The concept of employment for life does not exist anywhere and it is practically impossible, hence, at one point or the other the contract of employment would be brought to an end either by a voluntary act, based on the contract terms and conditions or due to natural circumstances that are beyond humans control. However, because of the knotty nature of employee exit and its implications on the individual, the organization and how it affects the Nations desire to see its citizens in active employment and see them contribute to the GDP it becomes crucial that employees exit must be well managed.
It has been said by this writer in another write up entitled: LETTER OF REFERENCE AND CHARACTER ATTESTATION: THE DUTY OF EMPLOYER OVER EX-EMPLOYEE that beyond the service period the employer has recognizable duties under the law to the employee and except the exit process is well managed these duties may be obstructed and clouded in absurdity.
In most organizations, it is the responsibility of the human resources department to keep records of employees and ensure that employment history and performances are well documented in both the employees personal record or file and the general HR record, hence, it is equally the role HR to manage employees exit and other post employment-related issues.
As a rider, it is important to note the statement made by Ranger Kidwell Ross (June 2011) in WorldSweeper.com, Even when youve done everything possible to reduce turnover, a fact of business life is that you will have employee leaving your company. It is a fact that people will leave but the process should be properly managed.
OBJECTIVES OF THIS ARTICLE
The key objectives of this article are to provide a guide on how to manage employees exit and guard against the unnecessary litigation and losses suffered by organizations due to unfair termination, wrongful dismissal, and loss of entitlement by employees.
Additionally, it is the intention of this writer to generate further discussions and cross-fertilized best practice ideas on her to support employees; post service and help them get on with their lives after the loss of a job or retirement.
BENEFITS OF A WELL STRUCTURED EMPLOYEE EXIT MANAGEMENT PROCESS
Whether the exit is initiated by the employee or at the instance of the employer it is important to make it as open (transparent) as possible and ensure that all loopholes are covered and procedures followed to the latter. Besides the fact that it puts the organization in good light and prevents losses of assets and minimizes the effect of turnover, the following benefits would accrue to the organization and the employees alike:
1. It will minimize disruption to workflow and processes in the organization due to sudden and unplanned exit of employee
2. It assists employee to have a smooth transition between active employment and post-employment years
3. It promotes the transfer of knowledge and experience from the exiting employee and the person that will take over his or her role
4. It ensures that misconceptions and negative perceptions held by an employee are corrected and misunderstanding addressed before the employees exit
5. It gives the organization feedback on its processes and procedures more so from the point of view of an insider.
6. It prevents vengeful act from a disgruntled employee and help mitigate any negative action that could damage the image of the organization
7. It shows present employee that your organization cares not just when they are in employment even after
8. It ensures that all matters between the employer and the employee are finalized such as outstanding salaries, accrued benefits, unpaid leave allowances etc.
9. Finally, in case of litigation, your organization will be able to come to justice with a clean hand.
WHAT ARE THE DIFFERENCES BETWEEN REGISTRATION, TERMINATION, DISMISSAL?
All the terminologies represent the process of separation from an employment relationship between an employer and employee, though they all stand for the same thing but are different in initiation, processes, and procedures. Basically, their voluntariness, involuntariness and who initiated the process will determine their differences.
Under common law and by the provisions of the Nigerian Labour Acts, termination of a contract of employment is seen as the process by which an employer or employee may bring to an end an employment relationship subject to the term of the written or implied contract. It will also connote the cessation of employment when the tenure of a contract ends without a renewal by the employer or willingness of the employee to continue with such employment.
Where there is a contract of employment it is required that such agreed terms must be followed substantively and procedurally. In case, notices are required and in an instance where the termination is to take immediate effect payment in lieu of notice should be made by the employer or employee as the case may be.
