Legitimizing Workforce Reduction: A Review on Impact of COVID-19 Outbreak to the Economy

Abstract

COVID-19 outbreak continues to impact business organizations around the world financially. One major concern is the common practice of business organizations to reduce their workforce. Issues might arise from such management decisions. The purpose of this conceptual paper is to analyze the legitimacy of managerial decisions relating to workforce reduction. The methodology of legal analysis was used by referring to and reviewing literature in Malaysia, Singapore and the United Kingdom. Major findings show that management decisions on workforce reduction especially during the COVID-19 outbreak must accord with employment law and existing government measures. Apart from that, an employer's failure to resolve issues of workforce reduction according to the law and government measures would result in trade disputes and eventual court action. The findings of this study can assist employers to make sound management decisions with valid reasons in situations, not within their control.