Managing employee exits: checklists, timelines, and procedures
Emotions and expectations, financial implications and legal considerations: An employee parting ways with the company can be a difficult task, but it doesn’t have to be. Whatever the reason for their exit from your organization, make it a smooth, seamless, and painless transition for everyone involved.
Dr. Flor M. Glinoga, owner of corporate training services provider Altabest Management, and Marco Ballesteros, former HR Legal and Process Compliance Leader for SGSCo, a global packaging and integrated marketing company, share with us important information and practical advice to ensure a smooth and compliant offboarding process.
Also known as a voluntary exit, this is one of the more simple departure choices for HR to handle. Both Dr. Glinoga and Ballesteros allow employees to resign from the company provided there is a 30-day notice rendered.
“The exit policy for resignation will allow employees to sever their employment with the company provided that 30 days’ notice is done in writing and the letter of resignation is submitted to the Human Resources Department (HRD) and the President. If the resignation has been accepted and approved, a Clearance process should be undertaken by the employee,” says Dr. Glinoga.
This 30-day resignation notice also ensures that the company can properly turn over the pending work of a resigning employee and gives the company ample time to find and train a replacement. “If it is a voluntary exit, as a general rule, we observe the 30-day notice for the company to source for a replacement and conduct an exit interview,” Ballesteros shares.
The clearance process
Glinoga and Ballesteros share a sample process flow of the employee resignation to guide other hirers in doing the same:
Conduct an exit interview. A valuable tool for improving organizational effectiveness, exit interviews help you understand the employee’s perceptions and experiences with the company. This is the feedback stage, and collecting data from employees who leave can assist in reducing future employee attrition if such issues are addressed from the get-go.
Make an exit checklist. It is important to have an exit checklist process in place and a set of steps to follow. Ensure that the checklist is completed when an employee resigns. The best person to complete the checklist is the employee’s supervisor, and this should be done on the day that the employee leaves the company.
The exit checklist can include, but is not limited, to the following items:
Arrange for the employee to do a formal handover to someone within their department. The resigning employee should document the procedures of their role, explaining any important or pending items.
Notify all members of your company that the employee is resigning.
Collect any company property: their company laptop, smartphone, company credit card, keys, security passes, parking pass, name badges and business identification, uniforms, tools, electronic devices, and other company property that was assigned to the resigning employee
Ask them to clean out their desk.
Process all outstanding payroll, accrued leave, and expenses. If they were given a mobile phone account, ensure this account is reconciled.
Delete their computer access, have their files in network folders copied to the network, and cancel their accounts. Remove them from the company intranet.
Disable their building or property access.
Remind them of confidentiality clauses in their letter of engagement.
Ensure you have their current email address and phone number on file, should you need to contact them after they resign.
Make sure that the resigning employee and the employee supervisor both sign off on the checklist when it has been completed.
Exemptions to the 30-day notice
Should employees wish to bypass the 30-day notice and leave earlier, Ballesteros shares the valid reasons for exemption:
This must be supported by a medical certificate and an assessment by the company physician.
Family emergency. The employee’s immediate family member has fallen ill and requires support from the resigning employee. This includes the employee’s parents, children, spouse, and siblings.
Domestic violence. The employee filed a case under the Violence Against Women and their Children (VAWC) Act. The wife or the female partner who is a victim of VAWC should have an ongoing record, with either a Barangay Protective Order or a summons from the prosecutor’s office.
Say it right
For employees who voluntarily depart, Dr. Glinoga shares a sample company announcement:
This morning, we received the resignation of Mr/Ms (name) from his/her position of (role). This is sad news for us as he/she was one of the best assets that our organization had.
We wish him/her luck and success for his/her future. We also want to say that the doors of this organization will stay open for him/her whenever he/she wishes to return.
Our team wishes him/her the very best.
While retirement may also be considered a voluntary decision to exit, it is defined as the decision to leave the workforce entirely. According to Republic Act No. 7641, employees who reach the age range of 60 to 65 years old are asked to retire already. So how do these retiring employees transition?
