What is Employee Separation? Types of Employee Separation

Employee separation is a sensitive issue for any organization. Usually, an employee leaves the organization after several years of service. Employee separation constitutes the final stage in the staffing process of an organization. An employee can leave the organization for any reason which he deems fit for seeking separation. However, separation is classified basically into two types. These are voluntary separation and involuntary separation. Voluntary separation refers to the separation of employees on their own request, while involuntary separation means the separation of employees for organizational reasons which are beyond the control of the employees.

According to Yoder___ Separation is a negative recruitment. It may be In the form of resignation, dismissal or discharge, suspension, retrenchment or lay-off.

Every organization must have comprehensive separation policies and procedures to treat the departing employees equitably and ensure smooth transition for them. Further, each employee can provide a wealth of information to the organization at the time of separation. Exit interviews can be conducted by the HR department to ascertain the views of the leaving employees about different aspects of the organization, including the efficacy of its HR policies.

Types of Employee Separation

In practice, employees may be separated, or may move out of organisation for a variety of reasons like retirement, resignation, suspension, discharge, dismissal and layoff. Be whatever the types/forms of separation, separation becomes important and sometimes traumatic event for both the employee and organisation’.

1. Retirement

Retirement is the major cause of separation of employees from the organisation. It can be defined as the termination of service of an employee on reaching the age of superannuation. For example, at present the superannuation age for the teachers working in the Central Universities is 62 years and in case of some state government employees, it is 58 years.

Retirement may be of two types

(i) Compulsory Retirement: This is the retirement when employees retire compulsorily from service on attaining the age of superannuation. Some organisations like Universities may have a policy to reappoint professionals and others who possess rare skills and expertise for a limited time even after attaining superannuation.

(ii) Voluntary Retirement: When organisations give option to its employees to retire even before superannuation, it is called ‘voluntary retirement’. This scheme is termed as, ‘voluntary retirement scheme (VRS)’. Of late, in their efforts to downsize the employees, organisations by providing certain incentives, are trying to encourage their employees to opt for voluntary retirement. Employees in return of voluntary retirement are given lump-sum payment.

2. Resignation

Resignation is termination of service by an employee by serving a notice, called ‘resignation’ on the employer. Resignation may be voluntary or involuntary. A voluntary resignation is when an employee himself/herself decides to resign on the grounds of ill health, marriage, better job prospects in other organisations, etc.

Resignation is considered involuntary or compulsory when the employer directs the employee to resign on grounds of duty and indiscipline or face the disciplinary action. However, in case of involuntary resignation, a domestic inquiry should be conducted before asking the employee to resign. This is because otherwise the affected employee can go to the union or court of law and complain that he was asked to resign under duress.

3. Layoff: According to Section 2 (KKK) of the Industrial Disputes Act, 1947, lay off is defined as “the failure, refusal or inability of an employer, on account of shortage of coal, power or raw materials or accumulation of stocks or breakdown of machinery or by any other reason, to give employment to a workman whose name appears on the muster rolls of his industrial establishment and who has not been retrenched”.

It is important to note that the employee-employer relationship does not come to an end but is suspended for some time Layoff may be temporary. In seasonal Industries like mines, sugar, etc., lay off occurs routinely. Layoff also may occur for an indefinite time. When layoff becomes a permanent one, it is called ‘retrenchment’.

4. Retrenchment: Retrenchment is mainly seen in plantations, agricultural services, forestry and logging, food products, manufacture of machinery and cotton textile. The reasons pointed out behind retrenchment were mainly financial stringency and lack of demand for their products.

The Industrial Disputes Act, 1947 makes it obligatory for organisations employing 100 or more employees to give three months’ notice to the employee to be retrenched and also seek prior approval of the Government.

In other organisations, employee must be served one month’s prior notice in writing indicating the reasons for retrenchment. He/she should be paid compensation equal to 15 days’ wages for every completed year of service. As and when there is need for employing people in future, the retrenched employee must be given preference.

5. Dismissal: Dismissal is termination of service of an employee as a punitive measure. This may occur either on account of unsatisfactory performance or misconduct. Persistent failure on the part of employee to perform up to the expectations or specified standard is considered as unsatisfactory performance. Willful violation of rules and regulation by the employee is treated as misconduct. Dismissal is a drastic step seriously impairing the earnings and image of the employee.