Employee Separation is one of the very important and crucial function / process of HR Department. This process, if not handled in an efficient manner, can lead to various legal complications.
Let's understand the term employee. According to various definitions an employee can be defined as:
- A worker who is hired to perform a job
- An individual who provides labor to a company or another person
- An individual who provides services for compensation to an employer and whose duties are under the control of the employer
An employee works for an employer and gets paid for his work and nothing else. The relation of an employer and employee has a beginning; they stay together for a while and then they separate. Beginning of the relation is called as recruitment process or talent acquisition that passes through selection phase and followed by induction. Staying together in the relation comprises the various phases such has performance management; career management; professional growth; development and etc. And the final stage of the relation is the separation.
Broadly speaking, in normal scenarios the separation between employer and employee can be due to any of the following three:
- Resignation - Employee decides to leave the organization.
- Termination - Employer decides to break the contract of employment.
- Absconding - When the employee decides to leave the organization without tendering his resignation or following the proper process of separation.
Apart from the above mentioned, the relation between employer and employee can also be terminated during the lay-offs (financial or economic crisis); during the process of mergers, acquisitions and take-over; or any other legal intervention by the state or central government.
Based on the type of employee that has been hired by the company, if local or an expatriate or a national of other country or if an employee is hired through outsourcing agencies, the process of separation and the documents involved in it also differs.
TYPES OF SEPARATION
This is the most common way of separation. Employee leaves his job and employment with his employer to pursue better opportunities; a better position at a better compensation package in a branded company (or better known company) in a same city and country or in a different city or different country.
So, an employee resigns for:
- Better compensation and benefits
- Higher position / level
- Challenging role
- To move from an unknown or lowly branded company to a highly branded and reputed company
- For foreign or international assignments
Usually, this process is perceived negatively by employees. In termination, an employer uses his right to terminate the contract of an employment. There can be many reasons for an employer to terminate the contract of employment but some of the common reasons are:
- Theft and etc
This is one of the most unethical, unexpected and unprofessional way to terminate the contract of an employment. In this, on one fine day an employee decides not to go to work. He does not care to hand-over his stuff. In case an employee decides to abscond (or run-away), it becomes very important to understand his motives and intentions. Employees can abscond in either or all of the below mentioned circumstances / situations:
- After stealing the confidential information or documents or database from the company.
- If the intentions of an individual is to commit a crime.
- If there is a work-pressure and stress and the individual is not able to cope-up with it (as it happens in call-centers, and other high-stress industries).
- If the employee has committed any crime outside the office and after working hours (such as murder or getting involved in terrorist activities or theft or any other civil crime).
- Then, when priorities are different. Employee has asked for leave due to some urgency at his home (or might be he is trying to escape from his work responsibilities) and at the same time his team also needs him in the office and his leaves are not approved.
- If he has got some exceptionally good opportunity that requires him to join immediately and he feels that the process of separation in his company is a bit too complicated. He assumes few things and do not really try to face the challenge.
- Lastly, it is a personality issue. Employees that abscond have different personalities. They are low in confidence. They are too weak to face the reality and challenges of life. They feel that running away from the problem is as good as solving the problem. They are cowards to take the problems head-on.
THE PROCESS OF SEPARATION
Once an employee gives his resignation to the department head or the management, it is important for HR to schedule the first meeting with him. Preferably the meeting should be scheduled within 24 hours or else it will give an impression that "no one really cares". Being a neutral department, the meeting should be administrated by HR Manager (Employee Relations Manager) or anyone senior to him to understand the root cause of separation.
- If the root cause is an issue with the reporting manager of an individual; or some conflict with a team-member or some other human issue, try to address the same with the concerned person.
- If the reason for resignation is better opportunity or a higher position, explain to him the Performance Management System and Career Management System of the company. If possible, show him his performance records. Do not make any commitment that you might not be able to fulfill, such as, "we will give you a promotion in this appraisal" or "will send you overseas for an assignment" and etc and etc.
- If an employee has given his resignation because he is getting a better compensation package, explain to him the grading system and compensation package of your company and also share with him the minimum possible increase that he might get in his next appraisal but do not give any hike immediately. You might be required to repeat this exercise after another couple of months. So, don't show any blood to the lion.
