HUMAN RESOURCE MANAGEMENT

Course Book 1
Chapter 4

EXIT RIGHTS AND PROCEDURES

Md. Rifat Amin Ryhan
Assistant Professor, BiMS
rifat@bimsedu.com
(Mar-May, 2015)

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EXIT RIGHTS AND PROCEDURES

Introduction
The exit of employees from the organisation requires careful
management because of:
(a) The need for compliance with the legal framework on
employment protection (particularly in regard to dismissal and
redundancy)
(b) The need for sensitivity to the human issues involved (since
the employment relationship, work and competence are so
central to people's sense of their role and value in life)
(c) The need for the organisation to gather feedback from
voluntarily departing employees (resigners or early retirers) in
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EXIT RIGHTS AND PROCEDURES

1.1 Termination of the employment contract

Contracts of employment can be 'terminated' in the following ways.
(a) By performance
The employee does what (s)he was hired to do, and the employer gives the
agreed payment or
consideration: the contract is fulfilled. (It may also be said to apply in the case of
retirement, where
there is an agreed age at which employment ends.)
(b) By mutual agreement
Both parties can agree that they are entitled to terminate the contract at any
time, say in the event of
'irreconcilable differences'.
( c ) By notice
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One party can terminate theDeveloped
contract,
but must give adequate
to the other. This

EXIT RIGHTS AND PROCEDURES

1.1 Termination of the employment contract

(d) Breach of contract
If one party 'breaks' or fails to fulfil key terms of the contract, the other
party has the
option of considering the contract to have been terminated. (In addition,
(s)he may seek
legal remedies to compensate for, or minimise the effects of, the
breach.) Failure by the
employer to pay the agreed wage, say, or gross misconduct by the
employee, would
constitute breach of contract.
(e) Frustration
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EXIT RIGHTS AND PROCEDURES

1.3 Resignation
Resignation is the process by which an employee gives notice of
his or her
intention to terminate the employment contract.
Management should attempt to find the real reasons why an
employee is leaving
in an exit interview, which may provide helpful feedback on
its policies and
practices: note, however, that there is no legal requirement for
the employee to
give reasons for leaving.
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will have
to be made when5 an employee

EXIT RIGHTS AND PROCEDURES

1.3 Resignation

(b) The period of notice required for the employee to leave should be set
out in the
contract of employment, but some leeway may be negotiated on this, for
example if the
employee wishes to take up another position immediately.
(c) Details of the departure have to be notified to the wages clerk,
pension fund officer,
security officer and so on, so that the appropriate paperwork and other
procedures can be
completed by the date of leaving. The organisation may have a
departure checklist to
ensure that all procedures
are completed.
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(d) The department head should complete a leaving report form: an

EXIT RIGHTS AND PROCEDURES

2 EMPLOYMENT TRIBUNALS
Employment tribunals are independent judicial bodies which
arbitrate in
employment matters including unfair dismissal, employment
protection and
claims in relation to sexual/racial discrimination and equal pay.
2.1 The composition of tribunals
The composition of an employment tribunal is governed by the
Employment Tribunals Act (ETA) 1996. A tribunal usually has
three members.
A legally-qualified chairperson (solicitor or barrister)
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An employer representative

EXIT RIGHTS AND PROCEDURES

3.1 Dismissal
Dismissal without notice
In most cases, the statutory and/or contractual minimum notice of
dismissal must be given
to the employee. However, rare circumstances may justify 'summary'
dismissal without
notice. The law protecting employees from unfair dismissal (discussed
below) requires
that summary dismissal be limited to cases of serious breach of contract,
such as:
(a) Gross misconduct by the employee: theft, violence, serious refusal to
obey reasonable
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instruction, endangerment of other staff

EXIT RIGHTS AND PROCEDURES

3.2 Wrongful dismissal

A claim for wrongful dismissal is open to employees at common law, if they can
show they were
dismissed in breach of contract (for example, with less than the required
notice) and that they
thereby suffered loss. They may then be able to claim damages compensating for
the amount lost:
accrued wages, payment for an entitlement to notice, or the balance of wages due
under a fixed-term
contract.
3.4 Unfair dismissal
Dismissal is justified where related to:
(a) Redundancy (provided that the selection for redundancy was fair)
(b) Legal impediment eg loss of driving licence or lack of work permit
(c) Incapability (including ill health) or lack of qualifications
(d) Misconduct, provided that minimum disciplinary procedures have been
followed (Employment Act
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2002)

