Mass layoff: how many people is it, what is it and by what criteria is dismissal considered mass?

There are different situations in which an employer has to terminate an employment contract with an employee. The manager finds a replacement to replace the resigned employee. The situation is worse in the event of a mass dismissal of subordinates. This phenomenon occurs for various reasons; it can occur at the initiative of the employee or the employer. In any case, you need to know what mass dismissal is, how and in what order it must be formalized according to the law.

What it is?

There is no specific definition of the concept of “mass layoff of workers” in labor legislation.
But after the 90s of the last century, due to a number of production, economic and other reasons, this phenomenon occurs quite often. A mass layoff should be understood as a situation in which the employment relationship with a certain number of employees was terminated over a certain period of time. It belongs to emergency situations.

In the Labor Code, collective dismissal or reduction does not have clear criteria.

What regulations is it regulated by?

It is important to carry out mass layoffs (downsizing) competently and correctly. This will help avoid problems with regulatory authorities. To do this, it is useful to know the provisions and norms of labor legislation.

The regulations governing mass layoffs of workers are given below:

Labor Code of the Russian Federation
. Approved on December 30, 2001 by Law No. 197. On August 2, 2020, an updated edition was released. The Labor Code does not provide specific guidance on when the dismissal of employees should be considered mass. According to the articles:
No. 74, if there is a threat of mass layoffs, an employer may introduce a part-time or weekly work schedule for up to six months;
No. 261 provides a list of employees who cannot be fired during a mass layoff. These include pregnant women, single mothers, and people raising a minor child.
Decree of the Government of Russia No. 99 “On the organization of work to promote employment in conditions of mass layoffs . Adopted on February 5, 1993 (as amended in 2014). It provides criteria for mass layoffs of employees.

The dismissal/reduction of how many employees is considered massive?

Some employers are wondering if mass dismissal means how many people according to the Labor Code. It all depends on the total number of personnel of the enterprise, the number of dismissed employees for a certain calendar period.

Russian Government Decree No. 99 “On the organization of work to promote employment in conditions of mass layoffs” describes all the signs of numerous layoffs. They should be used if the enterprise has not adopted regional or industry criteria.

The following should be considered a mass layoff:

liquidation of a company, regardless of its legal form, with more than 15 employees;
within a month, more than 50 employees filed an application to terminate their employment relationships;
more than 200 workers were laid off in two months;
Over the past three months, over 500 people have left the company.

Also, a mass layoff is considered to be the termination of labor contracts with more than 1% of employees due to a reduction in staff numbers or the liquidation of a company within a month in an area where the total number of economically active (employed) population does not exceed 5,000 people.

Possible problems with mass layoffs and ways to solve them

Mass layoffs of employees have many features. It is very difficult to avoid problems during such a procedure. To be fully prepared, you need to think through possible difficulties in advance and come up with ways to prevent them.

These include:

pregnant women;
single mothers raising children under 14 years of age;
single mothers raising a disabled minor child;
persons replacing parents of young children and disabled children.

If these categories are already on the list to be reduced, they must be removed immediately.

Dismissal of employees

Untimely notification of the employment center about the upcoming mass layoff of workers will be avoided by knowing the exact deadline for notifying the relevant authority: 3 months before the start of the actual staff reduction measures. If it was not possible to notify the employment center on time, the employer faces penalties of up to 3,000 rubles for an individual and up to 50,000 rubles for a legal entity.

The lack of written confirmation of the employee’s knowledge of the fact of the upcoming dismissal will not be discovered at the last moment if you monitor the familiarization with the signature of each employee with the document notifying about the upcoming layoff.

If the employee refuses to sign the relevant document, it must be sent to him by registered mail with notification, and then an act of refusal to sign is drawn up.

To avoid disagreements with the elected body of the trade union, a clear argumentation for the decision to lay off workers is necessary. If the union’s opinion is not motivated by anything, the employer has the right not to take it into account at all. A protocol should be drawn up based on any results of consultation with the elected body of the trade union. After 10 days have passed from the date of transfer of documents to the trade union, the manager can independently make the final decision. And if the union disagrees, a complaint is filed with the labor safety inspectorate, which makes a decision on the legality or illegality of the dismissal.

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Mass layoffs are a painful and difficult process for both employees and employers. Knowledge of the algorithm for carrying out the mass dismissal procedure and the legal rights and obligations of both parties will smooth out its negative consequences and leave a sad mark only in the employee’s work book and the employer’s reporting documentation, but not in any way on their relationship.

>The main criteria for mass layoffs: how many people is this? Features of the procedure, guarantees and payments

Possible reasons

Collective dismissal can be carried out for various reasons. This phenomenon becomes widespread in the event of liquidation or reorganization of an enterprise, modernization of work processes, abolition of an individual position, or reduction in staff numbers. Most often it is associated with the closure of a company.

It should be noted that the liquidation of an organization can be not only the initiative of the employer, but also a decision of the meeting of founders or the court.
Often mass layoffs or layoffs are due to economic reasons .
For example, due to the increased level of competition and a decline in demand for the goods sold, the company became unprofitable. Industrial disasters can also have a negative impact on the financial condition of the company.

The costs of compensation for damage can be very large and unaffordable for the enterprise. A temporary suspension of a company's work with the cessation of payment of wages (lockout) is the reason that most employees decide to terminate their employment contract and look for a more stable job.

Also, a massive outflow of employees is likely in the event of dishonest behavior by the head of the organization. For example, the employer fails to fully or partially fulfill the obligations assigned to him. The staff may not be satisfied with the working conditions or wages.

The legislation does not establish a specific list of cases in which mass reductions or dismissals can be resorted to.

