By: Senyo M. Adjabeng
I will start today’s article by looking at two interesting terminations of employment within the last week of August 2011. The first is this that; on Wednesday August 24, 2011, the world woke up to an announcement that the CEO of Apple, Steve Jobs, had resigned from his position after 14 years of serving the company CEO as well as the cofounder of the Company.
As published by The Wall Street Journal online, his resignation letter read as follows: “I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day has come. I hereby resign as CEO of Apple. I would like to serve, if the Board sees fit, as Chairman of the Board, director and Apple employee. As far as my successor goes, I strongly recommend that we execute our succession plan and name Tim Cook as CEO of Apple. I believe Apple’s brightest and most innovative days are ahead of it. And I look forward to watching and contributing to its success in a new role. I have made some of the best friends of my life at Apple, and I thank you all for the many years of being able to work alongside you”.
Steve Jobs did not only remind the board, management and employees of what he had promised but also named his successor and assured all of his continued interest in Apple and his desire to remain a part of its future. In this scenario, Steve Jobs acted voluntarily and terminated his own employment (resignation) but ensured that the business continued, implemented the laid down succession plan and pledged his availability to provide support for the Company.
The second Scenario is this that; Last week, Joy FM announced that Professor Frimpong – Boateng had been “sacked” (relieved of his post) as the Director of the Cardio Centre of the Korle Bu Teaching Hospital by the Health Minister. The news shocked many since Professor Frimpong Boateng returned from abroad some two decades ago and founded the Center with the assistance of Government. Since the reaction of the Professor was also that of shock and surprise as he didn’t see it coming, it is safe to assume that he was not consulted before the decision was taken. The enormity of the dangers and confusion that the decision has caused to patients and staff and the general public’s outcry and anger is enough to judge the decision. But that is not the focus of this article. My focus is rather on whether we were prepared to severe the Prof’s relationship with the center he founded. Whether there is in place a succession plan and whether someone has been groomed by the Prof in accordance with the succession plan. Whether the business continuity is secured and whether continued and enhanced productivity is assured. I will leave that for you to answer.
But there is a lesson here to be learnt. When dealing with a national asset, whether government owned, non governmental or private, it is important to value the sustenance, continued existence and success of such asset.
For many, the cardio center which is the only one in the country is a national asset and any decision regarding such asset must undergo careful consideration before implementation.
Having said that, the two scenarios above clarify how termination of employment in an organization can be varied. The term or phrase, termination of employment, is often used in the context of a sole termination process where the employee qualifies for all entitlements and is served the appropriate notice while ‘Dismissal’ is used to describe a termination process where the employee loses all entitlements and is not served any notice. This is how most Human Resources Professionals interpret the two processes. However, the phrase termination of employment is a term that represents the various processes for ending the employment relationship. Termination of employment refers to employee exit processes that sever the employment contract and relationship between the employee and the company.
In typical termination or exit processes, termination may be effected due to employee resignation, ill health, retirement, misconduct, non performance, redundancy and legal restrictions. For exit processes that emanate from serious misconduct, and legal restrictions for example, a more abrupt and severe exit mode is adopted. Otherwise, exit modes are more structured, ethical and allow for adequate notice to the departing employee.
Employee Exit Processes
There are several modes by which contracts of employment may be terminated. Such termination processes differ and depend on the circumstances under which the termination is necessitated. Below are the modes through which an employment contract may be terminated.
Termination upon Summary Dismissal for misconduct or non-performance:
This is perhaps the most feared exit process for employees and the most loved by employers. The process normally begins with a suspected workplace offense or misconduct. Upon the suspicion of misconduct, an employee may be required to go on an investigative suspension (interdiction) while the issue is verified and disciplinary processes arranged for the investigation and determination of the matter. It is also possible for an employee to be dismissed for continuously failing to meet the set and agreed performance standards of the job.
