Introduction The global economic environment is currently experiencing instability and is becoming weaker and weaker. This has forced many businesses across the divide to take drastic measures to cut down the cost, such as restructuring their operations and reducing their workforce (Cascio, 2005, p.40). However, these decisions are becoming very difficult for the employers since they have to justify their actions to the labor organizations and the court. Regrettably, these actions have led to court tussle between employers and employees who feel they were unfairly selected (Wagar, 2001, p.852). Terminations of employee’s contract or layoffs as part of company downsizing policy have generally caused employment discrimination claims. These claims characteristically have always stem from the protected group of workers, for instance disabled employees, minorities, older employees among others, who have been affected by these decisions (Cascio, 2005, p.41). Additionally, employee’s contract terminations have also resulted into retaliatory acts such as legal actions. On other occasions, get laid off for participating in legal activities such as complaining of harassment, poor working conditions, and request for accommodations among others (Gibson, Hurd & Wagar, 2004, p.892). Layoffs originally started as an avenue for companies which were doing bad to shed of some of their employees in the face of weak demand, but today companies which are trying to increase shareholders value have adopted this strategy. Wagar, (2001) defined layoffs as a permanent reduction of employees in an effort to enhance company’s efficiency and effectiveness. Therefore, layoff is part of downsizing which is a process involving the reduction of staff’s complement through streamlining, retrenchment, re-engineering among other activities. Most public sector organizations always rush to stuff layoff as a quick solution to their financial problems. Therefore, the top management must scrutinize all other factors before deciding to layoff workers (Zyglidopoulos, 2004, p.12; Wagar, 2001, p.852). Economic justification of layoffs has always been cost reduction and increase of revenues. Introduction of new technologies also influences staff reduction when redundancies is aimed at enhancing output per unit input or reduction of cost of production. Change in consumers’ tastes and preferences impacts on staff reduction especially when the company cannot sustain product lines. Briefly, all factors that affect company’s demand have significant impact on the employees (Gibson, Hurd & Wagar, 2004, p.892). Legal environment for layoffs The public sector is an incredibly large employer, considering the many government institutions, entities and agencies. The legal rights of the employees acts as the moderation on the employers not to abuse their discretion of disciplining and firing employees at will. Heads of government entities and supervisors are also employees and therefore, together with the junior employees have legitimate bases for their rights in the constitution (Zyglidopoulos, 2004, p.13). However, the government can limit or influence exercise of constitutional rights by the employees through several w