DIFFERENT DIMENSIONS OF TERMINATION
TERMINATION AT WILL
Under common law, it is recognized that no authority or body can force an employer to employ a person, or compel an employee to work for an organization, hence, if any of the parties decides to opt out of the contract such a person is free. It is on this note that the concept of termination at will is premised which support the idea that an employer or employee can terminate an employment contract without giving any reason for so doing.
However, for termination at will to pass the test of fairness and nondiscrimination it should follow an acceptable procedure of issuance of notices or payment made in lieu of such notice both by the employer and the employee as the case may be.
A layoff is when a sizeable number of companys employees are terminated due to factors that the employer viewed as hindering its capacity to keep such number at a material time. The layoff could be as a result of a shortfall in companys product and services, or other economic related issues. A layoff can be permanent and it may also be temporary in which case the terminated staff could be recalled when the situation becomes more favorable.
REDUNDANCY INDUCED TERMINATION
This is when employees are terminated for no cause of theirs but due to loss of companys capacity to keep them in employment. Redundancy is regulated by strict regulation and procedure in which priority is given to staff that has been long in employment compared with those that recently joined (First-in last-out). Also, severance pay for redundancy is expected to be negotiated and agreed to by all parties.
Any material breach of the terms and conditions of the contract either by the employer or the employee could be a good reason for termination and this will be termed as a caused termination since reasons could be adduced for the termination. For example, where the employer can no longer pay the salary of the worker the employee can terminate the contract. Also, in a situation, where the employee commits an offense that is termed gross-misconduct such as stealing, falsification of documents, poor performance or suffers from physical incapacitation to the extent that he or she could no longer work for the organization.
This will occur due to loss of the employers business as a result of natural disaster or order of a properly constituted judicial body. Also, when the employee dies the contract would be said to have automatically terminated. However, this does not prevent the employer from paying benefits due to the next of kin or estate of the late staff.
Having given the various scenarios, it is important to start that when the appropriate procedure of notices or payment in lieu is not followed, or when, the reasons for termination violates established laws or the contract of employment such termination could be said to be wrongful.
WHAT IS RESIGNATION?
Resignation is an action that is initiated by an employee with the intention to separate from the employment of an employer and discontinue his or her contract of employment. It is largely a voluntary act that the employee considered to be in his or her best interest.
According to Philippines Labour Code, Article 299, Resignation is voluntary act of an employee who is in a position where he believes that personal reasons cannot be sacrificed in favor of the exigency of the service, and he has no other choice but to dissociate himself from employment
Like in termination, standard employment practices and the Nigerian Labour Acts also prescribe that adequate notice must be given to the employer by the employee when filing for resignation, when such is not done and there are noticeable infractions the employer could sue for damages suffered due to employees sudden exit from the employment contract without notification.
CAN AN EMPLOYER REFUSE TO ACCEPT A RESIGNATION?
It should be clear that the employee enjoys the right of resignation; it is a right that cannot be denied him based on the doctrine of mutuality of consent between the employer and employee. Having said that, it important to note that, the employer may accept or refuse to accept a resignation when it violates the terms and conditions of the employment contract. The employer is expected to write a request that such violation is corrected before the lapse of the notice period or the formal acceptance of the resignation. Even when the employee refused to adhere to such request, the employer cannot compel him or her to continue in the service at best the employer can sue for the breach of contract or out-rightly refused to pay such entitlement as may be due the employee until the right things are done.
PROCEDURE FOR RESIGNING FROM EMPLOYMENT
Since resignation is a voluntary act of separation from an employment by an employee it then implies that a valid resignation must be at the instance of the employee. It is mandatory that resignation clause is included in the offer of employment letter or contract of employment.
I will be giving some guideline here, but this must be done within the overall law of the land and individuals contract of employment.
• SUBMISSION OF LETTER OF INTENTION OR NOTIFICATION OF RESIGNATION
Usually, an employee would normally inform his or her line manager or supervisor of an intention to resign and once this is done the employee should be asked to commit such intention to writing and passed it on to the HR Department. It becomes the responsibility of HR to ensure that appropriate information such as notice period, the final date of exit and reasons for resignation should be stated.
