Answer:
The issue here is quite simple.
It is one of Job Description versus Person Specification.
The job description is a costume position and a food service position which requires servers to wear clothing designed and issued by the casino.
The person specification requires that the staff must not gain upto 7% of their current weight.
The Issues:
On one hand, the company treated very important pre-recruitment policies/processes as post recruitment HR issue. The company probably believes that everything can be fixed with a policy. Unfortunately, this doesn't always work like that.
In addition, to mandate the workers to observe a fitness program until they returned back to shape is a reactionary policy. A better approach assuming it was already late (as actually it is in the case study) to start from a clean slate, is to put the staff on nutritional diet that would help them stay on or below required weight as far as their health was not affected.
Advice:
It would be in the best interest of the company to redesign its policy and put staff on a nutrition program that helped them stay on weight rather than set aside monies for a weight loss program without pay. This would translate to an increased total cost to company per staff.
However, it would also be translating to lower attrition and elimination of potential lawsuits. For an employee that was employed as a food server could sue if her position is being made forcefully redundant.
More proactively, the company must redesign the Job Description and Person Specification for such roles so that from the beginning prospective employees know what to expect and even look forward to it.
Cheers!