Voluntary Separations



An Employee Leaves an Organization of His or Her Own


Voluntary separations of this type can be minimized through equitable compensation, benefits programs, and the creation of strong links between the employee and the organization. While some quits can be avoided, the circumstances surrounding many employee quits are completely beyond the control of the organization (e.g., the relocation of a spouse or a change in family dynamics or size).

1. Voluntary retirement
When a company realizes that it needs to downsize its scale of operations, its first task is to examine alternatives to layoffs. One of the most popular of these methods is early or Voluntary retirement.

In case of voluntary retirement the normal retirement benefits are calculated and paid to all such employees who put in a minimum qualifying service Sometimes the employer may encourage the employees to retire voluntarily with a view to reduce surplus staff and cut down labor costs.
Attractive compensation benefits are generally in built in all such plans (referred to as golden handshake scheme).To reduce post retirement anxieties companies these days organize counseling sessions, and offer investment related services (e.g. Citibank , Bank of America) Some companies extend medical and insurance benefits to the retirees also e.g. Indian Oil corporation.

Voluntary retirement in case of government servant

Supreme Court of India
Dinesh Chandra Sangma vs State Of Assam & Ors on 5 October, 1977

The court held that "there is no question of acceptance of the request for voluntary retirement by the government, when the government servant exercises his right under Fundamental Rule 56(c)." under the said rule, a government servant enjoys an option in the absolute terms to warrant a retired with three months previous notice after he reaches 50 years of age or has completed 25 years of service, and the consent of the government is not necessary to give legal effect to the voluntary retirement of the government servant.

The Fundamental Rule 56(c) give a right to say no to the government employee's request to the voluntary retirement if any departmental proceedings were pending or contemplated against him. (B.J Shelat v. State of Gujarat, AIR 1978 SC 1109.)



Tata Motors offers VRS to cut costs on weak demand.

(Feb- 2015) Tata Motors, the country's largest auto maker by revenue, cut staff by offering a voluntary retirement scheme (VRS) to reduce costs as weak demand and shrinking market share pressure it to streamline its Indian operations. The Tata Group flagship, one of the oldest automobile companies in India, employs about 27,000 people in the country as on 2015.

Describing the VRS, being offered to all categories of employees, as a 'people initiative', Tata Motors said that through this the company's India operations would "enhance its competitiveness" in a fiercely competitive market.Unlike the usual VRS that entails a one-time payment, the seven-decade old company is offering an attractive package which includes a monthly salary comprising basic and dearness allowance that begins on the date of separation till the employee turns 60. While for employees, this ensures an assured monthly income, for the company it will help avoid taking a one-time financial knock on its books.

The scheme also offers a medical insurance cover for a period of 10 years post separation and normal retirement benefits such as provident fund, gratuity, superannuation, encashment of un-availed leaves and leave travel assistance due but not claimed.
The people initiative will complement the strong product portfolio it has announced till 2020, including the launch of two new products every year for its passenger vehicle business, and several new products and variants for its commercial vehicles business, Tata Motors said in a statement.

5,000 employees opt for Voluntary Retirement Scheme at Nokia Chennai factory


INDIA (CHENNAI): Nearly 5,000 of the 6,600 permanent employees of handset manufacturer Nokia plant at Sriperumbudur near here have opted for the Voluntary Retirement Scheme (VRS) announced by the company last month. Nokia India Employees Union sources told that the employees who had opted for the scheme, which entitles a benefit of around Rs 2 lakh, did so out of fear of job loss. "About 5,000 people have left the company. Actually, they were not interested to leave. But out of fear of losing the job later without even the VRS compensation, they opted for the VRS," they claimed.

The Finnish company last month sold its mobile unit to software major Microsoft but the plant near Chennai ran into rough weather over tax disputes between Centre and state governments. The company, which aimed to support the employees over the uncertainity of their future, announced the VRS scheme at the Chennai factory last month.

In its statement , Nokia said it has introduced "several" new initiatives under the Bridge programme to provide support to the employees which include -- working with industry experts to identify new employment areas, conducting awareness programmes in 40 locations in Tamil Nadu including Chennai. "The awareness sessions is to share information and insight into over 30 different skill development modules and employment outlook trainings across industries like garment, automotive, retail, hospitality," it said. The Bridge programme is also aimed at inviting employers to "facilitate engagement and placements", it said. Through the Bridge programme, Nokia said, globally about 18,000 employees have benefitted.
By PTI | 15 May, 2014, 12.10AM IST



MTNL offers VRS to about 20,000 employees

MAY 2012, INDIA, MUMBAI: State-owned MTNL, which provides telecom services in Delhi and Mumbai regions,  offered voluntary retirement scheme (VRS) to about 20,000 employees, as part of its efforts to turn profitable. MTNL had suffered a loss of Rs 929.7 crore for the quarter ended December, 2011.

