Monday, July 2, 2007

Severance Package: Gratuity or Guilt?

No law requires employers to offer severance package to employees who are laid off. However, a lot of employers are offering severance package left and right to employees who they are going to forcefully lay off. The question now would be the intent or purpose for granting severance package.

An employee, at the same time, generally cannot rightfully ask for severance package if one is not offered to him or her by the employer. However, an employee can demand severance package in at least three instances: (1) when the employee is promised one either verbally or impliedly as when it is written in the employee handbook or manual; (2) when it is granted as part of the employment agreement; or (3) where it has been a long standing procedure to give severance package to employees of equal position or circumstance.

If you have been laid off and you have no right to a severance package but you are offered one, do not accept the severance package outright unless you are aware of the rights that you may be giving up in exchange for the package.

Usually, severance package includes small sums like a month salary’s worth. Others grant packages to include insurance benefits and other gratuities. There is no standard amount or package unless stipulated.

In case you were laid off and a severance package is dangled in front of you, ask yourself if you feel that your employer has wronged you in any way.