Negotiate for severance?

[floattuber]

It seems that a company I interviewed with recently likes me and wants to go ahead with the next step. I've been reading up on salary negotiation and the book suggests I ask for 6 months of severance pay, especially since I'm moving to a new state and a change in career. However, the book is mainly geared for business people, not engineers. Is severance pay a typical thing that engineers negotiate for? If so, how much is fair?

The company is small and has acquired/merged with quite a few companies over the years and has just completed another merge last week. This makes me a bit nervous about my job security.

 

[ajack1]

In the UK this is called notice it is the amount of time or money a company has to give an employee should they wish to terminate employment (other than gross misconduct) it is usual for the employee to have to give the same amount of time, this would always be discussed in negations about contracts and would be part of the written contract of employment.

Most other “perks” would also be included in this contract, sick pay, holiday entitlement, share options, company car, medical plan and the like. Bonus is often more of a grey area not many companies will state an amount or percentage.

Of course none of this applies if you are flipping burgers, but then I doubt any on this site are.

 

[SomptingGuy]

To clarify...

If you are (or more accurately your post is) made redundant (a complicated process in larger companies) there are various EU laws that look after you, including statutary payments based on length of employment.

Just leaving or being fired (for misconduct or incompetency) is a different thing - you get your notice, whether you work it or not.

 

[kchayfie]

There is a statutory minimum in the UK that a company must pay if you are laid off. Both employment contracts I've had have stated a higher than minimum which builds up to higher percentages the longer you work there. One guy I used to work with had his time in service honoured by his new employer when he switched to work for them in completing the project he'd been on and then decided the new employers weren't really a good outfit to work for and managed to switch back to the first employer still maintaining the years in service bit in his contract. By the time they laid him off he got the best part of a year's salary to cushion the fall.

I on the other hand would have been entitled to about 1 months salary so I didn't stick around to find out!

 

[HVACctrl]

Severance is not too common from what I've seen in the US- except maybe upper positions.

We do have unemployment pay, which is pennies on the dollar, but I guess its better than nothing. IF it were too much, who would look for that next job right away?

Ed

http://www.engineerboards.com

 

[SomptingGuy]

"Severance" is also tax-free in the UK, so if you do the sums it really adds up. I've been here 16 years, so with a 1.5 week per year payout I'm looking at more more than 8 month's effective salary should I get the boot. That should be long enough for a bit of a holiday before finding a new job.

Having worked in America, I'm always amazed and pleased at our safety net here.

 

[ajack1]

That may not be strictly true SomptingGuy, the bare legal minimum is worked out as
· 1½ week’s pay for each complete year of employment when you were aged between 41-64 inclusive
· 1 week’s pay for each complete year of employment when you were aged between 22-40 inclusive
· ½ week’s pay for each complete year of employment when you were aged between 18-21 inclusive. Employment before the age of 18 is ignored when working out statutory redundancy pay.
So 16 years service could be as little as 12 ½ weeks money and even then it is not what you earn it is capped at I believe £290/ week. Even at 16 years at 1-½ weeks per year that still only works out at £6960, which even tax-free I seriously doubt amounts to the equivalent to 8 months money.
This is of course the legal minimum but unless you have it written into your contract that is almost certainly all you would receive. This is why many people negotiate this at interviews.

 

[IRstuff]

Severance is also known as "golden parachute," such as what Mullaly will get for joining Ford, after leaving Boeing.

Typically severance is not given in the US, other than in the following cases:

>>1 or 2 week notice for low-count layoff, as a courtesy, so that you can find another job while still technically employed
>>6 month notice for major plant reductions, required by law, so you have time for retraining/job hunting while still technically employed
>>Percentage based on years of service for plant closings, as a goodwill gesture, would be in addition to the 6 month notice
>>Golden parachutes for high-level executives, negotiated as part of the employment contract, but employment is at will and notice may or may not be given




TTFN

 

[HVACctrl]

I guess the UK is different than the US. The legal minimum here is whatever they still owe you when the doorknob hits you!

Unemployment benefit payment is something the government gives you on a monthly or weekly basis (not sure which), but, again, it doesn't amount to much and doesn't last long. Your former company can fight that if you were fired for wrong-doing. I think they have SOME financial responsibility towards the unemployment benefit.

Ed

http://www.engineerboards.com

 

[Beggar]

Unemployment: I just filed and it's currently $450 per week for up to one year provided your are (a) looking for work, (b) haven't turned down any work, and (c) not going to school or training.

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[GregLocock]

Coo. I could comfortably live on that.

Anyway, looks like the OP needs to explain what he means by severance pay, as I certainly (mis) understood him to mean some sort of golden hallo.

In OZ, in the auto industry, typical payouts are between 3 and 6 weeks pay per year of service, I imagine there are various caps on that. I guess the guys at Mitsubishi will be setting the new benchmark.





Cheers

Greg Locock

Please see FAQ731-376 for tips on how to make the best use of Eng-Tips.

 

[Beggar]

Unfortunately, cost of living in California chews that up in a hurry.

Still, $11/hour for job hunting is a pretty good deal.

Of course, there's a 4.5% payroll tax to fund it...

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[floattuber]

Wow, been away for a couple days and come back to dozens of new posts!

HVACctrl had it right:
"Sometimes, companies will give an employee several months or some other amount of their regular pay when they are fired or laid off. Its called severance pay. Say an employee is laid off next week. The company might give him a check worth about 3 months of his pay as they let him go to ease the firing and to give him a cushion while looking for new employment.

I think the original poster meant that while negotiating with the new company for whom he will work, he also wants to negotiate, up front, the amount of money (severance pay) the company will give him should they fire him in the future. "

So I wanted to negotiate with my (hopefully) future company several months of pay if they were to downsize or otherwise lay me off. Like I said they just merged with another company and I can easily see them change directions with my job.

But it seems like I need to be further along in my career to negotiate severance. Since it's a career change I'm starting over so I don't have much bargaining power. I'm going from semiconductor (mostly materials engineering) back into my true calling which is mechanical engineering and the only bargaining power I have is that I'm still currently employed.

 

[floattuber]

Well, seems like I might have been right about being worried about the merger. They emailed back and said they are "re-evaluating all positions and company structure". I'm assuming that had I moved out there I could have been layed off right away and would have been left high and dry.

Oh well, so close. I was really hoping to get the job as I was perfectly suited for it and sounded like I could learn a lot. My fingers are still crossed and hoping they'll call back when they figure things out.

 

[HVACctrl]

Sorry to hear that. Ho;efully, it still goes through.

Ed

http://www.engineerboards.com

 

[Beggar]

Much better to learn it now than after you'd already moved.

Besides, the results of their evaluation might still lead them to be interested in your services.

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