Asia: Mutual separations and exiting employees

17 August 2016

HR practitioners and in-house counsel have often had to think about mutual separations as a way to 'exit' employees. This month, we take a look at some frequently-asked questions in Singapore, Hong Kong, Japan, China, Indonesia and Thailand.

Country	Are employer-initiated mutual separations common?	What payments are typically made in a mutual separation?
Singapore	No, save in redundancy situations or where the employee is a senior one and there is a negotiated exit.	an ex gratia payment payment in lieu of notice (if required) payment of accrued but untaken annual leave pro-rated payment of an Annual Wage Supplement, where the employee has a contractual entitlement
Hong Kong	Not as common as in some other jurisdictions (like Indonesia or Japan), where it is more difficult to terminate unilaterally. However, we often see mutual separations initiated in redundancy situations or for negotiated exits.	an ex gratia payment payment in lieu of notice (if required) payment of accrued but untaken annual leave pro-rated payment of any 'end of year payments', where the employee has a contractual entitlement severance or long service payments, where the employee has a statutory entitlement
Indonesia	Yes, as otherwise the employer will need to obtain a court order before it is able to terminate employment.	depending on the circumstances, payment of either the standard or enhanced statutory severance package (comprising of a severance payment, a service payment and compensation pay) an ex gratia payment can also be made
China	Yes, employer-initiated mutual separations are relatively common.	an ex gratia payment payment of accrued but untaken annual leave (which must be paid out a special rates) severance, where the employee has a statutory entitlement
Thailand	No. Mutual separations are usually only initiated in redundancy situations.	an ex gratia payment payment in lieu of notice (if required payment of accrued but untaken annual leave severance, where the employee has a statutory entitlement all other contractual entitlements
Japan	Yes, as it is usually very difficult for an employer to terminate employment in Japan.	an ex gratia payment payment in lieu of notice (if required) depending on the employer's work rules, payment of a retirement allowance

For more information, please contact Fatim Jumabhoy at [email protected].

Article tags

redundancy severance payments

Related categories

Asia Redundancy Termination of employment

Key contacts

Samantha Brown

Managing Partner, Employment, Pensions and Incentives, UK and EMEA, London

Steve Bell

Managing Partner, Employment, Industrial Relations and Safety, Asia and Australia, Melbourne

Emma Rohsler

Partner, Head of Employment, Pensions and Incentives, EMEA, Paris

Tim Leaver

Partner, London

Andrew Taggart

Partner, London

Fatim Jumabhoy

Partner, Head of Employment & Workplace Investigations, Asia, Singapore

Barbara Roth

Partner, New York

Christine Young

Partner, London

Disclaimer

Herbert Smith Freehills Kramer LLP and Prolegis LLC have established a Formal Law Alliance licensed by the Legal Services Regulatory Authority of Singapore known as Herbert Smith Freehills Kramer Prolegis Alliance, with Singapore law advice provided by Prolegis LLC. The two firms cooperate closely in Singapore to deliver a complementary and seamless legal service.