ONGC sweetens VRS package; offers employees medical benefits without extra cost

To trim its excess workforce and reduce the number of non-performing employees, state-run Oil & Natural Gas Corp (ONGC) has come up with a sweetened separation package. ONGC's new voluntary retirement scheme (VRS) offers lucrative medical benefits without any cost to employees. It will be available until the first week of July. Its previous VRS scheme did not provide free medical support after retirement. In the past six years, barely 476 people opted for VRS.

ONGC's more than 33,200 employees produce 26.92 million tonnes of oil a year. In comparison, 1,450 employees at Cairn India produce 10 million tonnes a year. At Cairn India's level of productivity, ONGC would be able to do its job with less than 4,000 people, although the state-run firm says it is not a fair comparison because ONGC is an integrated energy company.


In India Any Government servant can apply for voluntary retirement, three months in advance, only after the completion of twenty years of his qualifying service, provided there is no vigilance or Departmental Enquiry pending /initiated against him/her.

Retirement is the point where a person stops employment completely.A person may also semi-retire by reducing work hours.

Many people choose to retire when they are eligible for private or public pension benefits, although some are forced to retire when physical conditions don't allow the person to work any more (by illness or accident) or as a result of legislation concerning their position. In most countries, the idea of retirement is of recent origin, being introduced during the 19th and 20th centuries. Previously, low life expectancyand the absence of pension arrangements meant that most workers continued to work until death. Germany was the first country to introduce retirement in the 1880s.

Nowadays most developed countries have systems to provide pensions on retirement in old age, which may be sponsored by employers and/or the state. In many poorer countries, support for the old is still mainly provided through the family. Today, retirement with a pension is considered a right of the worker in many societies, and hard ideological, social, cultural and political battles have been fought over whether this is a right. In many western countries this right is mentioned in national constitutions.

Retirement in specific countries


Country Early retirement age Normal retirement age Employed, 55–59 Employed, 60–64 Employed, 65–69 Employed, 70+
Austria 60 (57) 65 (60) 39% 7% 1% 0%
Belgium 60 65 45% 12% 1% 0%
Cambodia 50 55 ? ? ? ?
Denmark none 65 77% 35% 9% 1%
France 62* 65* 51% 12% 1% 0%
Germany 65 67 64% 23% 3% 0%
Greece 57 65 51% 31% 8% 1%
Italy 57 65 (60) 34% 12% 1% 0%
Netherlands 60 65 53% 22% 3% 0%
Norway 62 67 ? ? ? ?
Spain 60** 65** 46% 22% 0% 0%
Sweden 61 65 78% 58% 5% 1%
Switzerland 63 (61), [58] 65 (64) 77% 46% 7% 2%
Thailand 50 60 ? ? ? ?
United Kingdom none 65 69% 40% 10% 2%
United States 62 67 66% 43% 20% 5%



Over 600 Air India employees left company since 2009
NEW DELHI, 2012: Worried over their uncertain future and poor financial condition of Air India, over 600 employees of the national carrier have either resigned or taken voluntary retirement since 2009. Twenty-four pilots and management pilots and 163 cabin crew and executive cabin crew have either resigned or taken VR since 2009, citing various reasons, a senior Air India officia
l said.

Six engineers, including executive engineers, 171 executives and general category officers, 59 technicians and 201 general category employees have left the company, he said, adding that a total of 624 employees have either resigned or taken VR. Currently, the employee strength of Air India is around 26,481, of which 1,439 are pilots and executive pilots, 1,419 are engineers and executive engineers, 5,064 executives and general category officers, 3,064 cabin crew and executive cabin crew, 3,351 technicians or service engineers and 12,146 general category employees. 223 employees resigned or took VR in 2011, 178 in 2010 and 128 in 2009. This year till May, 95 employees have left the company. Of these, 48 employees resigned, while 47 took VR, the official said.                                         source: TOI


2.Due to pregnancy and motherhood
Countries like in India, where woman after her marriage gives most importance to their husband and children. Women getting pregnant after marriage is most happiest moment and gives them great respect especially according to Indian traditions and beliefs. Indian woman gives at most importance to motherhood and  pregnancy  time till delivery by sacrificing her personal life including her career and job .  According to the article published in Times of India, vast number of working women in India and dropped out of work, in most cases because of pregnancy and motherhood. In SAP company in the year 2007, 61 employees went on maternity leave and only 19 stayed back. In the year 2012, 134 women employees went on maternity leave and 128 return to work.