• LETTER OF ACKNOWLEDGMENT
It is a standard practice that a letter acknowledging the receipt of the letter of intent to resign should be written by HR or designated officials. This letter is not necessarily an acceptance of resignation letter but a confirmation that the organization has gotten to the notice and is being considered.
Once resignation letter is checked for compliance, it becomes of utmost importance that appropriate notifications are sent to the departments with a checklist for anything outstanding and issues considered relevant to the duties of the “resignee”. Finance should do its checklist on loans, benefits, and other entitlement, ICT should check matters that have to do with safety and access to the companys electronics portals, the immediate supervisor and line manager should check for the outstanding job and handing over processes.
Although, it is subject to debate whether or not a notice be sent informing the entire staff through notice-board or InfoTech that an employee has tendered a notice to resign his or her appointment, however, I believe it is appropriate that such a notice be issued organizational wide or to the employee immediate department reasons for these are many and it would include issues such as the need for adequate preparation for workflow, liability to a staff member, or any other matter that a fellow employee would like to draw the attention of management to. Lastly, it will avail the employee of wishing the departing employee a farewell.
Valuable feedback about the organization and its work processes could be gotten from a “designee” using a well designed and structured questionnaire and through a face to face exit interview section. If properly done an exit interview would help close all loopholes that could result in litigation as all pending issues would have been brought to light and properly resolved.
It is said that a staff that is leaving has nothing to fear so they can tell you the truth about internal processes and at the same time make valuable suggestions on how to improve the organization processes and procedures.
RELEASE, QUITCLAIM, AND WAIVER
It is important that a quitclaim indicating that all claims, proof of final settlement against the company prior to the last day of work and after the clearance has been received by the employee and thereafter the company has been released of any other of such claim by the employee. This is an important clause that must be included either in a separate letter or the final acceptance of resignation letter.
ISSUANCE OF ACCEPTANCE OF RESIGNATION
At this point I believe that all loose ends would have been tidy-up, issues that bother on entitlements and benefit sorted out with finance and companys properties submission must have been carried out and all outstanding liabilities settled.
The acceptance of resignation should serve as the final formal severance letter between the employee and organization
EMPLOYEES DISMISSAL: METHODS AND PROCEDURES
Dismissal is a process of severing an employment relationship usually without notice and done at the instance of the employer. It is when an employer ends the employment of its employee for acts that are considered strong, valid and in the best interest of the organization.
Dismissal is quite a sensitive matter because of some emotions attached to it and the notion that in the employment relationship the worker is considered as a weaker party while the employer is considered as the stronger party.
In many instances of dismissal the employee loses some and in cases all benefits, therefore, it could result in litigation and prolong court cases, hence, the dismissal must be justifiable and meet the following conditions:
• Legal defensibility.
• Such action must be reasonable and consistent with companys policy
• It must not be discriminatory
• It must present an evidence of proper investigation
• It must be in writing with reason(s) for such action stated
REASONS WHY AN EMPLOYEE CAN BE DISMISSED
• Restriction by law. For example when an employee is convicted of a crime and jailed by the law court or where a driver has his license withdrawn by the issuing authority thereby making it impossible for him or her to continue driving.
• Summary Dismissal. There are certain acts that are considered gross misconducts and are viewed as detrimental to the continued existence of the organization. For example, theft, forgery, unauthorized disclosure of business or trade secret, disobedience or refusal to accept a reasonable order, violent acts towards other companys personnel, customer or property and so on.
• Long and Protracted Illness. Sometimes an employee could fall sick and the company has observed the necessary condition and given such support for recovery when the sickness continues such that the employee could not continue in his work then there could be a ground for dismissal due to inability to perform his or her job.
• Incapacity or inability of an employee to do his or her job properly based on an agreed performance standard.
