How to structure Severance Package - some ideas !

A majority of the 10,000 excess staff at Satyam Computer Services are set to be offered 40% of their salary for six months in what can be termed as a severance package being firmed up by the beleaguered IT firm. 

The top management of Satyam in consultation with its new owner Tech Mahindra has prepared a list of around 10,000 employees who have not been billed for over six months now. These employees are set to be offered 40% of their existing salary for six months, along with medical insurance and provident fund.  But they may eventually have to leave the firm. 

Non-billable employees have been short-listed as they do not bring in any revenues to the IT firm. Satyam’s revenues have been under pressure as many customers snapped ties with the firm after its defamed founder B Ramalinga Raju admitted to perpetrating a Rs 7,000 crore financial fraud. 

Raju had hired more number of employees to inflate revenues and profits of the firm, and the economic downturn has only compounded Satyam’s woes, forcing Tech Mahindra to look at a separation package for the excess staff in the Hyderabad based outsourcer. 

Kiran Karnik, who was chosen by the government to be on the Satyam board and salvage the firm, said unless substantial steps were taken to contain costs, Satyam could go under and risk the jobs of all employees. 

The government-appointed board had suggested a number options to the new management including organisation-wide salary cuts, keeping employees on a virtual bench and sending them on a sabbatical. In the last two cases, the company would have to pay only part of the salary to these employees. 

Vineet Nayyar, the CEO of Tech Mahindra and now whole time director on Satyam, declared that the company had an excess staff of around 10,000. 

The employee strength at Satyam is reckoned to be around 42,000. It is likely to drop to 32,000, if the proposed plan to create a “virtual pool” is implemented. 

Non-billable employees across all levels will be impacted, though entry and middle levels will see more exits.   “We recognise that we have to deal with the situation and are exploring the most humane ways to tackle this issue,” said Satyam Computer Services marketing global head T Hari. 

The company is talking to a dozen outplacement firms to help people who are laid off find new jobs. It is also planning to tie-up with engineering colleges for PG courses and would fund employees who wish to enroll in these programmes. 

A few companies have also written to Satyam to take some employees on board. Employees, who have been identified for lay offs will also have access to all the training programs offered by Satyam, said Mr Hari.   The company plans to have financial counsellors to help out those whose exits are imminent. 

Source : EconomicTimes

Jet reinstates all sacked employees

Jet reinstates all sacked employees

Less than 48 hours after Jet Airways announced the retrenchment of 1,900 employees, the airline has decided to reinstate all the employees.

Jet Airways Chairman Naresh Goyal, in the late evening press conference on Thursday, requested all the sacked employees to come back to work from Friday.

"I apologise for the trauma which the sacked employees have gone through in last two days. The company is like my family and so are the employees. As the father of the family, I cannot see unhappy faces. My conscious does not allow me to see my employees worried."

Stating that he had not taken the decision under any political pressure, Naresh Goyal said that the management of the company took this decision of sacking the employees due to the financial woes that the entire industry is going through. Now it is my decision alone to take back all the employees.

"Nobody, including my wife, is involved. All the employees are my family, I cannot see tears in their eyes. I have nothing to do with Kingfisher; the decision is not relate to the alliance we have."

"The management," he said, "will have to understand the issue as it is about the welfare of the employees who have been hired by the company. The management may not like my decision but I have made it. We cannot bring economics, mathematics, figures and money in this issue," he added.

Goyal said he took the decision from his heart as he "could not sleep for last two days. For me economics cannot be the only important factor and I will go ahead with my conscience."

Distancing himself from the decision that provoke sharp protest from the employees and some political parties Goyal said, "The management has decided it and when I read about it I saw tears in the eyes of their eyes, I decided on my own to call them back."

"There is no internal or external pressure. As a family we will decide how to fly and keep the airline offload," reiterated.

Asked about Maharashtra Navnirman Sena Chief Raj Thakre threat that he would not allow Jet to fly from Mumbai, Goyal said: "I have not talked to anybody. It does not matter what anybody says. I have not even asked my wife," an emotionally choked Goyal said.

Jet-govt deal for bailout?

However, industry sources fell that Goyal has taken the decision of reinstating the sacked employees after speaking with Civil Aviation Minister Praful Patel.

The sources claimed that private airlines, including Jet and Kingfisher, had already struck a deal with the government to get a Rs 4,700-core (Rs 47 billion) bailout package to help them stay afloat.

Sources said that the government (read Praful Patel) had linked the bailout package to the reinstatement of sacked employees, which was why Jet Airways had decided to reinstate its sacked employees.

Many Questions remain unanswered :

Does HR team exist ?
Does it talk to MD on lay off
Did MD approve lay off ?
Is HR involved in revoking lay offs ?
Who ordered re-instatement ?
What are the terms of employment ?
Will they lay off at a later time quietly ?

Source : rediff.com