Organisations are usually prompted to lay off staff due to a number of reasons. Chief among them is the downturn in the economy. With the recent lay-offs and rightsizing especially by tech organisations, the webinar, which was organised earlier this month by Stren and Blan Partners in collaboration with BusinessDay is imperative.
The webinar, themed, “Layoffs and Rightsizing of the Workforce: Legal Considerations and Best Practices” featured panellists who are experts in the labour and employment sector.
Notable were Hon Justice N.C.S Ogbuanya, Presiding Judge of the National Industrial Court of Nigeria (Owerri Judicial Division); Marvis Odogu, Team Lead, labour & employment at Stren & Blan Partners; Dion Masher, Executive and Head Employment Practice, ENSafrica, Ivie-Imasogie-Adigun, Group Head, Human Resources Sahara Group.
The webinar provided insights and knowledge on the legal considerations surrounding layoffs and workforce rightsizing, as well as best practices for organisations that are considering these measures. The event was moderated by Onyinyechi Ukegbu, Head, Legal Business Unit at BusinessDay and Adenike Oguntoye, an associate at Stren and Blan Partners.
Marvis Odogu provided clarification on the difference between layoffs and rightsizing. He stated that layoffs are drastic steps used by organisations to terminate employment to cut costs and address immediate business and economic challenges.
Rightsizing, on the other hand, is a process of adjusting the size or composition of an organisation in order to meet the immediate or future needs of the organisation. Rightsizing may include the hiring of new employees and termination of employment.
He noted that “while layoffs are usually a short-term approach to solving business challenges, rightsizing entails a long-term approach with the overall objective of optimising the performance of the organisation.”
Hon. Justice Ogbuanya shared common mistakes pitfalls layoffs and rightsizing by organisations in Nigeria observed from his experience in the judiciary. He noted that layoffs and rightsizing are recognised as redundancy under Nigerian law and that labour laws are weak when it comes to the issue of redundancy.
Redundancy is defined under Section 20(3) of the Labour Act as “…involuntary and permanent loss of employment caused by excess manpower”. The lacuna in the provision of section 20 of the Labour Act is that it failed to stipulate what can lead to excess manpower.
Read also:Legal and regulatory framework for courier and logistics operations in Nigeria (2)
This has created various positions on the law.
However, Ogbuanya noted that factors such as technological advancement, acquisition of a company, or even restructuring have been considered by the courts as valid grounds for declaring redundancy
Dion Masher speaking on South African jurisprudence noted that the concept of layoff and rightsizing are recognised under the laws. Speaking to the duties of the employer in this regard, he stated that employers must ensure that they comply with laid down regulations during the severance process to forestall avoidable issues.
He added that given that the loss of employment is involuntary on the part of the employee, employers should also allow for fairness and empathy.
Ivie Imasogie-Adigun of Sahara Group highlighted possible causes of layoffs from the view of a human resource expert.
According to her “new companies come with their own philosophies on how to run a company, and most times have to rightsize for the type of business they want”. Other causes include new ownership which is also similar to mergers and acquisitions, and technological advancements.
She also noted that another trend in the labour sector is the great attrition in organisations. She stated that “there is a serious talent war which is forcing organisations to rethink the kind of employment contracts they have with employees”.
In general, the event proved to be captivating as the panellists shared valuable insights and advice on how organisations can manage their workforce effectively during times of challenges and uncertainty by presenting scenarios and practical tips.
The Panellists noted that organisations can manage their workforce effectively by complying with regulations, applying fairness in the severance process and ensuring that employees are provided with a complete severance package.
