Human Resources Policy Manual Section-3 (EMPLOYEE SEPARATION)

SECTION 3. EMPLOYEE SEPARATION

3.1 Employee Separation.     Cessation of employment is a common event and can take place for various reasons. Hence, it is necessary to ensure timely and accurate handling of the process of removing employees from the company pay roll which is consistent with positive employee relations practices. This policy sets out the conditions and procedures relating to separation of employment from _________. It aims to ensure that _________ is in line with good employment practice and complies with the statutory requirements.

3.2          Categories of Separation.

3.2.1      Resignation.

1. Voluntary separation on the request of the employee.
2. Resignation with or without notice.

3.2.2 Termination.  The Company terminates the employment with/without assigning any reason but by giving 2‐3 months advance notice as stipulated in Contract Agreement/ Appointment Letter or pay in lieu.

3.2.3 Discharge. Termination of service of the employee by the Company for reasons of physical or mental incapacity or continued ill health of the employee or such other similar reasons not amounting to misconduct.

3.2.4 Dismissal. Termination/separation in which the employee is removed from the pay roll on grounds of misconduct.

3.2.5      Deceased.           The death of an employee while in active employment.

3.2.6 Redundancy.     Reduction in manpower due to changing business needs or when work is no longer available.

3.3 Resignation.  It is the policy of the Company to make a reasonable effort to retain good employees who appear to be resigning due to reasons which might be corrected. When an employee announces his/her intension to resign, immediate steps should be taken to determine the real causes, and where possible and desirable, steps to be taken in order to retain the employees.

3.3.1 Notice Period.     A contract of employment may be terminated by either party giving notice in writing or payment in lieu as specified in the contract agreement/appointment letter. Unless otherwise specified in the contract of employment/ appointment letter, the notice or payment in lieu to be given by either party for termination of employment is as follows: 

3.3.2 The length of notice to be given by either party in the event of an extended probationary period shall be the same as during probation. 

3.3.3 Employees are not allowed to use outstanding compensation leave or annual leave in lieu of termination notice. Similarly, maternity leave cannot be served as notice for termination of employment. 

3.3.4 If an employee has applied for annual leave prior to submission of his resignation and the approved leave falls within the notice period, he must obtain re‐approval from the HR Department.  

3.3.5      Procedure. 

1. An employee who wishes to terminate his employment must submit a letter of resignation (specimen at Annex L) to the Appointing Authority through the departmental head. The departmental head calls him/her for a discussion and, particularly if the employee in question is a good performer, tries to determine if the cause of the resignation is a genuine one and which can be resolved. If, after this interview, the employee still wants to resign, the departmental head accepts the resignation and forwards it to HR Department with his recommendation. 

1. When an employee serves advance notice, immediate removal from duties may occasionally be desirable to minimize the adverse effect on other employees or to allow the separated employee to seek new employment.

1. On acceptance of the resignation HR Department issues a letter to the employee with copy to Admin, Finance and other concerned departments to the effect that his resignation has been accepted. The employee obtains necessary clearance for settlement of dues, if any, on a prescribed form as given at Annex M. Admin Department completes all relevant formalities and completes the termination.

3.3.6      Return of Company Property.

1. Upon leaving the service with _________, the employee must handover to his Head of Department/concerned department or designated officer all accounts, contacts, data, records and documents, whether in paper, tape, diskette or electronic form, related to his job. 

1. Before leaving finally the employee is required to return all company property to his Head of Department, the Administration Department, IT Department and/or the Human Resources Department as appropriate. _________ reserves the right to deduct from the resigned employee's final payment an amount equivalent to the value of any property which is not returned or is damaged and any amount due to _________. 

3.3.7 Exit Interview.    The Human Resources Department will normally conduct an exit interview with the resigning employee to obtain a better understanding of his needs and to solicit his feedback so as to improve the overall working environment and conditions in _________. (Exit interview format is given at Annex N). 

