Resign or get retrenched?

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. (Read full story on sunstar.com.ph/cebu)