The process for retirement is similar to that of resignation, but aside from the outstanding pay, retiring employees also receive retirement benefits, the terms of which vary from company to company.
Should the company not have a retirement plan, RA No 7461 states that retired employees who have served at least five years are entitled to a retirement pay amounting to at least ½ month’s worth of salary for every year of service.
Say it right
Gligona shares a sample message to her retiring employees:
Congratulations on your retirement! Wishing you all the very best for the coming years as you embark on a new journey. We hope that your retirement is filled with relaxation, fun, and family time.
According to Dr. Glinoga, just causes for the termination of an employee as listed in Article 282 of the Revised Labor Code of the Philippines are:
Violation of company rules and regulations
Poor performance for two consecutive years
Commission of a crime or offense
When terminating an employee, the following must be considered:
The burden of proof of whether due process was undertaken should be provided by the company. A Notice to Explain must be served within five days to the employee who violated company rules or regulations. After an investigation, the Notice of Disciplinary Action on Termination will be served if the employee’s actions are deemed a grave offense.
For poor employee performance for two consecutive years, detailed documentation must be provided. A Notice of Improvement Form proves that the company has exhausted all possible means to help the employee improve within the two-year period. Despite all these efforts, the employee’s performance remained below company standards for two consecutive years.
If the six-month treatment of an employee’s communicable disease is not successful, the Notice of Termination can be served at least one month in advance. A government doctor should certify that the employee is not physically fit to work due to an untreated communicable disease such as tuberculosis.
If the employee has already been sentenced by the court for a criminal offense, he can also be served the Notice of Termination at least one month in advance.
According to Ballesteros, the exit interview and survey are waived for employees who are terminated by just cause.
The exit policy for separation as allowed by Article 283 of the Revised Labor Code of the Philippines are:
The installation of labor-saving devices
Retrenchment to prevent losses
The closing or cessation of operation
The employees and the Department of Labor and Employment (DOLE) should be informed of the separation at least one month before its implementation.
Calculation of separation pay is dependent on what reason was used:
Installation of labor-saving devices: at least one month of pay or one month per year of service
Redundancy: at least one month of pay or one month per year of service
Retrenchment as a way to prevent losses: at least ½ month pay for every year of service
The closing or cessation of operations: at least ½ month pay for every year of service
Retrenched employees would greatly benefit from other forms of assistance. “Aside from the statutory benefits, our company provides for an outplacement program, a financial wellness seminar, and a career development program. This way, we help employees transition seamlessly to another company,” Ballesteros shares.
Say it right
Dr. Glinoga shares a sample message for employees who have been retrenched:
“You have been a valuable employee in this organization for many years. Your service has been up to the level of our expectations. In spite of that, we are sorry to inform you that your service in this organization is no longer required since our volume of work has reduced remarkably.”
How do you handle retrenched employees?
For retrenched employees, Dr. Gligona says that they deserve a respectable exit, whatever the reason. “When we talk about the role being made redundant and not the individual, that is not what they want to hear. Do not underestimate the need to give these individuals a dignified exit. Ask the leavers what they want to do, be proactive, and provide the space and time for people to say goodbye properly.”
Ballesteros also shares that employees need to know why they were retrenched. “We made sure that they clearly understand as to why the position was retrenched. It is not the fault of the employee but the reason for terminating their employment is due to business loss backed up by the financial statement.”
Final words: Wise words to live by
For Ballesteros, giving a safe space for employees to leave with dignity is an important part of the process. “May it be voluntary or involuntary, secure a room where HR, the immediate manager, and the concerned employee can freely discuss the exit management process. You also need to alert security for the activity just in case the situation goes out of control.”
For Dr. Gligona, your exit management process should focus on ending the business relationship on a positive note. “In the end, it is always nice to part on good terms, and you never know if the person leaving your employment may become a client or refer business to you in the future,” she says. “We always say that it is best to help a departing employee leave with dignity--regardless of the reason they are leaving.”
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