<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Nov 2, 2008
YOUR PERSONAL ADVISER: FINANCE
</TR><!-- headline one : start --><TR>Getting a fair exit package
</TR><!-- headline one : end --><!-- show image if available --></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->Q After working for my former company for more than six years, I was asked to leave within 48 hours. There had been no negative feedback on my performance as I had been hitting targets each year. This incident happened in late 2006. To date, the reasons for terminating my employment are still unknown.
Correct me if I am wrong, but my understanding of the general guideline for compensation is to award a month's pay with every year of employment if one has been with the same employer for three consecutive years. However, the exit package that I received was two months' pay and my sales bonus. I was also made to sign a letter of indemnity when I left the company.
Is there any legal ground for recourse for a six-month compensation, even though I had signed a letter of indemnity? I am now with another employer in the same industry.
A The relationship between employer and employ- ee is essentially a contractual one. Retrenchment benefits are subject to the express or implied terms of the contract. In other words, when the contract was entered into, the issue of these benefits should have been addressed and set out in the contract.
The Employment Act, which applies to employees earning less than $1,600 and those who qualify as employees under the Act such as manual workers, is silent about the amount of retrenchment benefit that should be paid or the conditions upon which it is to be paid.
Under the Employment Act, the employer is not required to give any reasons for the retrenchment or to pay time off to the employee to look for another job or even to give a minimum period of notice.
The courts have used the employer's current or prevailing policy and practice to order retrenchment benefits to be paid. Thus there must be evidence adduced to show that the employer had a consistent practice for many years right up to the time of retrenchment of paying such benefits. This might then be treated as an implied term of the contract even if there was no express stipulation.
In your case, it appears that you have accepted the two months' pay as adequate compensation. Finally, any action for breach of agreement must be brought within six years of the breach, that is, from 2006.
Amolat Singh
Lawyer
Amolat & Partners
Advice provided in this column is not meant as a substitute for comprehensive professional advice. E-mail questions to [email protected]
YOUR PERSONAL ADVISER: FINANCE
</TR><!-- headline one : start --><TR>Getting a fair exit package
</TR><!-- headline one : end --><!-- show image if available --></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->Q After working for my former company for more than six years, I was asked to leave within 48 hours. There had been no negative feedback on my performance as I had been hitting targets each year. This incident happened in late 2006. To date, the reasons for terminating my employment are still unknown.
Correct me if I am wrong, but my understanding of the general guideline for compensation is to award a month's pay with every year of employment if one has been with the same employer for three consecutive years. However, the exit package that I received was two months' pay and my sales bonus. I was also made to sign a letter of indemnity when I left the company.
Is there any legal ground for recourse for a six-month compensation, even though I had signed a letter of indemnity? I am now with another employer in the same industry.
A The relationship between employer and employ- ee is essentially a contractual one. Retrenchment benefits are subject to the express or implied terms of the contract. In other words, when the contract was entered into, the issue of these benefits should have been addressed and set out in the contract.
The Employment Act, which applies to employees earning less than $1,600 and those who qualify as employees under the Act such as manual workers, is silent about the amount of retrenchment benefit that should be paid or the conditions upon which it is to be paid.
Under the Employment Act, the employer is not required to give any reasons for the retrenchment or to pay time off to the employee to look for another job or even to give a minimum period of notice.
The courts have used the employer's current or prevailing policy and practice to order retrenchment benefits to be paid. Thus there must be evidence adduced to show that the employer had a consistent practice for many years right up to the time of retrenchment of paying such benefits. This might then be treated as an implied term of the contract even if there was no express stipulation.
In your case, it appears that you have accepted the two months' pay as adequate compensation. Finally, any action for breach of agreement must be brought within six years of the breach, that is, from 2006.
Amolat Singh
Lawyer
Amolat & Partners
Advice provided in this column is not meant as a substitute for comprehensive professional advice. E-mail questions to [email protected]
