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Voluntary redundancy (VR) is a financial incentive offered by an organisation to encourage employees to voluntarily resign, [1] typically in downsizing or restructuring situations. The purpose is to avoid compulsory redundancies or layoffs.
A voluntary redundancy programme is not always driven by short term revenue goals. It can also be motivated by the strategic choice to change the age structure within the company. According to research,[ citation needed ] people who accept voluntary redundancy may at times return to the company after changes in the company's prospects, strategic vision, or economic climate and, in doing so, may bring new ideas.
LM Ericsson implemented a VR programme in the spring of 2006. It offered the programme to 17,000 employees in Sweden between the ages of 35 and 50. Those who voluntarily left were given between 12 and 16 months of severance, 50,000 kronor, and a course in entrepreneurship coupled with job placement services. The goal was to have a maximum of 1,000 employees volunteer for the programme. [ citation needed ]
Delta Air Lines, in the aftermath of its bankruptcy filing, offered a programme that included limited flight benefits for a set period after voluntary resignation. In light of rising fuel prices, it turned back to a VR programme. The particulars of that severance package are unknown. [2]
A layoff or downsizing is the temporary suspension or permanent termination of employment of an employee or, more commonly, a group of employees for business reasons, such as personnel management or downsizing an organization. Originally, layoff referred exclusively to a temporary interruption in work, or employment but this has evolved to a permanent elimination of a position in both British and US English, requiring the addition of "temporary" to specify the original meaning of the word. A layoff is not to be confused with wrongful termination. Laid off workers or displaced workers are workers who have lost or left their jobs because their employer has closed or moved, there was insufficient work for them to do, or their position or shift was abolished. Downsizing in a company is defined to involve the reduction of employees in a workforce. Downsizing in companies became a popular practice in the 1980s and early 1990s as it was seen as a way to deliver better shareholder value as it helps to reduce the costs of employers. Research on downsizing in the US, UK, and Japan suggests that downsizing is being regarded by management as one of the preferred routes to help declining organizations, cutting unnecessary costs, and improve organizational performance. Usually a layoff occurs as a cost-cutting measure. A study of 391 downsizing announcements of the S&P 100 firms for the period 1990-2006 found, that layoff announcements resulted in substantial increase in the companies’ stock prices, and that the gain was larger, when the company had prior layoffs. The authors suggested, that the stock price manipulation alone creates a sufficient motivation for publicly-traded corporations to adopt the practice of regular layoffs.
Termination of employment or separation of employment is an employee's departure from a job and the end of an employee's duration with an employer. Termination may be voluntary on the employee's part, or it may be at the hands of the employer, often in the form of dismissal (firing) or a layoff. Dismissal or firing is usually thought to be the employee's fault, whereas a layoff is generally done for business reasons outside the employee's performance.
A golden handshake is a clause in an executive employment contract that provides the executive with a significant severance package in the case that the executive loses their job through firing, restructuring, or even scheduled retirement. This can be in the form of cash, equity, and other benefits, and is often accompanied by an accelerated vesting of stock options. According to Investopedia, a golden handshake is similar to, but more generous than a golden parachute because it not only provides monetary compensation and/or stock options at the termination of employment, but also includes the same severance packages executives would get at retirement.
A golden parachute is an agreement between a company and an employee specifying that the employee will receive certain significant benefits if employment is terminated. These may include severance pay, cash bonuses, stock options, or other benefits. Most definitions specify the employment termination is as a result of a merger or takeover, also known as "change-in-control benefits", but more recently the term has been used to describe perceived excessive CEO severance packages unrelated to change in ownership.
Dismissal is the termination of employment by an employer against the will of the employee. Though such a decision can be made by an employer for a variety of reasons, ranging from an economic downturn to performance-related problems on the part of the employee, being fired has a strong stigma in some cultures.
Job security is the probability that an individual will keep their job; a job with a high level of security is such that a person with the job would have a small chance of losing it. Many factors threaten job security: globalization, outsourcing, downsizing, recession, and new technology, to name a few.
Restructuring is the corporate management term for the act of reorganizing the legal, ownership, operational, or other structures of a company for the purpose of making it more profitable, or better organized for its present needs. Other reasons for restructuring include a change of ownership or ownership structure, demerger, or a response to a crisis or major change in the business such as bankruptcy, repositioning, or buyout. Restructuring may also be described as corporate restructuring, debt restructuring and financial restructuring.
The Mandatory Provident Fund, often abbreviated as MPF (強積金), is a compulsory saving scheme for the retirement of residents in Hong Kong. Most employees and their employers are required to contribute monthly to mandatory provident fund schemes provided by approved private organisations, according to their salaries and the period of employment.
A severance package is pay and benefits that employees may be entitled to receive when they leave employment at a company unwillfully. In addition to their remaining regular pay, it may include some of the following:
The Worker Adjustment and Retraining Notification Act of 1988 is a U.S. labor law that protects employees, their families, and communities by requiring most employers with 100 or more employees to provide 60 calendar-day advance notification of planned closings and mass layoffs of employees. In 2001, there were about 2,000 mass layoffs and plant closures that were subject to WARN advance notice requirements and that affected about 660,000 employees.
UTV Live is a British television news service broadcast and produced by UTV.
Qimonda AG was a German memory company split out of Infineon Technologies on 1 May 2006 to form at the time the second largest DRAM company worldwide, according to the industry research firm Gartner Dataquest. It was a patent licensing firm until Micron and others purchased its patents. Headquartered in Munich, Qimonda was a 300 mm manufacturer and was one of the top suppliers of DRAM products for the PC and server markets. Infineon still controls a 77.5% stake, which it has written down (2008). Infineon was on record as having the aim of divesting itself of this stake, with the purpose of becoming a minority stakeholder in 2009. The company has issued 42 million ADR shares, each ADR share representing one ordinary share in Qimonda.
Reed is an employment agency based in the United Kingdom. The company was founded in 1960 by Sir Alec Reed CBE. Reed's son, James Reed CBE, is the current chairman and Chief Executive.
In accounting and contractual law, "golden hello" is a term used for several different arrangements:
Golden boot compensation, also known as the Golden Boot, is an inducement, using maximum incentives and financial benefits, for an older worker to take "voluntary" early retirement.
In the United Kingdom, a compromise agreement is a specific type of contract, regulated by statute, between an employer and its employee under which the employee receives consideration, often a negotiated financial sum, in exchange for agreeing that he or she will have no further claim against the employer as a result of any breach of a statutory obligation by the employer.
The European Globalisation Adjustment Fund for Displaced Workers (EGF) was set up by the European Union in late 2006 to support to workers who have been made redundant as a result of trade liberalisation, so that they can either remain in employment or find a new job quickly. It provides counselling; job search and mobility allowances; new ICT skills and other forms of training; entrepreneurial support, including micro-credits.
Bossnapping is a form of lock-in where employees detain management in the workplace, often in protest against lay-offs and redundancies, and has especially been carried out in France. The term gained wide usage in the media following a series of bossnapping incidents in the spring of 2009 in France where workers used the tactic in the context of widespread labor unrest resulting from the late 2000s recession.
The Superannuation Act 2010 is an Act of the Parliament of the United Kingdom. It caps the redundancy payouts to civil servants at 15 months' salary. Initially the proposal was for a maximum of 12 months' salary. This was raised during the passage of the Bill to 15 months in the case of voluntary redundancy.