“Separation” means cessation of service of agreement with the organisation for one or other reason. The employee may be separated from the pay roll of a company as a result of:
1. Resignation;
2. Discharge and dismissal;
3. Suspension and retrenchment; and 4. Lay-off
1. Resignation: Resignations may be put in voluntarily by the employees on grounds of health, physical disability, better opportunities else where, or maladjustment with company policy and officers, or for reasons of marriage (frequent in case of young girls): or they may be compulsory when an employee is asked to put in
his resignation if he wants to avoid termination of his services on the ground of gross negligence of duty on his part, or some serious charge against him.
2. Discharge: A discharge involves permanent separation of an employee from the pay-roll for violation of company rules or for inadequate performance.
A discharge becomes necessary:
(i) When the volume of business does not justify the continuing employment of the persons involved; (ii) When a person fails to work according to the requirements of the job either because of incapacity or
because he has deliberately slowed down on work, or because there is no suitable place where he can be transferred.
(iii) When an individual forfeits his right to a job because of his violation of a basic policy often involving the safety of others, the morale and discipline of a group.
Cause of Discharge: A discharge seldom arises from a single impulsive act. Many causes may account for it. Some of these are:
(a) Frequent Causes: Inefficiency, dishonesty, drunkenness, carelessness or indifference, violation of rules. (b) Infrequent Causes: Accidents, insubordinations, personal conduct, un cleanliness, infraction of rules,
destructive negligence, wastefulness, and physical unfitness.
(c) Other Causes: Carelessness, lack of co-operation, laziness, tardiness in starting work, frequent absences without leave, dishonesty, lack of specific skill, preventing promotion, promotion, adverse attitude towards the organisation.
Discharge Procedure: To avoid unnecessary grievances arising form discharges, proper rule should be framed to govern them.
To demonstrate that a discharge is justified and does not arise out of unfair discrimination or personal prejudice of the supervisor, following evidence needs be produced:
(i) Permanent records of all merit ratings made by the supervisors;
(ii) Permanent records of ratings of the defendant’s traits maintained by persons other than the foreman;
(iii) A Memorandum bearing on the efforts made by the foreman to help the defendant to overcome his weakness; (iv) A memorandum bearing on the efforts made by the foreman to help the defendant to overcome his weakness; (v) A copy of nay warning that had been sent him;
(vi) The latter of discharge, especially if the letter states the cause of the discharge.
Discharge are generally made in accordance with the Standing Orders. The action taken should be bonafide and is neither a punitive measure nor a case of victimization.
The following elements should be present in a discharge programme: (i) The reasons for discharge should be clearly stated.
(ii) The individual concerned should be adequately informed about the reasons for his discharge.
(iii) The supervisor, in charge of initiating discharge action, should be fully conversant with rules and regulations of the organisation.
(iv) The facts regarding the violations of the rules and regulations should be carefully analyzed. (v) Line officials should handle the discharge affairs.
(vi) There should be a well-thought – out procedure for setting the discharge case.
(vii) Adequate provision should exist for review of the discharged employee’s case.
(viii) A discharged employee needs a reasonable notice or an equivalent of pay in lieu of notice. It carried with it certain penalties, such as difficulty of re-employment, loss of benefits and, in certain cases, the loss of a part of the provident fund, etc.
DISMISSAL
A dismissal is the termination of the services of an employee by way of punishment for some misconduct, or for unauthorized and prolonged absence from duty.
Before his services are terminated, an employee is given an opportunity to explain his conduct and to show cause why he should not be dismissed. The general rule is that in this process, there should be no violation of what is known as the principle of natural justice, which ensures that punishment is not Out of all proportion to the offence.
3. Suspension
This a serious punishment, and is generally awarded only after a proper enquiry has been conducted. For reasons of discipline, a workman may be suspended without prejudice during the course of any enquiry. During suspension, the employee receives a subsistence allowance.
Retrenchment: It means a permanent termination of the services of an employee for economic reasons in going concern. The Industrial Disputes Act. 1947 defines retrenchment as the “termination by the employer of the services of workmen for any reason”.
It must be noted that termination of services as a punishment given by way of disciplinary action, or retirements either voluntarily or on reaching the age of superannuation, or continued ill-health, or on the closure and winding up of a business, does not constitute retrenchment. The term is applied to continuing operations where a part of the work force is found to be superfluous.
A worker can be retrenched if the following conditions are satisfied:
(a) He has been given 3 month’s notice in writing, indicating the reasons for retrenchment, and the period of notice has expired, or he has been paid wages in lieu of such notice for the period of the notice.
(b) The worker has been paid, at the time of retrenchment, compensation which is equivalent to 15 days’ average pay for every completed year of continuous service or any part thereof in excess of 6 months. (c) Notice has been served on the appropriate government authority and the permission of such authority has
been obtained. 4. Lay-off
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 foreseeable future. It involves a temporary or permanent removal from the pay-roll of persons with – surplus skills. The purpose of a lay-off is to reduce the financial burden on an organisation when human resources cannot be utilized profitably.
Thus, a lay-off means the failure, refusal or inability of an employer to provide employment to a workman whose name is borne on the muster roll of his establishment. It is resorted to as a result of some such bonafide reasons as factors which are beyond the control of the employers:
(b) Seasonal fluctuations in markets and loss of sales; (c) Accumulation of stocks or financial slump; (d) Shortage of raw material, coal and power; (e) Production delays; and
UNIT - IV
Wage and Salary Administration – Factors – Principles – Compensation plan – Individual – Group – Incentives – Bonus – Fringe benefits – Job evaluation – Wage and salary administration in relation to personal taxation.
WAGE AND SALARY ADMINISTRATION