Procedures in Serving Termination and Severance Package

Dismissing an employee is often a difficult task for an employer. Nevertheless in serving an employee his walking papers certain procedures must be followed. In order to do this, an employer must first prepare a good severance package for a departing employee.

The article, “Writing a Termination Letter – If you Offer a Better Severance Package “, posted on February 15, outlines the procedures for writing a better termination letter and a severance package.

According to the article, the ideal package must contain the following information:

• A notice of termination stating the reasons

• The terms of settlement in the severance package

• The benefits offered by the company

In serving a severance package to an employee, certain procedures must be followed. This includes:

1. The employer should inform the employee on his termination

2. The employer must cite the reasons for his termination

3. The employee must explain the benefits of the severance package

4. The dismissed employee must be given a chance to explain his side of the issue

5. The employee has a right to see and meet with his lawyer

6. The severance agreement must be signed by the employee

In most cases, a severance package is offered in exchange for a release and it is considered a company option. If a worker quits his job voluntarily or dismissed with cause, he is not entitled to any severance package from the company. It must be remembered that employment severance packages are a company’s prerogative and is being offered as a gesture of goodwill to a former worker.

However, in some cases, legal disputes arise when a dismissed employee files an illegal layoff lawsuit. This happens when a company lacks the preparation to deal with the issue.

To properly address this problem, a company must anticipate this and hire the services of a lawyer who can draft a termination notice and a severance package even before the need arises. In terminating an employee, one should make sure that a worker has signed a termination form to set the records clear.

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What Employers Should Know About Severance Package

Severance package is a package granted to employees after being laid off from work. This may also be given if an employee is terminated for authorized causes or even when the employee resigns depending on the arrangements.

However, if you are an employer you should know that there is no law forcing you to provide severance package. You can only be forced to do so under the following circumstances:
1. If you signed a contract granting severance package;
2. If severance package is regularly given to employees of a certain rank or position;
3. If you verbally agreed to provide severance package; or
4. If is mentioned in the employee’s handbook even without a contract.

Under the above cases, you may be sued for damages if you fail to provide your employees with the severance package.

If you want to grant your employees severance package, the usual amount is based on the employee’s monthly salary. Others include bonuses in the salaries as part of the computation of the severance package. There is no law providing for basis of severance package.

Just remember that you cannot be forced to enter into negotiations on the subject of severance package. Other employees may want to include severance package as part of the employment package. It is up to you if you want to include severance package as part of the deal. In the end it’s how much you want the said employee that counts. If you think that he could really be an asset to you then go ahead negotiate.

If you need help with understanding more about severance package and its consequences, consult your expert employment lawyers about it.

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