Pay Attention to Resigning Employee's Rights

Pay Attention to Resigning Employee's Rights 

To ensure a good goodbye in your professional relationship, and to remain compliant to the regulations, pay attention to these pointers when an employee is resigning.

When an employee is resigning, sometimes we’re more focused on how to refill the vacant position with the best talent, as soon as possible to avoid unwanted effects. Yet, let’s not forget on having the proper offboarding for the leaving employee.

HR needs to understand that the rights of employees who resign are already regulated in the Manpower Act. Number 13 of 2003. One of the highlights is of course the financial rights of employees who resign.

Is it necessary? Isn't severance pay only for those who have been laid off? Yes, that's true. However, there are also other costs that companies have to pay when an employee resigns voluntarily. This is known as Uang Penggantian Hak (UPH). Let's see what the law says.

So, the compensation for the right in question is a monetary replacement for the following:

- Annual leave that has not been taken and has not fallen
- Bonuses/incentives that are the right of the employee
- Transportation allowance
- Service award (in accordance to their years of service)
- Housing allowance that is set at 15% (fifteen percent) of the service award for those who meet the requirements
- Other matters stipulated in the employment agreement or company regulations.

For the record, the amount of annual leave entitlement is calculated proportionally according to the fixed income (basic salary + fixed allowance) times the remaining period of leave that has not been taken.

Meanwhile, service award allowance is given to those who are included in the non-management committee, and the amount of which can be adjusted according to the company’s policy.

To avoid unwanted incidents from resigning employees, HR should include detailed rights and obligations of these employees in their employment contracts at the beginning of recruitment, and ensure they understand these things before resigning.

Indeed, sometimes as managers of the HRD department, we can be confused with the many things we have to remember. Working with an MPHRO partner will help you to keep these detailed calculations from missing and ensure your organization remains compliant. Consult KPSG about outsourcing and recruitment on this matter.

You May Look Other Articles: 

1. Leave Management that can Boost Employee's Engagement

2. The Advantages of Outsourcing Your Recruitment Process