Are seniority-based layoffs discriminatory? The adverse impact of layoffs on designated groups

The objectives of this paper are: first, to determine whether layoffs dispr oportionately affect members of employment equity designated groups, and, s econd, to assess the importance of seniority in any adverse impacts. Our hy pothesis is that seniority is an important criterion for layoffs and that, on average, designated group members tend to have less seniority and would therefore be disproportionately affected by layoffs. If this hypothesis is correct, then layoffs may constitute systemic discrimination since there is a reasonable alternative policy in the form of reduced hours through works haring, which would affect all groups similarly. Empirical tests confirmed that the probability of a layoff was higher for designated group members. T he role of the seniority system in this relationship, however was contrary to our hypothesis since the relationship between the probability of a layof f and designated group status was weaker at unionized workplaces than at no nunion workplaces. We conclude that The case for worksharing is strengthene d by its potential to reduce the systemic discrimination against designated groups which results from the use of layoffs.