Alternatives to Layoffs

When the economy goes bust — or, when tough times hit at your workplace, there are alternatives to layoffs to consider. Here's an overview of some strategies that have worked.

With a little help from defective machines, confusing ballots, voters eliminated from the voting rolls, police roadblocks at selected voting sites, his brother in the governor's seat, and lots of corporate money, George Bush has become President and the recession has begun. Layoffs are happening all over the country, not just in manufacturing plants but in the public and service sectors as well, as they anticipate fewer taxes coming in and less consumer spending.

Massive layoffs and plant closings have been announced by Lucent Technologies, General Electric, AOL Time Warner, DaimlerChrysler, Motorola, General Motors, Whirlpool, Gillette, Aetna, Amazon.com, Textron, Sara Lee, J.C. Penney, and Norfolk Southern. Delphi recently announced the layoffs of 11,000 workers while Lucent Technologies cut 16,000.

Four hundred thousand job cuts were announced in the first quarter of 2001. That is 187 percent higher than in the first quarter of 2000.

Are There Alternatives to Layoffs?

Many UE Locals are asking if there are alternatives to layoffs and some employers are also raising the issue. This UE Steward will present some options to the regular layoff language that exists. Not all these options will work in every situation and each UE local should consider how to tailor them to fit their specific situation. In the public sector, options like job sharing may already be the norm. To begin, the following basic rule should apply.

Membership approval is required before modifications to the UE contract are made. The membership should be involved in preparing the proposal, given adequate time to study it, and have proper notice given before conducting a vote.

Making changes to the contract, even temporarily, is serious and should only be done with the support and approval of the membership.

This is especially true in the case of modifying or temporarily modifying an important section of the contract such as the layoff and recall clause.

Why Look for Alternatives  to Layoffs?

The two biggest reasons for the union to look at alternatives are the cost of health insurance and trying to keep members working. By keeping members working, or on layoffs for short time periods, members have a better chance to maintain their health insurance.

Some employers want to look at alternatives because they are afraid that laid-off employees will take other jobs, and when work picks up again, they will have to train new people. So far this recession has hit the high technology and auto industries the hardest, but there are still jobs available in other sectors.

Why May Employers be Opposed to Layoff Alternatives?

The answer usually is money. They want to reduce costs and most alternatives to layoffs mean that employees remain on the health insurance plan and therefore reduce the amount of money saved by the employer.

1. Voluntary Layoffs

With summer approaching, some locals have considered the option of allowing voluntary layoffs. Usually in these situations members volunteer for the pending layoff. Many UE locations do such layoffs in inverse order, that is, the most senior employees are offered the layoff first. These employees do not exercise their rights to bump but instead are laid off from the work place. If there are no volunteers, or not enough volunteers, then the regular seniority system takes effect.

For example: The employer says 10 workers are to be laid off. Five senior workers volunteer for the layoff. Now the employer only needs five more, so the contract language is followed. The returning employees have all the bumping rights that the contract offers.

Usually the recalls from layoff are done by following the contract language.

HINT: Some UE Locals put a limit on how long these voluntary layoffs can last. One local made the employer agree that at the end of three months, if there was still a need for layoffs, the senior employees who opted for the voluntary layoff could exercise an option to return to work. They would return to their old jobs and the normal layoff procedure would be used. Another local has the members inform the union if they would like a voluntary layoff and the Union then informs the employer. This stops the employer from harassing workers they do not like into taking the "voluntary" layoff.

Here is contract language that one UE local negotiated to cover the voluntary layoffs:

In the event the Company determines that a short term layoff of a specified duration is necessary, employees will be given an opportunity to volunteer for layoff in accordance with their seniority, in the affected area, high seniority first.  Once the temporary layoff ends, the employee will be called back to their former job with no loss in seniority.  If the temporary layoff becomes permanent, the employee will be called back to their former job with no loss in seniority and the Company will layoff in accordance with section 3(a).

2. Job Sharing

Another option is job sharing, that is, several employees fill one job, each working part time. This is more common in the public and service sectors than in manufacturing.

Example: The employer announces that one clerical position is to be eliminated. Joan a senior clerical worker, informs the union that she wouldn’t mind working part-time for several months and would share her job with Pete who is scheduled for layoff. The two union members agree that Pete will work the mornings and Joan will work afternoons. If, at the end of three months, Pete is not called back to his job then he will go on layoff and Joan will resume working full-time. The union steward points out to them that they should not get maneuvered into doing the work of Pete’s old job along with Joan’s work.

The union should police the work to make sure Joan and Pete do not get pressured into doing the job the employer eliminated. The benefits of this situation are that Pete gets to remain working, at least part-time, with continued health insurance.

3. Shorter Work Weeks

Here the idea is that everyone works a shorter work week to spread the work out and keep union members from being laid off. Many UE Locals have done this at one time or another. The key to making this work is to have a time limit put on how long the shorter work week will last. Some UE contracts state that a shorter work week will only be put into effect with the "mutual agreement of the employer and the Union," with the Union retaining the right to terminate the shorter work week at any time.

In another UE contract the employer is limited to having a shorter work week once a year and the number of weeks it can last is defined. The UE members at one college voted to allow members to voluntarily reduce their work week by one and a half hours per week. This time would go to other workers who were in danger of being laid off. This action stopped anyone from being laid off.

If the reduced work week drags on for too long some members will begin to call for the return to the normal layoff and recall procedure.

Check the Unemployment Laws

Unfortunately many members are accustomed to working overtime and base their budgets upon this extra pay. With a shorter work week they begin to feel a pinch. Many state unemployment programs allow workers to collect partial unemployment checks for weeks that are less then 40 hours. In Massachusetts for example, there is a special program called the "Job Sharing Program" to aid workers whose work week has been cut to four days. The requirements are very strict however; if a worker doesn’t work all of the 32 hours they will not receive anything.

4. Curtailing Overtime

A basic union principle has long been that when union members are laid off, those that remain working should not work any overtime. UE locals should try to get members to live up to this principle of solidarity, recognizing that there may be some limitations on the union's ability to do this. Many contracts and/or past practice allow management to force people to work under certain conditions. Under certain contractual situations a refusal to work overtime will put the union in legal jeopardy. When the overtime occurs in a work area where no union members are laid off it becomes hard to refuse the overtime. But even with all these difficulties, the union should continually work on the employer to curtail the overtime when workers are laid off.

Thanks to Ron Flowers, Al Hart, Bruce Klipple, Freddy Garcia, Leah Fried and Dennis Painter for providing information on alternatives UE locals have developed.