Termination due to Employee Resignation:
When a worker resigns from the job position, it simply means that the worker voluntarily seeks to leave and no longer desires to continue in the employment relationship. Resignation however is subject to the acceptance of the employer especially where there are outstanding and pending issues or requirements to be finalized by the worker. Resignations may also be forced as in the case where Management urges the employee to go in order to ‘save face’. These are often in cases where the employee must go under very embarrassing circumstances. Normally, forced resignations are used to avoid media hypes and rumours that may be to the detriment of the employee, the company and the brand should the employee be summarily dismissed.
Termination due to Voluntary and Compulsory Retirement:
Voluntary retirement occurs when an employee abrogates his or her employment contract after attaining a specific age as determined by company and HR policy. This would normally occur after the employee has served the organization for a number of years. Some organizations specify the number of years an employee should serve before qualifying for voluntary retirement. Compulsory Retirement is a mandatory retirement process at the age of 60 Years for public officers per the 1992 Constitution of Ghana. Some private companies peg the compulsory retirement age at 55 Years. At this age, the permanent employment relationship self terminates and therefore there is no excuse for a company to keep employees in the workplace over their retirement ages without redefining the employment relationship.
Compulsory Termination (Retirement/Resignation) due to Ill Health
Where an employer finds that an employee is unable to continue in the job for which the employee was hired for medical reasons, the employer may request the employee to retire or resign on medical grounds depending on the circumstances of the case and the age of the employee. Very often, I have come across long term illness policies of organizations with tiered durations of 3 months sick leave on full salary, the next six months on half salary and so on. It may therefore be helpful if an employee is medically boarded as soon as the employer determines that the employee may not be able to work in the capacity in which s/he was engaged.
Termination upon Redundancy:
where an employer contemplates the introduction of major changes in production, programme, organization, structure or technology in a company that is likely to entail the termination of the employment of workers, the employer is required to consult the affected employees or their representatives and the Chief Labour Officer and take steps to provide relevant information including the reasons for any termination, the number and categories of workers to be affected and the period within which any termination is to be carried out.
Termination upon Death of Employee:
When an employee dies on the job, the employment relationship is over and automatically ended. The organization would normally pay the employees entitlements to next of kin. The death of an employee however is considered from two angles. First, if the employee died in the course of work or as a result of performing lawful duties in the workplace, a workman’s compensation accrues to the employee and this is paid to the next of kin. For non occupational deaths, such as from sickness and other causes which may not be related to the workplace, the company may fund costs such as coffin, drinks and donations in cash as well as transportation for other employees attending to and from the funeral.
Succession Planning for Business Continuity and Productivity
The expectation of most employers and perhaps employees is for their organization to survive from year to year as a going concern. For such reasons, it is important to ensure that employee termination processes are undertaken in ways that do not adversely affect the smooth running of the company.
The first factor for ensuring business continuity is that of succession planning. This process can be described as the identification and selective grooming, mentoring, coaching and development of ‘promising’ employees in readiness for taking over higher roles and positions they have been specifically prepared for. Succession planning is a stop-gap-measure for ensuring the continuity of job roles that are key to continuous business operations and strategy. Succession Planning is not only about backing up the topmost positions such as the Managing Director or CEO of a company. Rather, a succession plan must be designed to cater for all key positions within the organization that ensures that all business operations run smoothly and the company remains successful.
The second is the development of a productivity risk management module which focuses on the transfer of leadership skills, responsibilities and job roles from one successive leader (unit head, senior manager and executive manager) to another. Where such risks are identified and mitigated through affirmative action, business continuity is assured. In all of these issues, the major problem to look out for is employee exits from the company. Exit processes (termination of employment) must always be well managed so that the right processes are followed to handover job responsibilities from the outgoing employee to the incoming employee.
To this end, it is advised that companies begin to think about the option of outsourcing their employment termination processes so that an expert takes control of all exit processes to ensure that employee exits for whatever reason is well coordinated in line with the Labour Laws and Regulations of Ghana. In such Employee termination outsourced processes, the company ensures that business continuity is protected, the employment relationship is ended on a good note, the company brand is preserved and any fallout from the employee termination process is managed and resolved by a Labour and Human Resources Expert.