs And Legal Risks

(1) reorganization in accordance with the provisions of the enterprise bankruptcy law;

(2) serious difficulties in production and operation;

(3) the pfer of enterprises, major technological innovation or adjustment of the way of operation, and after the change of the labor contract, staff still need to be laid off.

(4) other factors

Based on the conclusion

Great changes have taken place in the situation, resulting in the failure of the labor contract to be fulfilled.

In the case of economic layoffs, the labor contract should be relieved according to the following procedures:

(1) to explain the situation to the trade union or all staff members 30 days in advance, and to provide information on major changes in the situation of the employing units, which reflect the production and operation status, the pfer of enterprises, major technological innovation, and the adjustment of the way of operation.

(2) put forward a plan for reducing personnel, which includes: the list of persons being laid down, the time for reduction and implementation steps, and the economic compensation method for the laid off personnel in accordance with the provisions of laws, regulations and collective contracts.

(3) seek the views of the trade union or all the staff and workers, and modify and improve the plan.

(4) report to the local labor administration department the plan for the reduction of personnel and the opinions of the trade union or all the staff and workers, and listen to the opinions of the labor administrative department.

(5) the employer's formal announcement of the scheme for the reduction of personnel and the formalities for the dissolution and termination of the labor contract with the laid off personnel shall be made. In accordance with the relevant provisions, the employer will pay the economic compensation for himself and issue a certificate for the reduction of personnel.

In accordance with the labor contract law, employers should pay attention to the following two points when making economic layoffs.

(1) when reducing personnel, priority should be given to the following personnel: A has entered into a long term fixed term labor contract with the unit; B has entered into an unfixed term labor contract with the unit; C family has no other employment personnel, and the elderly or minors who need to be raised.

(2) if the employing units reduce personnel and re recruit personnel within six months, they shall be notified of the displaced personnel and give priority to the application of the laid off personnel under the same conditions.

From the above provisions, we can see the strict and procedural provisions of the law for economic layoffs.

In case of the need for economic redundancies, the violation of legal procedures is one of the reasons for the lifting of different legal risks with the other two categories.

Moreover, the economic layoffs of enterprises often have a certain scale, and the legal risks arising therefrom have the characteristics of class action. Because of the relevance of legal risks, this legal risk is more serious than that of the first two kinds of rescission contracts.