Separation means cessation of service of agreement with the organization.
Separation can be the result of:
(a) Resignation (b) Discharge (c) Dismissal(d) Retrenchment
(e) Lay-off (f) Golden handshake (g) Retirement
A resignation is a voluntary separation. When a termination is initiated by the employee himself, it is termed a resignation. Resignations may be put in voluntarily by the employees on grounds of marriage especially in case of young girls, health, physical disability, better opportunities elsewhere, or maladjustment with company policy and affairs. The personnel department should investigate the real reasons behind such resignations. A study of exit interviews over a period of time may disclose a fiscal pattern suggesting improvements in the personnel management functions.
Resignation may also be compulsory when an employee is asked to put in his papers if he wants to avoid termination of services on the ground of gross negligence of duty or some serious charge against him.
A discharge involves permanent separation of an employee from the organization because of poor performance, violation of rules or poor code of conduct. A discharge becomes necessary when
(i) The business volume is reduced thereby reducing the employment opportunities in the organization,
(ii) The employee fails to work according to the requirements of the job, or
(iii) The employee forfeits his right to a job.
Discharges are generally made in accordance with the standing orders. The action taken should be bonafide and nor a punitive measure or a case of victimisation.
When the termination is initiated by the organization, it is termed as dismissal. A dismissal is the termination of the services of an employee by way of punishment for some misconduct, or for prolonged absence from duty. A dismissal is a drastic step. Therefore, it must be supported with a just and sufficient cause. It is generally done as a last resort after all attempts at reconciliation have failed. Before an employee‘sservices are terminated, he should be given an opportunity to explain his conduct and show cause why he should not be dismissed. The principle of natural justice should be followed to ensure that the punishment is in proportion to the offence. As a safeguard, responsibility for dismissal should not rest on the immediate supervisor. The approval of the next higher authority should generally be taken and the personnel manager should be consulted. Dismissals can be on the ground of unsatisfactory performance, misconduct, or want of qualifications for the job, or excessive absenteeism.
Retrenchment is termination of service due to redundancy. It is a permanent termination of the services of an employee for economic reasons in a going concern. It must be noted that termination of services as a punishment given by way of disciplinary action or superannuation or continued ill health does not constitute retrenchment. The term retrenchment is applied to continuing operations where a part of the workforce is found to be superfluous. Retrenchment has many unstabilising effects. It influences the attitudes and contributions of other employees who become disturbed by rumours, gossips, resentment and a sense of insecurity about their own fate. The principle in the procedure of retrenchment is that the last person employed in each category must be the first person to be retrenched. For this purpose, the employer prepares a list of all the workers in the category where retrenchment is contemplated, arranged according to the seniority of service of the employees in that category. When vacancies arise after retrenchment, the organization gives an opportunity to the retrenched workers to offer themselves for re-employment; and they are given preference.
According to Section 2 (KKK) of the Industrial Disputes Act, a layoff is ―the failure, refusal or inability of an employer, on account of shortage of coal power or raw materials, or the accumulations of stocks or breakdown of machinery for any reason, to give employment to a workman whose name is borne on the muster roll of his individual establishment and who has not been retrenched‖.According to this definition, a lay off refers to an indefinite separation of the employee from the pay roll due to factors beyond the control of the employer. The employee is expected to be called back in the forseeable future. The laid-off employee is not a discharged employee and is still carried on the roll as an employee. Lay- off is resorted to by the employer for factors beyond his control. Such factors could be:
Fluctuations in the market resulting in loss of sales. Shortage of raw materials or power.
Accumulation of stock. Breakdown of machinery. Production delays.
f) Golden Handshake
It is a method of retrenchment wherein the employees with a certain minimum service can opt for voluntary retirement and get a fat lumpsum in return. Golden handshake is usually offered by the Government to reduce the size of the bureaucracy and close down chronically loss-making public sector enterprises. Many thinkers on the subject are of the opinion that golden handshake is the fallout of the new economic policy followed by the Government of India. In the 1992–93 Union Budget, the Government had provided Rs. 450 crores for the Voluntary Retirement Scheme (VRS) for its employees.
In India, the retirement age is 58 or 60 years. Some employers may extend the age upward or downward from this base. For those employees who retire, it is a significant milestone. Regardless of the age at which retirement occurs, workers may need preparation through counselling. They should be informed about pension choices and insurance benefits after retirement. Employees at retiring age often feel they could continue to work effectively and there is a strong resistance from many to give up employment. For an organization, in times of staff shortage, retired employees are of great help.