3.3.8. Final Payment.   The final payment including basic salary, job related payments or reimbursements, payment in lieu of accrued annual leave and money due to the employee, if any, will be paid to the resigned employee by cheque or cash within 30 (thirty) days from his effective date of resignation. 

3.3.9      Calculation of Salaries. 

1. Salary payment in lieu of termination notice (calculated on the basis of calendar days):

Monthly basic salary  

X No. of calendar day(s) in lieu of notice No. of calendar days in the month

1. Final salary payment (calculated on the basis of calendar days): 

Monthly basic salary  

X No. of days employed in the month No. of calendar days in the month

3.3.10 Withdrawal of Resignation. Withdrawal of resignation must be made in writing by employees, recommended by their Heads of Department and approved by HR Department. 

3.4 Termination. It is the policy of the Company to make reasonable effort to retain good employees. Personnel turnover is expensive for a number of obvious reasons. Before termination all facts must be carefully reviewed. Because of special circumstances performance of an employee may not be satisfactory. This may be averted by arranging a transfer of the employee where his/her output may improve and thus prove mutually beneficial to both employee and the Company. 

3.4.1      Procedure. 

1. The services of a permanent employee may be terminated with/without assigning any reason by giving 2‐3 months advance notice (as stipulated in the Employment Agreement/ Contract) or pay in lieu. 

1. This should normally be done in the case of unwanted employees.

1. The notice period need not be calendar months. Notice may be given at any time during the month.

3.5. Dismissal. Dismissal is a severe act of punishment and before such action is taken, strict observance of rules and disciplinary procedure as laid down under policy on Disciplinary Procedure (Section 9) as well as Labour Act 2006 (for non‐management staff) is necessary. The action is taken where the employee has committed misconduct.  

 3.5.1. While the law recognizes an employer's right to terminate the employment of an employee with legitimate reasons, Heads of Departments must cautiously exercise the right in order to minimize the adverse impact on other employees/their departments or _________. 

1. 1. 1. Unless the subject matter is of a very serious nature where termination of employment is inevitable, Heads of Departments are advised to adopt the disciplinary procedures as specified in Section 9.  

1. 1. 1. Approach.     If a Head of Department wishes to terminate the employment of an employee, he should consult the Human Resources Department about the approach to be adopted. 

1. Termination by Notice or Payment in lieu.   If an employee's performance is unsatisfactory or not up to the required standard; or his working attitude is poor; or he is found to be unsuitable for the job, _________ may lawfully terminate his contract of employment with notice in writing or payment in lieu as specified in the contract of employment/appointment letter. This is the most common approach to termination of employment by an employer for minor and/or trivial transgressions. 
2. Summary Dismissal for Misconduct (Without Notice or Payment in lieu).   If an employee is charged for misconduct he will be summarily dismissed following the procedure for dismissal (Section 9). This approach of termination of employment by an employer should only be applied to cases where an employee has committed very serious misconduct or fails to improve himself after the employer's repeated warnings. 

3.6. Discharge. Where an employee in the opinion of the Management is incapable or has ceased to be capable by reasons of infirmity of mind or body or continuous ill‐health or for such other reasons not amounting to misconduct, the competent authority may discharge him / her on medical ground subject to medical examination to that effect by a civil surgeon/ registered medical practitioner. To discharge an employee on such ground his past medical records and civil surgeon/registered medical practitioner’s certificate should be used as supporting evidence. If an employee who has not completed one year of continuous service will not be entitled for any benefits.

1. 1. Deceased Employees.    As a good employer _________ would like to ensure that the family members of any employee who embraces death during the service with the company receive all the benefits that the deceased employee is entitled to get from the Company.

Retrenchment form Service.    An employee may be retrenched on ground of redundancy consequent upon the abolition of the concerned post after giving him/her compensation equivalent to thirty days basic pay for every completed year and part thereof in excess of six months or gratuity under the conditions of entitlement to the payment of gratuity whichever is higher. 

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