A carefully defined termination policy can help end the employer/employee relationship smoothly. To create a severance policy, identify the purpose and goals, and write a consistent policy that covers legal issues and doesn’t discriminate. Seek legal advice and senior management approval before distributing the policy to employees.
The employer/employee relationship can end smoothly with a carefully defined termination policy that sets standards and expectations. In creating a severance policy, you may want to do several things that can minimize your company’s exposure to a lawsuit from a disgruntled employee. The overall process for creating an severance policy includes: identifying the purpose of the policy, articulating the policy goals, and writing the policy.
The purpose of a severance policy involves identifying the interests of the company and the employee. In general, you want to ensure that legal issues are covered, although it’s impossible to define every exception. While a severance policy is typically based on the needs and preferences of the company, it shouldn’t discriminate. The policy should be consistent in order to ensure equal treatment of employees who are terminated for any reason.
Typically, a severance policy should serve three purposes. First, you want to detail where the company stands in offering severance packages and why a company policy is needed. Second, the policy should inform employees about what to expect in a severance package. The third objective should outline who the policy covers and to what extent.
Once you have identified your purpose and goals, you can start writing your severance policy in simple words. The policy is a written structure that informs employees about what they can expect to receive in a severance package. Your policy may need to include a clear statement of the purpose of the policy for the company and affected employees. Also, you can have a list of applicable forms in the policy that an employee should sign after accepting a severance package.
A personnel policy writing manual with sample policies might be a good resource to use. Be careful not to copy a sample verbatim, but rather modify the policy to address your company’s specific needs and goals. Sample policies can serve as a basis for policy development.
At this point, you may want to seek the advice of an employment law attorney. He can consult the legal implications within the policy that may affect your company or employees. Mass company dismissal, voluntary or involuntary termination are typical scenarios where a severance package is offered. An attorney can assist in drafting these descriptions for when an employee will or will not receive severance pay.
If this is a requirement for your company, obtain approval from senior management before implementing the policy. After the policy has been approved by senior management, distribute the severance policy to employees. You can update the employee handbook or make it a standalone policy. In either case, you may want to include an endorsement statement where employees acknowledge receipt of the policy.
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