Question

WARN Act Business Ethics and decision-making; analysis of HR Law 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. to access the WARN Act. Click here https://www.ecfr.gov/cgi-bin/retrieveECFR?gp=1&SID=f18db61fea39724441204e2bfcd16e29&ty=HTML&h=L&n=pt20.3.639&r=PART For your report, evaluate management’s human resource plan of action for the immediate plant closing, including the following items: • 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? Submission Details: • Compose your report in APA format, with a title page, brief introduction and conclusion, body, and reference page. (Body of paper should be 1-3 pages)

Answer 1

Introduction

When workers, employees work in a firm not only they but their families are also affected by their decision, it impacts their lifes and future. A decision which might be seen as unethical can be taken in hard times also.

Q.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?

Ans - As WARN act (Worker Adjustment and Retraining Notification Act) gives protection to workers, employers, their families and communities by making it mandate to provide 60 days of notice of plant closing, mass lay off etc. here in this case

From the Employer point of view

Pros

Employer can provide some time to workers and employees to find another job and they will get some time to save themself from this suddena act.

Cons

1.) Firm is unable to pay, It will be a big financial burden on the plant as Firm is already facing financial issues.

2.) Firm has no contracts anymore, there is no work to do, as the whole workforce will be idle and of no use.

3.) Procedure of winding up will be delayed. Giving the 60 days notice will delay the winding up process.

From Employee point of view

Pros

1.) They will get a 60 days tenure to find another job and some financial aid for 2 months which will save them from sudden stroke

2.) As it is mentioned that the working staff was known about the situation, but recieving the 60 days notice means they can plan their future according to that and it will not create any fuss.

Cons

As the firm don't have any contracts anymore, the workers will be idle because there will be no work to do.

Q.2 Consider not only the legal issues, but also ethical concerns and workplace morale?

Ans - No doubt closing a venture at a short notice and making unemploying this much of staff can create some legal issues, but if we talk about in ethical way it is not correct becuase

1.) Unemployment of this much people is never can be a true thing. they will face financial problems and which will impact their families and communities also.

2.) It will bring a burden not only to them but for their famiies also, their needs and future planning will be impacted by this.

Q.3   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?

Ans. - Yes, Management's decision of immediate plant closing is the correct plan because

1.) They didn't had any choice, this was the last option they had, they fighted till the last

2.) Management tried to keep the business with the hope of last contract but due to its fail. management has taken this decision.

3.) They don't had enough funds to pay the workers for 60 days that's why they have taken this decision, they were already suffering from financial problems.

I will consider this decision of management a correct decision which was taken in unfavourable circumstances.

In general cases WARN act says that a firm should provide the 60 days notice to the employees before terminating them, but there are some exceptional cases in which it allow to terminate without any notice. The above case is one of them

According to the second exceptional case mentioned in section 639.9, WARNS ACT, " When the closing or mass layoff is caused by business circumstances that were not reasonably foreseeable at the time that the 60-days notice would have been required (i.e. abusiness circumstances caused by some sudden, dramatic and unexpected actions or conditions beyond the employer's control)"

this clause allows the firm for doing what it is doing. and in this case employer has mentioned this as soon as possible after the cancelation of their last contract.

Q.3 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?

Ans . - As this sort of cases are sensitive because many people are depending on this decision, generaly managers don't have much thing to do, they have very less alternative option to enable the company open like -

1.) Solding their business to another firm

There are other competitiors, business giants presents in the market, selling them the business can give a aid or can revive the things back to normal.

2.)Selling a stake

Management can sell a stake to another firm depends on negotiations, it can give some fuel to them to apply new strategies

3.) Taking unsecured loan

This are high intrest loans which can rebost the firm, a better financial plannning and major changes will be required to run the business

Q.4  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?

Ans . - Company can demonstrate with three factors

1.) As Company was facing financial problem because of losing business it is nothing to hide, whole market is always aware about this sort of scenarios, they decided to keep going till their last contract.

2.) Employees and workers were well aware about the situation of the firm, it wasn't hidden.

3.) Firm was surviving till the last option they had, management was working in good faith with optimistic view to run the business.

Conclusion

As the situation changes, due to which management was bound to take such hard decisions. We can't say those were unethical because management had no choice and it was taken in good faith and they had done everything whihc was possible for them.