As the year draws to a close, the dreaded wave of layoffs loom in many organisations. While receiving a termination letter feels like a gut punch, there’s often a glimmer of hope tucked inside – the layoff package.
Whether it’s the launchpad to 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 typically include?
Fredrick Komen, a HR and Administration Consultant at Mace Foods says the layoff package an employee receives is based on the type of contract they have.
“Those with permanent and pensionable and those with a fixed-term contract will enjoy the perks but those casually contracted will bear the brunt.”
After getting your job termination notice, Mr Komen says you are entitled to severance pay, set at the number of years you have worked.
“The minimum that I have seen as per law is 15 days salary for every year worked. But, depending on the company, it can go higher,” he says.
If gratuity applies, payment made to an employee by an employer in recognition of long and meritorious service or a special act or deed by the employee, Mr Komen says it will be 15 days pay per every year worked. However, gratuity is not legally manadated.
In addition, the employer needs to pay all leave days earned but not utilised.
“The easiest formula I’ve found to calculate salary per day is you take your monthly salary, multiply by 12, and divide by 365. So you get the daily rate,” he adds.
While redundancy is not the employee’s fault, Mr Komen explains that some companies choose to pay a lump sum if they are still financially capable. Conversely, if the company is shutting down due to financial incapacity, they often negotiate with the affected employees on a payment schedule.
“If the employee had a running pension scheme, they would receive their contribution, but the employer’s contribution would be locked down until early retirement age (50 years).”
What is the place of insurance and benefits?
For medical or car insurance, Mr Komen says it is good practice for companies to allow employees to keep using them until the end of the period.
“But you will find in some companies, some managers are malicious and terminate the insurance, though it is of no benefit to the organisation.”
However, one benefit that an employee may not enjoy is the workman’s insurance, because it covers specifically employees. Overtime has to be paid.
Unused sick leaves? “You know sick leave is a very tricky thing because it is taken when you’re sick. So you can’t have unclaimed sick off.”
If you were given staff housing, your employer should give you at least two months to move out. For laptops and phones, Mr Komen says the company often gives two options: either sell at a throwaway price or have the employee return the gadget.
Can you negotiate your layoff package during an interview?
“Yes. You stand a higher chance of negotiating before being onboarded if you are a strong candidate who knows their worth and understands that your skills are valuable to the organisation,” says Belinda Neema, an administration and finance expert at Nemsi Holdings .
However, she throws a curveball, saying the interviewer might wonder why discussions about a layoff package are coming up even before you are onboarded.
Nonetheless, she notes that due to job insecurity, it is important to ensure you are protected in case the company shuts down or you are declared redundant.
“By the time you’re going for an interview, you’ve done your research on the organisation and what it does, how employees are taken care of, and the packages they offer. So, while negotiating, factor all that and even use your proposal as a baseline for them to introduce that to the organisation if they didn’t have it previously,” she says.
Any non-monetary benefits?
While companies don’t need to offer outplacement services such as career counselling or job search assistance, Ms Neema says employees are at the mercy of their employer if they hope to reap such benefits.
“Because redundancy really hits at unexpected times, it is advisable to have a counselling session so that the employees are let go feeling better.”
