When employees are let go from their job, they are paid severance. This could have a huge impact on the company’s finances if there are company wide job cuts. Alternately, companies opt for a “Working Notice”. A working notice was most recently was opted by Target Canada.
A Working Notice informs affected employees about the situation and are required to work until a particular date as per the memo/contract after which they are let go. This negates the need to pay a lump sum of severance and only pay the statutory severance.
Advantages for Both Parties
- One of the biggest benefit for the organization is cost effectiveness.
- Working notice also allows the employees to secure a job elsewhere before being let go, this allows for a smooth transition.
Risks
However, there can be some risks involved when opting for a working notice, namely:
- A working notice can demotivate employees, which is likely to affect the quality of work and even other coworkers that may not be directly affected by this decision.
- If an employee has had a problem with anger or grudges in the past, it isn’t recommend to use this strategy since they could be vindictive and cause damage to the company.
- It is also not considered practical to give a senior employees or those with access to confidential information a working notice, while the employee is still responsible for any illegal behavior, it is best to avoid the scenario altogether.
Oftentimes, it becomes very apparent that working notice doesn’t really work and companies that do decide to go through with a working notice should also have a backup plan just in case.