Resignation versus being offered retirement package

[bigguy]

Having personally long-departed from the current "corporate world," I am seeking advice for an older ex-employee of mine. He has 20+ years' continuous salaried employment with a corporation that has recently merged with a former competitor corporation. Obviously, there has been and will continue to be some downsizing. He has not as yet been offered a package.

My question centres on what are his financial expectations likely to be:

a) He waits to be offered a package;

b) He just plain resigns;

c) If he resigns, to what severance package is he entitled? Or, does he forfeit any compensation by resigning. I recall B.C. Labor Standards prescribed X number of weeks multiplied by number of years of service but my past corporate management experience was limited to hourly paid employees?

Any comments would be appreciated. PM in confidence if you so prefer.

In advance, thank you.

bigguy

 

[badbadboy]

Resigning prior to negotiating a severance package would be foolish. I do not think legally a company has to pay a severance if you simply resign and walk out. Your friend will have to get legal advice on that important issue.

I went through a wrongful dismissal suit and still have 3 bankers boxes full of all the legal documents. I resigned with cause and proceeded to push for my severance through the courts.

I would not do it again if I had to and it really took a life of its own when I was trying to get my own company up and running.

My suggestion to your friend - Get a lawyer now, establish a working relationship and sit tight and wait for their offer. If you don't like their offer attempt to negotiate some better terms. Failing that, proceed with a suit. Your friend probably already realizes that corporations have a lot of lawyers sitting around waiting for this sort of thing to transpire. When corporations downsize they attempt to make everyone happy while spending the least amount of money. They will have a contingency fund to deal with the not so happy campers too

 

[bigguy]

Thank you all for your responses to date

I have previously advised him that a consultation with a lawyer is mandatory.

I suspected his resignation would effectively forfeit any compensation that might otherwise be due to him.

It is most probable that he will have the normal annual "review" in the near future. Being the initial annual review under the new regime (and assuming he is not initially offered a package in this review), what if his salary package was proposed to be reduced from the more generous level previously provided by his previous management? Could that proposed salary reduction trigger a CONSTRUCTIVE TERMINATION issue??? And I most definitely agree and understand that a lawsuit of any description is not to be taken "lightly" and can swiftly become the unanticipated monster. Thanks again.

bigguy

 

[badbadboy]

I have previously advised him that a consultation with a lawyer is mandatory.

I suspected his resignation would effectively forfeit any compensation that might otherwise be due to him.

It is most probable that he will have the normal annual "review" in the near future. Being the initial annual review under the new regime (and assuming he is not initially offered a package in this review), what if his salary package was proposed to be reduced from the more generous level previously provided by his previous management? Could that proposed salary reduction trigger a SUMMARY TERMINATION issue??? And I most definitely agree and understand that a lawsuit of any description is not to be taken "lightly" and can swiftly become the unanticipated monster. Thanks again.

bigguy

Changing the goal posts of a contract between an employee and an employer must be mutually agreed upon. Otherwise, your friend will be in a case of constructive dismissal.

That was the essence of my case. Increased work expectations, changing responsibilities, reduced wages/benefits/commissions and other nonsense admin type reports that didn't produce any revenue created a constructive dismissal case between my employer and myself.

Your friend will have to discuss this with a lawyer. There are traps and pitfalls that the employee can fall in if unaware.

 

[Aeiyah]

At a minimum, your friend should expect salary continuance for at least 12 months on top of the required severance under Employment Standards. In addition, his employer should pay for the services of a career management company, such as Right Management. Typically, these companies offer programs ranging anywhere from 1 month to 1 year. He should ask for at least a 3 months, but the longer the better. After working with the same company for 20 + years, it's going to take him a few months to figure out what he wants to do next, so having access to a longer career management program will help.

 

[bigguy]

My appreciation to all you PERBitesl

who have provided advice and input to my question. I personally feel better equipped to now be able to offer more-informed counsel.

bigguy

 

[mercyshooter]

always talk and negotiate first! if you are close to retirement, then may think of that package!

 

[Tugela]

I recall B.C. Labor Standards prescribed X number of weeks multiplied by number of years of service but my past corporate management experience was limited to hourly paid employees?

The labor standard legislation provides one week per year up to a maximum of 8 weeks, twice that for a mass layoff (more than 50 employees over a period of time, 3 months I think). That is the minimum they are required to give by law, but generally accepted practice is more than that, typically a month per year. If I remember correctly, the employer can also give notice for the legal required time, so under those circumstances they might still require you to show up for work during the notice period (but most of course would not).

And never resign, you get nothing in that case. You also need to avoid termination with cause, so don't go around trying to "prompt" them to lay you off, because they might do something else instead.

You can read the Ministry of Labor termination factsheet here.

 

[badbadboy]

At a minimum, your friend should expect salary continuance for at least 12 months on top of the required severance under Employment Standards. In addition, his employer should pay for the services of a career management company, such as Right Management. Typically, these companies offer programs ranging anywhere from 1 month to 1 year. He should ask for at least a 3 months, but the longer the better. After working with the same company for 20 + years, it's going to take him a few months to figure out what he wants to do next, so having access to a longer career management program will help.

The labor standard legislation provides one week per year up to a maximum of 8 weeks, twice that for a mass layoff (more than 50 employees over a period of time, 3 months I think). That is the minimum they are required to give by law, but generally accepted practice is more than that, typically a month per year. If I remember correctly, the employer can also give notice for the legal required time, so under those circumstances they might still require you to show up for work during the notice period (but most of course would not).

And never resign, you get nothing in that case. You also need to avoid termination with cause, so don't go around trying to "prompt" them to lay you off, because they might do something else instead.

You can read the Ministry of Labor termination factsheet here.

bigguy's friend has worked for 20+ years in a management position. Different game for sure.

I was with one company for 8 years, five of which I was their number one earner. My package set by the judge was 18 months plus expenses paid.

A 20 year employee will do very well IMHO.

 

[Tugela]

That depends on what is in his employment agreement or contract, if he has one. Usually that will spell out the severance conditions and generally companies will give more if they are doing a reorganization because they want people to shut up and go away. If a company is doing large scale layoffs, the package will be more or less the same for everyone unless their contract specifies otherwise. I doubt there would be much room for negotiation except at the very top of the company.