Package of documents

All steps taken by the employer to implement a lockout must be documented. Below is a list of documents required to comply with the procedure.

new staffing table (in case of staff reduction);
bankruptcy court decision (in case of liquidation);
extracts from personal files of employees;
extracts from the minutes of the commission authorized to select candidates for dismissal (in case of staff reduction);
order on mass dismissal (listing names and signed by familiarized employees);
entries in the correspondence log indicating that the trade union and the employment center were notified in a timely manner about upcoming personnel changes;
final order of dismissal;
documents confirming the fulfillment of financial obligations to employees.

How is it done?

The procedure for carrying out mass dismissal depends on who is the initiator of the severance of labor relations, what was the reason for such a decision.

The procedure for mass dismissal at the initiative of the employer:

drawing up a new staffing table;
convening a special commission and deciding which employees to lay off. This takes into account the level of qualifications, experience, merits, personal characteristics, family circumstances of each employee;
notifying the trade union organization two months before the date of the planned reduction and receiving a reasoned opinion from it;
notifying the employment center within two months;
notification of all employees who were laid off. Must be carried out two months before the end of the relationship;
issuance of an order. It is drawn up in free form. A list of employees subject to dismissal and grounds for termination of employment relations are provided in accordance with current legislation;
settlement with employees. Payments of salary, severance pay, compensation for unused vacation days and other amounts due to the subordinate are made.

The procedure for collective dismissal at the initiative of company personnel:

employees write a collective statement to terminate the employment relationship and submit it for consideration to the management of the organization;
the employer reads the application and makes a resolution;
The manager takes all possible measures to maintain staff numbers. For example, makes changes to working conditions, increases wages, reduces shift duration, etc.;
the company's employer issues a dismissal order based on the submitted collective application (if the measures taken did not produce the desired result);
settlements with employees are carried out on the day of the actual termination of the employment relationship.

If there is a threat of mass layoffs of staff, then the following measures are taken to stabilize the operation of the enterprise and improve the situation:

stop hiring new employees;
notifying local administration of the risk of mass layoffs of personnel;
reduction of the working week, day;
termination of part-time employment;
re-profiling of the company's activities;
transfer of employees subject to layoffs to other places.

Expert opinion

Irina Vasilyeva

Civil law expert

If possible, the employer must take measures to stabilize the enterprise’s activities and maintain staff.

Features of the procedure

Since mass dismissal of employees often occurs as a result of staff reduction or complete liquidation of an organization or enterprise, during registration the director must rely on Articles 178-180 of the Labor Code of the Russian Federation.

The law provides a clear algorithm of actions:

Draw up a resolution to reduce the total number of employees.
Draw up a clear plan (schedule) for dismissal of employees.
Notify union members about future mass layoffs 3 months before the start of the contract termination process.
Notify the employment center about the planned increase in the total number of unemployed citizens in the near future.
Inform employees of the decision made at least 2 months before the scheduled date of dismissal.
Offer dismissed employees vacancies at a related company or a similar position (if possible).
Submit to representatives of the trade union organization 10–30 days before layoffs the entire set of materials on termination of cooperation with employees.
Prepare documents for each employee subject to dismissal to terminate the employment agreement.
Pay the full amount of severance pay to the category of employees to whom it is due, and make the final payment.
Issue work books to all persons and close other obligations to them, if any.

According to Art. 373 of the Labor Code of the Russian Federation, the head of the company must promptly notify the company’s trade union about the decision made. In response, a union or other organization that publicly represents the interests of workers in the company sends written confirmation of dismissal within 10 days.

In case of a negative conclusion of the trade union, the director of the enterprise should organize a joint meeting within 3 days to develop an agreed decision.

How to create an order?

Any approval results must be recorded. An order for the mass dismissal of employees should definitely reflect the following elements:

full name of the organization where the reduction is taking place;
date of drawing up the order and its registration number;
the estimated number of employees to be dismissed;
list of personnel subject to reduction (and positions);
signature of the laid-off employees confirming familiarization with the order.

The director is also obliged to inform employees about the upcoming dismissal at least 2 months in writing and give them an official notice to sign in the presence of third parties. At the same time, the manager is obliged to find a subordinate a similar place of employment in a similar specialty or, as a replacement, offer a position at a lower rate.

In the absence of timely notification, every employee has the right to file a complaint with the labor inspectorate or file a statement of claim against the company management. As a result, he may be reinstated at work and the company may be charged the amount of earnings for the entire period of forced absence.

How does the employer notify the union and the employment center?

Based on paragraph 2 of Art. 25 of Law No. 1032-1 “On Employment in the Russian Federation”, the liquidation of an enterprise or termination of the work of an individual entrepreneur, staff reduction and possible termination of labor agreements with employees should be reported to the employment center no later than 2 months in advance, and to a private entrepreneur - no later than 2 weeks before the start of the procedure.

If such a decision could lead to mass layoffs, then the period is extended - it is worth notifying the employment center no later than 3 months before the start of the planned activities.

An employment center is a territorial division of the labor and employment service. You can send him a notification by mail with confirmation of receipt. Notifying the employment service is considered a mandatory step in the procedure for terminating an employment agreement in the event of a mass layoff of employees. The body must prepare and try to find places to ensure that laid-off workers are not left without a livelihood.

Ignoring this rule may result in the director being brought to administrative liability under Art. 19.7 Code of Administrative Offenses of the Russian Federation.

A general template for such a notice has not been developed. The document is drawn up in any form. The main condition is to reflect the most complete information about:

reduction;
the timing of its implementation;
as well as the number of employees being laid off.

The position being eliminated, the profession and current specialization of the employee must be specified, and data on the amount of earnings must also be indicated.

A notification is sent to the employment center at the location of the company where the layoff is taking place.