Since closing down four manufacturing plants can lead to many employees losing their jobs, the most ethical thing to do is to inform the employees about the potential layoffs so that they can prepare themselves. According to the Worker Adjustment and Retraining Notification Act, or WARN Act, employers should give workers six-months notice in advance. This time is adequate for workers to go through retraining programs and start looking for other jobs. The management should be truthful to the employees. They should tell them why they are closing down the four plants; for example, it could be because they are not very efficient. Being honest makes the employees more receptive to the message. The management should also tell the employees how they plan to help them with the transition. The employer should also let the workers know that they will be compensated. According to the Older Workers Benefit Protection Act, older workers above 40 should be given the option of accepting severance packages and waiving the right to take the company to court. This law exists because older workers may feel discriminated against because of their age during layoffs. In this case, the boss should tell the 56-year-old that they are going to be laid off and be given something of value.
It would be ethically wrong for the boss to keep the older worker because they are a friend. Workers should be retained according to their ability to adapt to the changing business environment. The organization should begin fresh recruitment after closing down the plants.