another company fires about 2,500 employees by video call

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A few months ago the fintech Better.com became world famous for firing 900 employees at the same time in a single Zoom video call. A practice that seems to be spreading among companies in the United States, since now another North American company, in this case Carvana, which is dedicated to buying and selling used cars online, has fired some 2,500 workers by the same method, according to Protocol.

The case of Carvana. In the latter case, the dismissals would not have occurred at the same time in the same video call, but in several of them, although they all took place on the same day, last Tuesday, May 10, so those Zoom meetings were massive.

The company has defended itself, noting that less than half of the firings took place over video calls, and that they had as many in-person conversations as they could. However, the Carvana spokesperson refused to specify to Protocol the number of people who had been fired from the company by Zoom, and did not initially dispute that the number of remote dismissals was 2,500 workers.

The motives. Carvana’s explanations for these layoffs are the same as those offered by other companies in similar situations: poor economic results and inflation. Although, in this case, it seems that the company has also tightened its belt on the directors, who would have given up their salary for the rest of the year to help pay the compensation to the workers they have fired, according to a document of the United States Securities and Exchange Commission.

Background. In addition to Better.com, which is the best known precedent, other companies have applied this formula to quickly get rid of a massive number of employees. It is the case of tripactions, which fired 300 workers through the same video call. Although, in this case, the travel company had a good excuse: the layoffs occurred in March 2020, a few days after the global pandemic broke out, when mandatory quarantines were the order of the day and it was not allowed to workers go to their jobs unless strictly necessary.

Impossible actions in Spain. This type of massive and remote layoffs can only occur in poorly regulated labor markets, such as the United States or India. In Spain, although it is also possible to dismiss collectively, the law protects the worker much more, the process is longer and in no case can it be resolved with a simple video call or a mere email, as we already explained in Xataka.

To begin with, if a large company like Carvana – which had around 6,600 employees before the dismissal, according to its LinkedIn page – wants to take on an action of this nature and scope, it cannot simply notify those affected and proceed to fire them, since the Workers’ Statute It states, in article 51, that dismissing 30 workers or more in companies with more than 300 employees is considered a collective dismissal, a procedure governed by very strict and specific rules.

Negotiation. To proceed with a collective dismissal in our country, the company must first notify the workers or their representatives in writing (and by a means by which the receipt is accredited, such as a burofax) of its intention to initiate the process, open a consultation period and convene a negotiating committee, among other formalities, just to start dealing with the termination of the contracts, according to the Ministry of Labor and Social Economy.

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That writing must reflect the reasons why this decision is made and the date of termination. Once this is done, the employer can optionally call that person into a video meeting to dig into the details and approach the termination more tactfully. The document also has to be individual. In other words, it would not be possible to replicate in writing what the CEO of Better.com did in Zoom and write the same text to fire several workers and thus save time.

Unfair dismissal. In Spain there have already been some cases in which a telematic dismissal has been considered inadmissible because the employer has not accepted the legal procedure to do so, although in this case it was for using the WhatsApp instant messaging service. Thus, the Superior Court of Justice of Extremadura considered inadmissible the dismissal of an employee who was notified of the termination of her contract by the chat application because it was not considered a reliable means of communication and because it did not reflect the reasons for the dismissal, according to the Legal News portal.

In this way, the Spanish laws protect workers much more than the American ones, where verbal dismissal is considered legal, the procedures are fewer and the margins of mass dismissal are wider.

A few months ago the fintech Better.com became world famous for firing 900 employees at the same time in a…

A few months ago the fintech Better.com became world famous for firing 900 employees at the same time in a…

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