The role of reasonable notice legislation in organizational downsizing decisions in Canada

Abstract

Purpose

The purpose of this article is to explore the impact of reasonable notice legislation on organizational mass lay-off practices in Canada.

Design/methodology/approach

Information regarding 1,147 mass lay-off events in Ontario were examined using aggregate level data analysis and ANOVA to develop an understanding of the role of legislation on mass lay-off practices. The data represent all Notice of Mass Termination provided to the Ministry of Labour from 2001 to 2008.

Findings

The results suggest that organizations choose to absorb inefficiencies during mass lay-offs to reduce expenses associated with reasonable notice periods. Additionally, the findings suggest that the use of mass lay-offs is polarized, with some organizations executing frequent large lay-offs, whereas others execute infrequent smaller lay-offs.

Research limitations/implications

This research provides evidence that labour legislation influences organizational decision-making during time of significant organizational change, using an ad hoc review of past organizational event. Further research is required to establish the theoretic basis (motivation, rationalization and perceptions) for these empirical results.

Originality/value

As downsizing becomes a business norm, the role of government and the concept of reasonable notice remain largely unexplored. Challenges with data availability continue to pose a significant barrier to effectively integrating both internal and external factors that influence organization level downsizing decisions. This article is very timely and extends the current discourse, by providing a preliminary exploratory analysis on the role of reasonable notice legislation.

Citation

Chhinzer, N. (2014), "The role of reasonable notice legislation in organizational downsizing decisions in Canada", International Journal of Law and Management, Vol. 56 No. 5, pp. 387-392. https://doi.org/10.1108/IJLMA-06-2011-0002