QUESTION

Dear All,

Is company required to give affected employees notice period during retrenchment?

Does notice in lieu need to be taken into consideration in the severance package?

Appreciate your sharing/advice. Thank you.

Choon Mui

REPLIES & COMMENTS

REPLY 1

Yes, we do take into consideration the notice period. So its either we pay off the notice or staff serve the notice period.

Anya

REPLY 2

If someone has been identified to be retrenched, it is only fair for the Company to serve a proper notice to the affected employee as per the termination notice clause in his/her employment contract.

The notice period will somewhat enable the employee to look for a job while in employment still and also to undertake a job handover to his/her colleague, if applicable.

And if the Company is unable to allow the employee to serve the full notice, then the Company should pay the balance of the notice period to him/her.

The severance package will usually comprise the retrenchment payout & other components like encashed leave, pro-rated AWS, notice pay (where applicable), bonus (for past year performance), etc. The payable items and amounts depend very much on the financial state/affordability of the Company and also whether the Company is unionised or not.

In summary, unless the Company and affected employee mutually agree on the waiver of the full notice period or a reduced period of notice, the employer should fulfil its contractual obligations to the employee.

SE