KMH Labs is a diagnostic health services company located in Mississauga, Ontario. Its CEO, Neena Kanwar, is listed at #19 on the Top 100 Canadian Women Entreprenuers for 2006, up from #59 in 2005. KMH posted earnings of $ 22.8 million in 2005, and Neena and husband Vijay even made a very generous donation that same year of $ 5 million to a local hospital.
Sounds like a great woman entreprenuer and role model, doesn’t she? So then what makes such an outstanding human being decide then to lay off sales staff 5 days before Christmas? I guess it was a “business decision”, based on the outlying fact that KMH depends on radioactive isotopes to conduct their diagnostic testing. Due to the reactor shutdown this month at the Chalk River facility, I am sure this hurt their business, as it did a number of other businesses that depend on nuclear isotopes.
My issue is not the fact that KHM has laid off sales staff, who, by the way, are all long term employees and all with execellent performance records, my issue issue is with the methods by which they conducted the lay off. They had their Marketing Director call each sales rep and meet with each of them at a Tim Horton’s coffee shop in the locale of the rep. A very public meeting to deter any possible emotional scene. They were not asked to come into the office at all. They had no idea what was about to happen. I mean, hey, your manager asks to meet you for a coffee, and it’s a few days before Christmas….what would you think? The same scenario played out for each of the reps…they were told they were being laid off, and then handed an official letter stating such. When asked how long the lay off was to last or when they were expected to be called back to work, the answer was a vague “I’m not sure” and “I really don’t know”. This discussion was then followed with instructions to hand in all laptops and other electronic buisness tools to the head office before the end of the week (which was actually the very next day), and they would be paid up to and including the end of that week. Doesn’t sound like much of a lay off to me.
By Canadian law a company can only continue a lay off for 13 weeks before they have to finalize it as a termination or resume employment. More companies these days are taking full advantage of this by laying off employees for the full extent of the alotted time and playing the odds that the employee will seek other employment immediatelty so they will not be required to pay out severance packages. This is especially true in cases where the person is a long time (and dedicated) employee with many years on tenure within the company and a good track record which would make “termination for cause” impossible. The reality is that KMH (and other companies) play the favored odds that, like many people, their employees do not have substantial savings to wait out the lay off period and that the unemployment benefits alone will not be enough to support a family for 13 weeks. So here’s another thing – unemployment befits will only pay out on the salary portion of your regular income. These people are paid commission on top of their regular salary, which is really not much to begin with. The bulk of their income comes from commissions, much like any other sales role. Boy, are they smart!
Call me crazy, but I really don’t see that Neena and KMH have any intentions of ever bringing these sales people back to work. They have layed them off 5 days before Christmas, taken all of their business tools, and removed them from their servers before they were even notified of the lay off. Not nice Neena!! You’re not getting my vote for Top Canadian Women Entreprenuer in 2007, but you will get my vote for Most Insentive and Selfish Woman Entreprenuer…..I guess someone had to replace Leona Helmsley.
