DEFINITION of 'Zero Layoff Policy'

A type of company policy that dictates that no employees would be terminated as a result of business based purposes dictated by th economy. This policy does not exempt termination as a result of poor performance or other violations of the employment contract.

BREAKING DOWN 'Zero Layoff Policy'

Having a zero layoff policy has a positive effect on employee morale, especially during rough economic times, as employees do not have to fear being unemployed. However, the company may need to implement other unpopular cost cutting measures (such as reducing benefits or hours) in order to make up for the costs of not laying employees off.

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