Working for a company means that there are company policies that you’ll need to adhere to so that order and security are guaranteed within the workplace. These policies help regulate the processes of certain actions and how things operate within the workplace and they’re the reason why most companies are able to function properly.
So, let’s say that a particular employee in a company has to be terminated, one cannot just end that person’s employment without following the proper termination guidelines and severance pay procedures. This is why companies must have termination and severance pay policies and this article will teach you how to create your own. You may also see policy templates.
Sample Termination and Severance Pay Policy
Employment Termination Policy
Employment Separation/Termination Policy
The Purpose of Having a Termination and Severance Pay Policy
It should be pretty obvious that this particular policy will only apply to those employees who wish to cease being a part of the company’s workforce. By having this policy, you’ll be making it clear to the employee on how the termination process will go about. Both parties stand to benefit from knowing the right procedure as this can prevent problems such as misunderstandings and distrust between the company and the employee. The company is bound to handle any cases of termination of employment as dictated by law with discretion, professionalism, and official documentation need to be looked after properly. In essence, the point of this particular policy is to make sure that both parties understand the process of how the termination should go to ensure that it goes smoothly and that neither will face consequences.
The termination and severance pay policy should apply to all of a company’s current or prospective employees. Nobody should be exempted from the rules and regulations regarding termination must be applied to everyone lest one wishes to be charged with unfair treatment in the workplace. So, in the event that you’re in charge of handling the termination procedure, you must take your company’s termination and severance pay policy into account to ensure that you handle everything in an orderly and professional manner. You may also see company policy templates.
What is Termination of Employment?
A termination of employment happens in the event that an employee’s contract is terminated due to actions that he/she has committed or through that of the company. The dismissal of an employee can be described as voluntary and involuntary. Basically, the employee may have been terminated because he/she willingly left, or the employee had to be terminated because of certain actions that he/she has done that have negatively affected the company.
If we’re talking about the voluntary dismissal, then examples of which would be the following:
This is a common occurrence in just about every company. In the event that you were to receive a resignation letter from an employee, that would just mean that he or she has finally decided to move on to another company to further his or her career, or there may be other reasons as to why the employee has decided to leave. You may always conduct exit interviews to help you understand why the employee has made the decision to make his or her exit from the company as it may just help you figure out what needs to be changed in order to retain your current staff.
Sometimes an employee may have stayed for a good amount of years in a company and has decided that it’s high time that he/she takes a break from work. Or, there could be a possibility that certain conditions have forced the employee to retire earlier than one would have hoped; a good example would be that the employee has met with an ill-fated accident and has lost the ability to work effectively in the workplace. In the event that any of those happen, they will be required to submit their resignation letter to ensure that the process takes place immediately so that they may also retire as soon as possible.
3. Failure to show a specified number of days without notice
Your company should have an absence policy which all employees must strictly follow. There are only a number of absences that an employee can take without notice before being considered as one who has deserted his/her position in the company. So, let’s say that your company’s absence policy states that an employee may only have up to 4 consecutive unnotified absences before being subjected to the grounds of termination. If a particular employee within your company has gone beyond these 4 days without any notice of his/her absence, then that person is considered as someone who has willingly left the company and is on the grounds of immediate termination. You may also like policy templates in PDF.
4. Expiration or completion of a contract
Sometimes the reason as to why an employee’s contract has to be terminated as simple as a matter of the contract expiring or that the employee has fulfilled the contract. For expiration of contracts, if an employee decides not to renew it, then that would mean that he/she has decided to move on from the company and wishes for his/her employment to be terminated. For completion of contracts, these would usually be for temporary employment. If a person you’ve hired as a temporary employee was required to do a specific job and has already fulfilled everything that needs to be done in the contract within the amount of time set, then that would mean that the contract has officially been completed and that you no longer need the temporary employee’s services.
If one were to be terminated involuntary, then here are a number of reasons as to what could lead to the decision:
1. Termination with a cause
This is a very serious matter when it comes to working in a company. If an employee were to be involuntarily terminated with a cause, then that would mean that he/she has done something that may have put the state of the company at risk. A good example would be if the employee has shared confidential company information to a third party, risking the entire security of the business as well as its longevity in the industry. Whether it was intentional or an accident, an action such as that will immediately force the company to terminate the employee’s sample contract on the spot. This will reflect poorly on the employee as it will be placed on his/her record, meaning that other employers who inquire about the employee may obtain this information which could lead them to think twice before hiring the terminated employee.
2. Termination without cause
This means that the employee has been terminated due to reasons that are not related to one’s own misconduct or have not been notified that he/she has been terminated. A good example of which would be if the company has to make huge cutbacks and will need to remove certain departments, thereby terminating certain employees against their will. In the event that something like this does happen, the company will be required to provide severance payments to these employees. If they do not do so, then these companies can easily be charged with unfair termination and face lawsuits from multiple employees who were terminated for not being provided with suitable reasons for their termination.
What Can One Consider as Wrongful Dismissal?
A company is bound by the law to refrain from wrongful dismissals of employees. You do not want to end up in a situation where you’ll wrongfully dismiss an employee as this can have massive repercussions on your end in the form of a lawsuit. Wrongful dismissal may occur in cases when:
1. When an employee is terminated for an unfair cause – A good example of this is if an employee were to be terminated for sharing company information to competitors, yet there is no evidence that the employee has done so.
2. An employee is terminated without cause and is not given prior notice – So, if an employee were to be terminated unfairly, it’s even worse if the employee was not given any kind of notice before his/her termination. A person would want to be at least given 1-2 weeks notice or even a couple of days that he/she has been terminated by a company. If one were to be terminated on the spot without any warning, then he/she may file for wrongful dismissal against the employee. You may also see editable company policy templates.
3. An employee is forced into constructive dismissal – This is a situation where an employee is terminated due to an employer committing a serious breach of his or her contract. Basically, this happens if an employee is forced to resign because the employer has created a hostile work environment for the employee. You may also see employment at will policy.
Procedure for Employee Termination
In cases of resignation, the employee that’s exiting the company will be required to submit a formal resignation letter to his/her immediate supervisor. A notice is expected by the employee, consistent with the minimum notice requirement, so the company can arrange alternatives in handling the exiting employee’s workload as well as being given enough time to find a replacement. The resignation letter must be copied and submitted to the Human Resources department for record keeping purposes.
In cases of involuntary dismissal, the supervisor must submit an employee termination document to the human resources department on the date of separation or before that.
In the event of termination without a cause, the employer will be required to notify the employee of the impending termination within a good amount of time before the termination occurs. When severance pay is appropriate, it will be officially stated in writing. You may also like punctuality policy templates.
At all times, proper employee records will be kept containing all relevant documentation. A lawyer will be consulted prior to termination to ensure that all the actions conducted by the company are legal in the eyes of the law.
In the event that you would like to learn more in regards to how you should go about in creating termination and severance pay policies or anything related to the topic, then all you have to do is go through our site until you’re able to come up with the articles that can give you all the information that you will need. You may also like privacy in the workplace policy.