TYPES OF EMPLOYEES DISMISSAL
• Fair Dismissal
Dismissal is said to be fair when the employer has sound and justifiable reasons and has acted within the ambit of the contract of employment before carrying out the dismissal. Largely, reasons for fair dismissal are traceable to improper conduct by an employee and outright breach of the employment conditions. A fair dismissal means that proper investigation would have been carried out and warning and other measures must have been taken without achieving the desired goals.
• Unfair Dismissal
When a dismissal is carried out in contravention of the employees right to fair hearing, the opportunity for correction and reasonable disciplinary measure such action of the employer could be termed unfair. Dismissal can be said to be unfair when an employee is sent packing for demanding for fair labor practice, flexible working hour, in belonging to a union and even when he or she commits an offense that is pardonable but instead got the boot.
• Constructive Dismissal
When an employee is forced to resign from his or her employment due to a deliberate and unfriendly act of frustration directed at him thereby making his continued employment unpalatable. For example, when his or her wages are cut without an agreement or his workload unreasonably increased or humiliated through demotion and other measures taken by the employer when such employee resigned he or she will be said to have been constructively dismissed.
• Wrongful Dismissal
This would occur where the employer has totally breached the contract of employment by not following the due procedure prior and in the process of the dismissal. This would include absent of investigation, no notice or opportunity for fair hearing and representation by the employee.
NIGERIAN LABOUR LAWS AND ITS PROVISIONS ON THE TERMINATION OF CONTRACT OF EMPLOYMENT
It is instructive to have a good understanding of the Labour Act, chapter 198, Laws of the Federation of Nigeria, 1990. This section provides the general guidelines on issues that bother on termination of employment.
The relevant sections are highlighted below:
1. (1) either party to a contract of employment may terminate the contract upon the expiration of notice given by him to the other party of his intention to do so.
(2) The notice to be given for the purposes of subsection (1) of this section shall be-
(a) one day, where the contract has continued for a period of three months or less;
(b) one week, where the contract has continued for more than three months but less than two years;
(c) two weeks, where the contract has continued for a period of two years but less than five years; and
(d) one month, where the contract has continued for five years or more.
(3) Any notice for a period of one week or more shall be in writing.
(4) The periods of notice specified in subsection (2) of this section exclude the day on which notice is given.
(5) Nothing in this section affects any right of either party to a contract to treat the contract as terminable without notice by reason of such conduct by the other party as would have enabled him so to treat it before the making of this Act.
(6) Nothing in this section shall prevent either party to a contract from waiving his right to notice on any occasion,
or from accepting a payment in lieu of notice.
(7) All wages payable in money shall be paid on or before the expiry of any period of notice.
(8) If an employer gives the notice to terminate the contract of employment of a worker who has been continuously
employed for three months or more, the employer shall not be liable under this section to make any payment in respect of a period during which the worker is absent from work with the leave of the employer granted at the request of the worker.
(9) In the calculation of .a payment in lieu of notice, only that part of the wages which a worker receives in money, exclusive of overtime and other allowances, shall be taken into account.
HOW TO HANDLE RESIGNATION, TERMINATION, AND DISMISSAL WITHOUT FALLING FOUL OF THE LAW
Many employers have suffered huge financial losses and goodwill from the general public due to improper handling of the exit processes in their organization. At the same time, some employee for failure to work within the policy of their organization and more importantly for lack of attention to their contract of employment have lost their jobs and benefits that should be due to them.
For both the employee and employer it is recommended that they both take note of the above prescriptions and ensure that things are done right.
Since resignation is the instance of the employee it is pertinent that the companys handbook if available should be studied alongside the contract of employment. The contract of employment is binding on both parties to the employment relationship hence breaching it carries repercussions that are sometimes unpalatable and could result in a lawsuit.
