Answer to Question #193370 in Management for kavita

Question

Students are required to get into groups of 4 and work on the following topic: Critically analyze the inclusion of the new clause in the Employment Relations Act (ERA) section 24 where the COVID 19 Pandemic has been declared an 'act of GOD' thus allowing employers to lay off employees. Discuss the impact of this change on all stakeholders including staff and the organization

Answer 1

Impact on staff

• Fear of losing jobs
• loss of livelihood if one is laid off
• Depression
• Anxiety and isolation
• Marital and family problems due to financial losses

Impact on the Organization

• It occurs direct cost- pays to outgoing employees, uses placement services for temporary help, and pays overtime to the remaining employees.
• Increased turnover- frequent resignation of employees from their job due to watching their colleagues leave involuntarily.
• Emotional distress- Because the layoff disrupts the status quo, employees have to pick up extra responsibilities and form new work relationships. This in the end causes low productivity, hence low profits.
• Decreased customer loyalty- When a company lays off its employees it sends out a message to customers that it is undergoing some sort of crisis.