Handling Difficult Situations – Termination of Employment

Handling Difficult Situations – Termination of Employment

In this lesson, you’re expected to learn about:
– the final stage of the employment cycle
– the difference between redundancy, retirement, and resignation
– retrenchment and dismissal

The final stage in the employment cycle is the ‘termination stage’, in which workers leave the workplace on a voluntary or involuntary basis.

This stage needs to be handled carefully and sensitively by the human resource manager.

Work patterns and organizational operations have undergone radical change over the past decades and this has dramatically altered the movement of people into and out of jobs.

Due to increased international competition, many organizations — large, medium and small — have been forced to restructure.

As a result, there has been a marked increase in the number of voluntary and involuntary redundancies* being offered.

What does Termination mean?

Termination of employment is when an employee leaves a particular workplace, ending the employment relationship. Termination is usually managed by the human resource manager who must ensure that the employee is treated both fairly and within the law.

There are many reasons why employees leave an organization. However, it is possible to classify the different types of separation into two broad categories – voluntary and involuntary.

Employment Termination 

Most employers find dismissal of an employee to be a difficult process, regardless of the reasons for the dismissal.

However, when a dismissal is necessary, it is important for the employer to:

 Be informed about and comply with legislation.
• Treat the employee fairly and act in good faith.
• Handle the termination process in a professional way that preserves the employee’s dignity.
• Be careful about how much information is communicated to others about the facts and reasons for the termination.

[Optional] Types of Separation in HRM
Check out this article to learn more:
http://www.speakhr.com/types-of-separation-in-hrm/
Retirement

Retirement occurs when an employee voluntarily decides to give up full-time or part-time work and no longer be part of the labor force.

Until the mid-1980s, it was common for men to retire once they reached 65 years of age and women when they reached 60 years of age.

Since changes to legislation in the 1990s, there is no ‘official’ retirement age. People can now choose when they would like to retire.

A recent trend is for people to retire ‘early’ — that is, in their mid- to late 50s. The way businesses have approached employee retirement has also changed.

Today, many organizations provide advice and assistance to employees to help them prepare for retirement.

Resignation

Resignation, or ‘quitting’, is a voluntary ending of the employment relationship. People resign for a variety of reasons, including:

• the offer of a promotion with another business
• to start their own business
• boredom with their present job
• a change of lifestyle

Usually, the employee needs to give the employer sufficient notice of his or her intention to resign. The length of notice varies from job to job, ranging from a few hours for casual employees to a month for some professionals.

Whenever an organization wants to downsize — that is, decrease the size of its operation — it will not fill vacancies that have come about due to retirements and resignations.

Redundancy

Redundancy occurs when the job a person does is no longer necessary, usually due to technological changes, restructuring or a merger / acquisition. Unless the existing employee can be retrained for another job, he or she will be made redundant.

Redundancy can be either voluntary or involuntary.

1) Voluntary redundancy occurs when the organization wishes to reduce either the size or the nature of its workforce, and decides how many employees should be ‘let go’.

Employees are informed of the situation and given the opportunity to nominate themselves for voluntary redundancy.

2) Involuntary redundancy occurs when an employee is asked to leave the business against his or her will.

In this case, the employee is not at fault in any way; the decision to make the employee redundant is purely based on the ongoing needs of the organization.

[Optional] What Causes Employment Termination?
Retrenchment

Retrenchment is sometimes called redundancy, but there is a subtle difference between the two terms. Redundancy occurs due to the permanent elimination of some jobs, because organizational or technological change has removed the need for those particular skills.

Retrenchment is employee termination due to lack of sufficient work to keep the employee fully occupied. Retrenchment is a cyclical phenomenon tied closely to the level of economic activity. The end result of both retrenchment and redundancy is that the employee is out of a job.

HR’s Role

The HR manager must be aware of the rights of an employee in relation to redundancy and retrenchment, and must follow the correct procedures.

These procedures might include providing necessary information to the employee being made redundant or retrenched, a consultation process, time off leading up to the final day when the employee leaves, and organizing redundancy pay (sometimes referred to as severance pay).

The amount of redundancy pay will usually depend on how long the employee has been continuously employed in that workplace. Other entitlements, such as payment for accrued annual leave or long-service leave, may also be owed to the employee when they leave the organization.

[Optional] Difference between Lay-off and Retrenchment
Dismissal

There will be occasions when the behavior of an employee is unacceptable and it then becomes necessary for an organization to terminate the employment contract of that employee. This is known as dismissal.

The most serious form of dismissal is summary dismissal — when an employee commits a serious breach of their employment contract. For example, an employee who is drunk at work or is found to have engaged in criminal activity may be summarily dismissed. If an employee is given a summary dismissal, no notice is required.

Another form of dismissal is referred to as dismissal on notice, when an employee is not performing the job satisfactorily. Poor performance may be identified during an appraisal or performance process.

The amount of notice (or payment given in lieu of notice) will vary depending on a number of factors, such as whether the employee is governed by a particular award or contract, the age of the employee and how long they have worked for the employer on a continuous basis.

Selecting staff for dismissal requires awareness of laws to avoid litigation. Employees must be given proper notice and employers must comply with procedures established in law. To avoid misunderstandings, written warnings and/or notice are preferable.

Unfair dismissal occurs when an employer dismisses an employee for discriminatory reasons. This is an issue that both employers and HR managers need to be aware of. Some examples of discrimination under workplace laws include dismissal because of:

• absence from work due to illness or injury
• either belonging or not belonging to a trade union
• race, color, sex, sexual preference, age, disability, marital status, pregnancy, religion or nationality

Jim Rohn