Any other reason of resignation, such as policies of the company, benefits, branding and positioning of the company, working hours and etc are beyond the preview and scope of this discussion with HR. Such issues cannot be changed to suit the needs, demands and requirements of one individual. However, if more employees are leaving the organization for one specific reason then the management should address the matter but this should not be done for one specific employee.
After the meeting give your feedback to the department head and advise him on whether to accept the resignation or not.
Once the resignation is accepted, issue the "letter of acceptance of resignation" to the concerned employee and inform the IT, Payroll and Finance Department.
Responsibility of the Department Head:
Now, the department head needs to plan the process of handover of duties, projects and assignments to other member(s) in the team.
- Let the departing employee complete all the tasks and assignments he has in hand.
- Do not assign any new project or assignment to this employee.
- If there is nothing to complete and proper hand-over is done, then relieve the employee as soon as possible.
It is a proven fact that once an employee decides to leave the organization and gives his resignation, they show less commitment, sincerity and dedication in their work. Hence, it is important to relieve them as soon as possible rather than them coming to the office and wasting the time of people who are dedicated to their work and resources of the company.
Responsibility of the HR Department:
HR, on the date of acceptance of resignation letter, should instruct the IT department to keep track on all the outgoing emails from the system of separating employee. All IT permissions and rights should be withdrawn from that employee and he should not be allowed to send any email to any other email ID except the office email ID's. He should not be allowed to copy or edit or delete any file from his system.
HR should ask the concerned employee to obtain no-due letter from all the concerned departments.
HR should calculate all the amount payable to that employee and the payment should be made on the last working day of the employee. On his last day, the company should also give him the relieving letter.
In case of expatriate employees:
Even in the case of expatriate employees, the process will be the same except that the involved stake-holders will be more. An expatriate employee is a responsibility of employer and hence care should be taken to ensure that everything runs as smooth as possible, till the very last day of the employee in the organization. Therefore, in addition to various departments within the company, the HR should also inform:
- The immigration office of the concerned country about the company's disassociation with the employee;
- The banker, healthcare insurance provider, landlord and other service providers;
(This is to ensure that these stakeholders shall not disturb the company to recover any cost or loss due to its ex-expatriate employee.)
Termination can be challenged in the court of law. Hence, care must be taken to document all the incidents that have led to the termination of an employee.
In case of disciplinary action, the company should take care that the proper procedure is followed. Warnings (oral and written) were issued to the employee and the whole incident is properly documented.
In case of non-performance, the required documents must include:
- Tasks given
- Expected performance level
- Evaluation criteria
- Actual performance
- Action required
Parties involved in the termination process include:
- The Reporting Manager
- The Department Head
- The HR and / or
- Any other senior member of the department
Once the decision is taken to terminate the contract of employment, the company should seize all the belongings of that employee - such as computer, drawer, access cards, laptop, ID Cards, files and etc.
Employee should be given the letter of termination clearly specifying the reasons of termination.
Based on the severity of the case, the company might decide to pay the employee for the notice period. For example, in case of non-performance he must be paid for the notice period but in case of any disciplinary action, theft or misconduct, he should not be. The entire amount due to him must be recovered.
The processes described in this article are just the general outline that must be followed in case of any separation and not any industry or company specific processes. Based on the employment laws applicable in the countries that they are operating in, companies can choose to be more stringent or lenient in their approach. The process described here is more amicable and ethically correct.
Once an employee decides to resign and leave the organization, whatever you may do but he will leave; if not today then tomorrow. On the other hand, if the employer decides to terminate the contract, he might change his mind, provided the case against the employee is not very severe.
Absconding, as mentioned above is in itself is a crime; something that only coward people do; such people just give-up without even making an attempt. These people run away from the reality of life and from the challenges that life offers to get best out of you and to make you master.
As an employee whenever you decide to leave the company, do it in a more professional and acceptable manner.
As an employer, whenever you decide to terminate the contract of employment of any employee, make sure that you document all the incidents in a chronological manner and have in your possession, all the required evidences. Unfortunately, decision of resignation cannot be challenged in any court and it is considered as a right of an employee but decision of termination can be challenged.
Employee separation is a big process and does not involve unilateral decisions. Be accurate. Be professional.