Elon Musk has wasted no time to make changes at Twitter following his $44bn (£39.3bn) acquisition in October. According to reports, a number of employees have already been dismissed by Twitter, with commentators speculating that as many as 50% of the 8,000 strong workforce will soon be removed from the organisation.
Under Californian law, if more than 50 people are being laid off at the same time they need to be provided with a 60-day notice period before dismissal is confirmed. The Worker Adjustment and Retraining Notification (WARN) Act also restricts large companies from making mass layoffs without at least 60 days of advance notice. There are reports that Mr Musk is intending to terminate employment now, paying them the equivalent 60 days’ notice in lieu so that he can make his changes without further delay. However, a class-action lawsuit has already been filed by an unknown number of Twitter employees to allege that the company is carrying out layoffs without enough notice in violation of both federal and California law.
The UK has similar requirements for employers looking to make large-scale redundancies. Where an employer proposes to dismiss 20 or more employees as redundant within a period of 90 days or less, a minimum of 30 days’ notice must be provided before dismissal can be confirmed. This notice period increases to 45 days where 100 or more redundancies are contemplated within the 90-day period. During the consultation period, the employer must also collectively consult with the employees to make sure that they are given full information regarding the reasons for, and extent of, the redundancies.
Whereas Mr Musk is said to be paying the employees in lieu of the mandatory consultation period, the penalty for failing to comply with collective consultation obligations in the UK can be more severe. Any failure can lead to claims to an employment tribunal for a protective award of up to 90 days’ actual gross pay for each employee covered by the award. The risks of getting it wrong are therefore significant and highlights the need to take expert legal advice from the outset.