M&L is faced with the problem of how to reduce its workforce by 170 due to a downturn in business. The workforce reduction is due to productivity gains made by a plant where new attitudes have been instilled in recent months, and because the company is shifting some of its work to a more modern plant where there is greater flexibility.
The workforce reduction is necessary because there are surplus employees. One hundred of the surplus employees resulted from changes within the plant which improved productivity. These changes included shifting to a team oriented culture and requiring that employees broaden their skill base. The company assured its workforce that layoffs would not be necessary when it brought about changes to the plant, but a downturn in the market, coupled with the plant's productivity, means that the company cannot stand by this agreement.
This makes the problem particularly difficult to resolve. When management "sold" the idea of reorganizing the plant to workers, it did so by bypassing the employees organization, which largely was against the changes. The employee organization felt that employees would lose their seniority and flexibility, but management was successful in taking its plan directly to employees and letting them decide.
The realization that their own productivity gains is resulting in 100 colleagues losing their jobs is not likely to sit well with the employees. This bears out the fears that the employee organization had initially, and may well erode the trust that employees had with regard to management. The problem is, therefore, not merely one of laying off employees, but doing so in a way which builds trust and helps the company maintain the productivity gains that were seen in recent months.
There is no requirement that M&L take any special action whatsoever. The company could continue to operate with the extra 200 people (or 170, if it lays off the temporary workers). However...