You’re hearing a buzz in the office grapevine. The company is not in a good financial position and there might be a massive layoff in the coming weeks.
Nobody knows anything and your manager seems to be avoiding any question on the company’s stability, preferring to respond without eye contact, “We’ll be fine. The company’s in a tight spot but we’ll get through this.”
You think, “Oh well, I was going to resign anyway. I have a better offer someplace else.” Perhaps you should jump ship as early as now. Or should you?
When it comes to threats to their jobs, employees are definitely quick to pick up on signs that the company might be on the brink of a mass layoff.
It cannot be denied that the economy has taken a bad turn in the past year. Companies in business process outsourcing (BPO) are feeling the brunt of the challenges of the global economy.
Downsizing and even outright closures are being experienced across the market. Many of my colleagues were forced out of their jobs recently or are on floating status for various reasons including closure of accounts, loss of income, redundancy etc.
So it has become a question among my peers on whether they should resign ahead of an incoming downsizing or wait for the retrenchment. In this column, let’s talk about your options if you should face that problem.
Resignation, by definition, is an employee’s right to terminate a contract with an employer by his/her chosen will. The company is not responsible for paying anything to the outgoing employee besides his/her remaining compensation.
Employees who have worked in a company for a long time but are not yet eligible for early retirement may receive gratuity upon their resignation. But this is the company’s prerogative.
For resignation, companies have turnover policies such as 30-day notice, return of all company assets, and others for clearance. Getting this clearance assures you are issued a Certificate of Employment (COE) proving on record that you were employed in that company for a period of time.
This COE can be used in your next employment for easier transfer of certain government benefits that employers have to pay such as SSS, Pag-Ibig and Philhealth.
A retrenchment, on the other hand, is a company deliberately ending their contract with the employee for a number of reasons. More often than not, it’s due to financial constraints. The company has to downsize to save on operating costs, or the company is closing down.
Under Philippine law, companies have to inform the Department of Labor and Employment (Dole) a month before the expected retrenchment. They must be able to provide valid and fair ground for the retrenchment.
Retrenchees are entitled to a separation pay equivalent to at least one month or half-month pay for every year of service, whichever is higher.
The rumors are getting stronger. Human Resources and Finance have been eerily busy the past weeks. It’s no longer a matter of if, but of when.
I’d say wait for the retrenchment if you’ve worked in that company for more than two years. The severance package is going to help you transition from that job to another.
The more you receive from your current company, the better. You will need the money to start anew.
But if your “better offer” elsewhere cannot wait any longer, jump ship. The downsizing or closure may take a couple of months or even a year if the company is strong-willed.
Don’t let the illusion of a separation pay stop you from taking a better and more stable opportunity elsewhere.
If you can’t decide yet, perhaps try a more passive route. Don’t make any huge purchases or investments, and save up for the upcoming financially challenging months.
Losing your job is going to be difficult. Take the route that secures your financial future whether it be banking on a severance pay or jumping on a new job.
To all those who are looking for new jobs, I wish you all the best in these difficult times. Laban!2