As the year draws to a close, a frightening wave of layoffs looms in many organizations. While receiving a termination letter may seem like a huge blow, there is often a glimmer of hope buried within – a layoff package.
Whether it’s the starting point for an exciting new chapter or a safety net to break your fall, a well-handled layoff package can turn a bitter ending into a golden opportunity.
But what do companies usually include?
The layoff package an employee receives depends on the type of contract they have, says Frederic Comin, a human resources and management consultant at Mace Foods.
“Those with permanent, retireable contracts and those with fixed-term contracts will enjoy the perks, but those who contract casually will bear the brunt.”
After receiving notice of your termination, Mr. Comyn says you are entitled to severance pay, which is determined based on the number of years you have worked.
“The minimum I’ve seen under the law is 15 days’ salary per year worked. But, depending on the company, it can go higher.
If gratuity, a payment made to an employee by an employer in recognition of long and meritorious service or for a special act or deed by an employee, were applied, Mr Comyn says it would be 15 days’ pay per year of work. However, the reward is not legally stipulated.
In addition, the employer must pay all earned but unused vacation days.
He adds: “The easiest formula I found to calculate the daily salary is to take your monthly salary, multiply it by 12, and divide it by 365. Thus, you get the daily rate.”
While layoffs are not the employee’s fault, Comin explains that some companies choose to pay a lump sum if they are still financially able. Conversely, if a company is closing due to a financial shortfall, it will often negotiate a pay schedule with affected employees.
“If the employee has an ongoing pension scheme, they will receive their contribution, but the employer contribution will be closed until early retirement age (age 50).”
Where is the insurance and benefits?
For medical or auto insurance, Comin says it’s good practice for companies to allow employees to keep using them until the end of the term.
“But you will find in some companies that some managers are malicious and will terminate the insurance, even though it does not benefit the company.”
However, one benefit an employee may not have is worker’s insurance, as it specifically covers employees. Overtime must be paid.
Unused sick leave? “You know sick leave is very difficult because it’s taken when you’re sick. So you can’t have unclaimed sick leave.”
If you get staff accommodation, your employer must give you at least two months to move out. For laptops and phones, Comin says the company often offers two options: either sell at a low price or ask the employee to return the gadget.
Can you negotiate a layoff package during the interview?
“Yes. You have a greater chance of negotiating before joining if you are a strong candidate who knows your worth and realizes that your skills are valuable to the organization,” says Belinda Nyima, management and finance expert at Nemsi Holdings.
However, she did point out that the interviewer might wonder why discussions about a layoff package came up even before you joined the company.
However, she points out that due to job insecurity, it is important to make sure you are protected in the event that the company closes or you are declared redundant.
“By the time you go for an interview, you will have done your research about the organization and what they do, how employees are taken care of, and the offerings you offer. So, as you negotiate, keep all of that in mind and even use your proposal as a baseline for them to present that to the organization if they don’t They didn’t have that before,” she says.
Any non-monetary benefits?
While companies do not need to offer outplacement services such as career counseling or job search assistance, Ms. Nehme says employees are at the mercy of their employer if they hope to reap such benefits.
“Since layoffs happen at unexpected times, it is advisable to hold a counseling session so that employees feel better.”