The basic qualification for resignation is THE NOTICE PERIOD. The notices must be given as stated in the employment contract it can be done verbally, however, best practice procedure is to commit it to writing and have an evidence that a proper notice has been given. You may not state reasons for resigning and it could be as simple as saying for personal reasons.
When an employee takes a walk without properly resigning it can firstly affect the operations of the organization and if losses are suffered the organization could sue for damages. Also, without a proper checklist and clearance if there are infractions and commission of crimes immediately after the exit it could be traced to the staff. It is important that the appropriate notices are given and clearance obtained.
A proper notice will help the organization planned for replacement or work out a job-sharing arrangement with the existing staff in such a way that production or operations would not suffer.
Based on the doctrine of mutuality of consent, both the employee and employer has right to terminate the contract of employment either during the probationary period or after probation. Like resignation, termination of the contract could be made legally defensible if it follows due process and complies with the contract that exists between the employer and the employee. It must satisfy the requirement for NOTICE PERIOD. And, depending on the country and its laws, termination could be done without or without reason. Whether it is done at will or caused termination, it must take into consideration the conditions and contract of employment.
As indicated in the preceding pages of this article, the appropriate checklist must be followed and it must ensure that all loopholes are covered and gray issues resolved before the final exit. If done well termination is a much softer ground to land since the law recognizes voluntariness of employment relationship and the doctrine of offer and acceptance.
It is important to states here that dismissal is a very tricky and sensitive approach to severing an employment relationship, hence, it is recommended that it should be used when you are sure that the reasons for it, is not just reasonable, grave and legally defensible but it must be matter that must seem to be right in the face of the law and the observing public such as labour union, right advocacy groups and your workforce in general.
Because dismissal is at the instance of the employer, having noted his power to hire and fire it is often seen as a one-sided disciplinary measure directed at the weaker party to the contract, the employee. For this reason, much scrutiny is pointed at employers and the search for error usually looked for hence it should be done diligently and judiciously.
This article was intended to provide a guide for human resource management practitioners, employers of labours and employee alike, having observed and involved in resolving issues that bother on inappropriate resignation, unfair termination and wrongful dismissals it becomes pertinent that proper attention should be paid to best practices and due observation of labour laws and contract of employment details.
I have seen businesses that got embroiled in an industry crisis and suffered huge final losses due to failure to manage employee exit properly, I have had privilege of counseling employees who were dismissed from organizations with so much bitterness against the employers five years after their exit, and I have had opportunity to have worked with a boss that was violently attacked because of perceived biases in handling employees exit.
Severing employment relationships most times will go well if it was well planned and sometimes it comes with a lot of toxic emotions that would require the expertise of a trained person to handle. I believe this article has shed some light on this sensitive matter and should provoke further discussions.
Thank you for being part of a better workplace.
Kayode Ibukunoluwa-Micah (2017) Letter of Reference and Character Attestation: The Duty of Employer over Ex-employee www.askkayodemicah.com.ng
Labour Act, Chapter 198, Laws of the Federation of Nigeria, 1990
Nonato Law Offices Cebu Business and Investment Consultants (2016) Dismissal of Employees in the Philippines
Philippines Labour Law, Article 299, Jake Del Puerto
Ranger Kidwell-Ross (2011) Employee Exit Procedures and Guidelines www.worldsweeper.com
Wikipedia, The Free Encyclopedia Employee Off boarding
ABOUT THE WRITER
Kayode is a Certified International Professional Trainer, a certified human resource management professional and faculty member of the International Purchasing and Supply Chain Management Institute, Delaware-USA, and the American Certification Institute. He is a Principal Consultant and CEO of Darach Associate and Marketing Consulting Nigeria Limited.
Kayode holds a Master degree in Managerial Psychology (MMP) and has over 19 years of work experience m he has consulted for leading organization such as Samsung Electronics West African, West African Tobacco Company, Deekay Group, Kaothon International, FMCG Nigeria Limited, Churchgate Group amongst others.
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