6.

Other than going through retrenchment exercise, is there any alternative for
the company in term of employee restructuring option?

Voluntary Separation Scheme (VSS)

Workers can be encouraged to leave voluntarily, by offering them sufficient inducement, thus
reducing the headcount and the associated payroll costs. A Voluntarily Separation Scheme is
an excellent method for avoiding retrenchment. The likelihood of facing a claim of dismissal
without just cause or excuse is greatly reduced when a VSS is introduced because the
employees who participate in the scheme are considered to have resigned voluntarily. Some
workers may be near retirement age and would be happy to quit, providing there is a
monetary incentive to do so. The same is true of other employees who may have plans of
starting their own business or continue their studies.

Typically, Voluntarily Separation Scheme have the following characteristics:

i. An offer letter is issued to all employees inviting them to apply to join the scheme;

ii. Explanations are provided through a variety of channels as to why the VSS is necessary
and the benefits each successful applicant will receive;

iii. The benefits offered are higher that statutory termination benefits;

iv. A deadline or closing date are for applicants to be submitted is established;

v. A date for informing applicants whether they have been chosen to join the scheme pr not
is set;

vi. An advisory-counselling service for all employees to help them to make decisions
concerning their future id provided.

A voluntary separation scheme is more likely to be successful when:

 The employer has sufficient funds to provide the workers with attractive resignation
benefits so that they will take up the offer and leave. At the very last, the benefits need to
be more generous than the statutory termination benefits

 the national economy is strong so that workers are confident of getting another job, if
they so desire.
 the employer clearly reserves the right to reject any applicant who request to participate.
If this is not made clear to employees, the best and most talented workers may apply. If
their applications are successful and they leave, the employer will be left with a severely
weakened organisation.

 the scheme is truly voluntary Employees should not be targeted or pressured to apply. It
is certainly not advisable to single out any individuals and attempt to persuade them to
apply to join the scheme. if employees can show proof that they were forced to fill out a
VSS application form, they may be able to win a claim of constructive dismissal or
forced resignation. Thus, a VSS scheme should be offered to all employees in the
organisations, or all employees within a particular group or division.

 the deadline give for employees to decide whether they wish to apply to join the scheme
is short, perhaps not more than two weeks. The introduction of a VSS tends to be
stressful for all employees as it signifies major changes and worries about the future. The
longer it drags on, the lower productivity rates will drop.

An employer intending to implement a VSS must inform the nearest office of the Department

of Labour, at least one month before the exercise takes place.