Due to this many Indian companies are coming up with different unique perks especially meant to pregnant women for retaining talent. 
  • Google India offers a baby bonding benefit of Rs. 13,650/- (around  $ 250) to young mothers soon after their child is delivered.
  • Few companies are offering cab facility to pick and drop pregnant women from home to office.
  • Few companies are providing assistants in the office to pregnant women.

3.Quits

QuitsAn employee decides to quit when his or her level of dissatisfaction with the present job is high or a more attractive alternative job is awaiting the individual. The reasons for dissatisfaction may be because, of the job itself or because of job extrinsic factors such as supervision, company policy, compensation advancement opportunities, health, spouse relocation and the like.

Thanks to economic boom, jobs are available in plenty. Competent people will get multiple offers in given time. Some of them stay with the organization in the name of loyalty or some other commitment Majority accept the more attractive offers and prefer to leave the company.

Depending on the employee's reason, comfort with the employer, and dedication to the job, voluntary termination may be sudden and unexpected without warning to the employer, or with a certain amount of notice given. Generally, employers prefer that a departing employee provide at least some notice to the employer, often at least two weeks, this often called a two-weeks notice. Those in compliance with this requirement are more likely to be rehired by the same employer in the future, to receive their full benefits from the employer, and to get a better reference for future employers.

Quits are seen more in information technology industry mainly by women employees. As per the research on quits of woman employees,  the reasons identified were marriages, pregnancy, child care after birth and family care responsibilities.


Facts [+]

A non-compete agreement is a document signed by an employee agreeing that, should the employee choose to leave the company, he or she will not work for a competitor for a specified period of time. Non-competes are used when employees have access to critical information. The legality of non-competes depend on state laws, the scope of the restrictions, and precedents set in court decisions.

Most executives cited the lack of challenges or opportunity for career growth, rather than inadequate compensation, as the main reason they left their last job, according to a recent survey by executive search firm Korn/Ferry International. Twenty percent cited ineffective leadership, while 17 percent said the attractive job market was why they left their last jobs.

An employee giving his or her two-week notice of resignation usually comes with little surprise. According to an article by Entrepreneur magazine, early warning signs include more personal phone calls, closed office doors and increased sick days. Other signs: the often vocal employee suddenly becomes passive, a normally quiet employee gets loud, and an employee who suddenly seems happy.


USA : Severance package is pay and benefits an employee receives when they leave employment at a company. Severance packages are most typically offered for employees who are laid off or retire. Severance pay was instituted to help protect the newly unemployed. Sometimes, they may be offered for people who resign, regardless of the circumstances; or are fired. Policies for severance packages are often found in a company's employee handbook, and in many countries are subject to strict government regulation. Typically, severance pay amounts to a week or two of pay for every year that the employee was with the company. Executives may receive a month's pay for each year of service and senior executives generally receive severance pay as outlined in the employment contract. In addition to pay, severance packages can include extended benefits, such as health insurance and outplacement assistance to help the employee secure a new position.

Severance contracts often stipulate that the employee will not sue the employer for wrongful dismissal or attempt to collect on unemployment benefits, and that if the employee does so, then they must return the severance money.

Potential new-hires are increasingly negotiating severance packages and outplacement assistance as a condition for accepting job offers, according to a U.S.A Today article. Executives are likely to negotiate these employment terms but the practice is spreading down through the ranks. Career experts agree that this form of negotiation was once considered bad form but is now generally accepted.

The basic idea behind this concept is to help the employee at the time of need. When the employee is laid off, his monthly income ceases all of a sudden. The situation becomes still worst if the employee has a family dependent on him! Many people have faced this awful situation during the time of recession.
However, if the person is on the severance package, he may avail the benefits that will help him to cope up with the ill situation.

Severance agreements are more than just a "thank you" payment from an employer. They could prevent an employee from working for a competitor and waive any right to possibly pursue a legal claim against the former employer. Also, an employee may be giving up the right to seek unemployment compensation. It is important to review a severance agreement carefully and contact an employment attorney to assist with the review.