EXIT RIGHTS AND PROCEDURES

Dismissal is unfair where related to

(a) Redundancy, where the selection is deemed unfair
(b) Trade union membership (actual or proposed) and activities, or
refusal to join a trade union.
(c) Pregnancy, maternity, dependant care or parental leave
(h) Refusal to work on a Sunday (for shop or betting workers)
(i) Whistle blowing: disclosure of information believed to expose
malpractice, injustice or
health and safety dangers (Public Interest Disclosure Act 1998)
(j) Carrying out duties as a safety representative or pension fund trustee
(k) Discrimination (on grounds of sex, marital status, sex change, sexual
orientation, race, religious belief, disability or part-time status)
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3.5 Remedies for unfair dismissal

The Conciliation Officer or Employment Tribunal to whom a complaint of unfair
dismissal is made may order various remedies.
(a) Re-instatement giving the employee his old job back
(b) Re-engagement giving him a job comparable to his old one
(c) Compensation which may consist of:
(i) A basic award based on age and length of service. (If the employee is also
entitled to redundancy
pay, the lesser is set off against the greater amount.)
(ii) A compensatory award (taking account of the basic award) for any additional
loss (earnings,
expenses, benefits) on common law principles of damages for breach of contract
(iii) A punitive additional award if the employer does not comply with an order for
re-instatement or
re-engagement, and in cases
of sexbyand
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(iv) A special award in the case of health and safety, and trade union membership

EXIT RIGHTS AND PROCEDURES

3.6 Dismissal procedures

Procedures for dismissal should include the following.

(a) Ensuring that standards of performance and conduct are set, clearly
defined and
communicated to all employees.
(b) Warning employees where a gap is perceived between standard and
performance, or
where other legal impediments or 'substantial reasons' are foreseen to
arise.
(c) Giving a clearly defined and reasonable period for improvement or
adjustment with
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3.6 Dismissal procedures

(d) Ensuring that the company's disciplinary procedures

(including appeal procedures, rights to representation and so
on) are made clear and meticulously followed.
(e) Implementing fair and transparent procedures for
redundancy, particularly in regard to selection (as discussed
below).
(f) Evaluating all decisions and actions in the light of policy,
legislation and the requirement to 'act reasonably' at all times.
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EXIT RIGHTS AND PROCEDURES

4.1 Causes of redundancy

In simple terms, 'redundancy occurs when the employer closes down completely,
moves premises,
requires fewer people for particular jobs or requires no people for particular jobs'
(Gennard & Judge,
2003).
(a) Adverse trading conditions, especially in recessionary phases of the economy.
(b) Increased global competition across business sectors. Many organisations have
'delayered'
(eliminated excess layers of management and supervision), or 'downsized'
(reduced their labour force)
in order to reduce labour costs.
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(c) The introduction of information and communications (and manufacturing)

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4.4 Selection for compulsory redundancy

There are two basic approaches to selection for redundancy, which have proved
acceptable to
tribunals and trade unions.
(a) The least contentious and easiest method may be 'Last in, first out' (LIFO):
newcomers are
dismissed before long-serving employees. This may be deemed 'reasonable' by
tribunals, but it may
also mean that the organisation loses its youngest employees, those with the
most up-to-date skills,
or employees of particular merit.
(b) Point score systems are an alternative favourably viewed by
tribunals. These allow retention by
merit retaining good performers and dismissing less effective ones while
supporting the
objectivity of the process.
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(i) Clear criteria should be chosen, and ideally agreed in advance with trade

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4.4 Selection for compulsory redundancy

(iii) Managers implementing the system should have clear definitions of criteria;
points available for
different degrees of fulfilment of each criterion; and weighting of criteria to reflect
their relative
importance and value to the organisation.
(iv) Once all scores have been calculated, employees with the lowest scores are
selected for
redundancy.
Redundancy pay
Redundant employees are entitled to compensation, in the form of redundancy
pay:
(a) For loss of security
(b) To encourage them to accept
redundancy
without damage16to employee
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4.6 Compassionate exit management

A number of measures may be taken to alleviate the consequences of redundancy
for
employees.
(a)Informing employees who are to be dismissed of their selection
should be managed with as
much sensitivity as possible. This is generally done by what is called a 'release
interview'. The
interview is generally conducted by a line manager, but an HR specialist may
also be present, in order
to explain the basis of selection, the employee's entitlements and organisational
support services that
will be offered.
(b) Counselling may be offered to employees, to aid their readjustment
and job search.
(c) Outplacement services may be offered, often through external
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consultancies, to help redundant

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4.6 Compassionate exit management

(iv) Carrying out psychometric assessments and helping employees to
set career and job objectives
(v) Matching of employee details to advertised vacancies or network
opportunities
(vi) Helping the employee to plan a focused job-search campaign
(d) Information on job, self-employment and retraining
opportunities and funding should
be made available. Individuals should be made aware of the role and
accessibility of the
Department of Employment's
and private sector
services for
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careers counselling,

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