Reduction in Force

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POLICY STATEMENT 136
REDUCTION IN FORCE

PREPARED BY:                           Renee Poole, Director of Human Resources
SUPERSEDES:                            3/13/03
ADOPTED BY COUNCIL:          10/30/14
EFFECTIVE:                               10/30/14

Purpose:

A reduction in force may become necessary due to economic circumstances, program elimination or alteration, shortage of work or funds, or privatization of existing programs.  This policy is intended to provide a guideline for implementing reductions in the workforce as covered by the Town’s Personnel Ordinance. 

Any regular full-time and part-time employee who has completed at least six months service with the Town and who is under the authority of the Town Manager is eligible for benefits under this policy.  This policy does not cover seasonal or other temporary employees, nor does it cover employees who have not completed six months employment with the Town.  Regular employees on approved leave are covered by this policy.

Procedures:

Determinations of reductions  – The Town Manager must specify that there is a need to reduce the workforce, and will determine if there is a need to reduce overall town positions or if the reduction will be limited to specific positions.  If only specific positions are involved, the Town Manager will determine the class/classes or functional area(s) and number of positions involved.  The identification of employees subjected to the workforce reduction will be based (in priority order) on (1) the organization’s need for the employee’s services and skills; (2) the quality of the employee’s past performance and past conduct; and, (3) seniority in the position.  Based on the above criteria, the department head will develop a written rationale for the proposed reductions and changes in positions and personnel, and present to the Human Resources Director, Assistant Town Manager, and Town Manager.

Notice Requirements – Employees who are subject to the reduction in force will be given at least 30 days written notice prior to termination. 

Privatization Efforts – The Town will use its best efforts to encourage the private contractor to hire qualified Town employees whose positions have been eliminated. 

Reduction in Force Assistance and Outplacement Services – The Town will take the following steps to assist employees who are subject to the workforce reduction to locate other employment within the Town.

The Town will attempt to locate alternate Town employment for affected employees whose past performance has met minimum performance requirements.  Where possible, employees whose performance is in good standing and who occupy positions that have been identified for elimination, will be given preference in consideration for existing  Town vacancies.  This will take the form of having an opportunity to interview for such vacancies, if basic qualifications are met, without competition from other potential applicants, except other employees affected by the reduction in force.  Affected employees must cooperate fully with the Human Resources and hiring departments in the placement process to continue to be considered.  Pay decisions regarding transfer, demotion, and promotion will be in accordance with the Town’s pay policies.

The Town may provide appropriate outplacement services either internally or through an outside agency.  Services could include (1) career counseling, (2) resume and application preparation, (3) allowances for reasonable time off for interviews and employment follow-up, (4) reasonable office support and telephone access to use for the job search, and (5) access to listings or referrals of other employment opportunities. 

Severance Pay – Employees whose positions are being eliminated under a reduction in force will be eligible for seniority-based severance payment if all of the following conditions are met:

1.  The employee has not refused reasonable alternative employment with the Town.

2.  The employee has not refused reasonable employment offers with a contractor (in the event of negotiated privatization).  (A reasonable employment offer shall be defined as one in which the employment offer does not result in a permanent reduction in the rate of pay of more than 20%).

3.  All financial obligations to the Town must be current or satisfied in accordance with their terms.

Severance pay will be paid out on the last check of employment and is not subject to employee or employer retirement contributions, and as a result, will not be included in computing the average final compensation for retirement purposes.  Any period covered by severance pay will not be counted as an active employment period for the purposes of earning retirement service credit or for qualifying for employer-paid insurance coverage.  Severance pay is based on total years of service with the Town of Cary; however, affected employees will not receive credit for any evaluation period their performance was rated below the standard level of performance.

Less than 1 year                         2 weeks base pay equivalent

1 but less than 5 years               4 weeks base pay equivalent

5 but less than 10 years             8 weeks base pay equivalent

10 but less than 15 years           12 weeks base pay equivalent 

15 but less than 20 years           16 weeks base pay equivalent

20 years or more                        20 weeks base pay equivalent

Benefits –Employees who receive severance pay will be eligible for continuation of insurance coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 as amended (COBRA), at the employee’s expense. The Town’s portion of employee health insurance will be paid for the corresponding number of weeks for which the employee received severance pay.  Employees who retire with full or early retirement may be eligible for retiree health benefits as provided by the Town of Cary.  Tuition reimbursement for courses previously submitted and approved will be honored by the Town upon submission of proper documentation required by the tuition reimbursement policy.  Employees who are terminated will not be required to pay back the Town for tuition reimbursements received within the previous six months of termination.  Affected employees may continue to use the services of the Employee Assistance Program for three months after termination.  No other benefits will apply after termination of employment. 

Reinstatement – An employee who has been subject to a reduction in force may be considered for internal job listings for a period of two years.  However, an employee who has elected to receive severance will not be eligible for re-employment with the Town of Cary for the number of weeks calculated in the severance payout, unless repayment is made in advance of re-employment for any severance received in excess of the period of actual separation from the Town.  Employees who apply and are rehired within two years will have their vacation accrual rate reinstated.  

Supplemental Measures and Changes to Policy – This policy can be amended or revoked without notice to employees.  Also, in order to possibly prevent or minimize the impact of a reduction in force, the Town Manager, in his sole discretion, may implement creative measures such as reducing work schedules, temporary reassignment of employees or other such measures.