NNPC Limited Exit Management PDF

NNPC Limited HCM Processes and Procedures 8.0 Exit Management This process describes all activities involved in managing employee exit in NNPC Limited and facilitating the payment of exit benefits where applicable. Objectives The objectives of this process are to ensure: 1. Proper management of emp...

NNPC Limited HCM Processes and Procedures 8.0 Exit Management This process describes all activities involved in managing employee exit in NNPC Limited and facilitating the payment of exit benefits where applicable. Objectives The objectives of this process are to ensure: 1. Proper management of employee exit from NNPC Limited 2. Timely payment of terminal benefits as and when due Exit Management Policies S/N Description 1. Nature of Employee Exit A. An employee may exit from the services of NNPC Limited following Resignation, Retirement, Death, Redundancy, Termination and Dismissal. Resignation and Termination B. Any employee who resigns from the company shall: I. If his/her services have not been confirmed, give one month’s written notice to the Company, or pay one-month basic pay/salary in lieu of notice for employees within the management grade (N-5 and above), while employees below the management grade are to give one month’s written notice to the Company or pay two weeks basic pay/salary in lieu of notice. II. If his/her services have been confirmed, give three months’ written notice to the Company, or pay three months basic pay/salary in lieu of notice for employees within the management grade (N-5 and above), while employees below the stated grade are to give one month’s written notice to the Company or pay one- month basic pay/salary in lieu of notice C. The employee must submit a letter of resignation to HCM through his/her Unit Head. D. Similarly, when the services of an employee are terminated by the Company, it shall: I. If his/her services have not been confirmed, give one month of written notice to the employee or pay one-month basic pay/salary in lieu of notice for employees within the NNPC Limited HCM Processes and Procedures Exit Management Policies management grade (N-5 and above), while employees below the management grade are to be given one month’s written notice by the Company or pay two weeks basic pay/salary in lieu of notice. II. If his/her services have been confirmed, give three months’ written notice to the employee, or pay three months basic pay/salary in lieu of notice for employees within the management grade (N-5 and above), while employees below the stated grade are to be given one month written notice to the Company or pay one-month basic pay/salary in lieu of notice Final Settlement of Dues E. Once an employee has put in their resignation letter, the exit process is triggered with an exit interview conducted and an exit clearance form shared with the employee. F. The employee will obtain a sign-off on the exit clearance form from his/her Unit Head releasing the employee from his/her responsibilities. This will be followed by Finance & Accounts (who will calculate his/her final entitlements and communicate same to the employee), IT (note final day to retrieve IT equipment with employee and cut-off all IT related access), and the Human Capital Managements department. G. The exiting employee must hand over his/her Identity Card and any other assets of the Company in his/her possession to the Human Capital Managements department and get the Release Certificate. H. The employee who is exiting will have to settle all his/her outstanding liabilities e.g., loans, etc. prior to the receipt of their end-of-service benefits. I. Pensions and /or Gratuities at the rate prescribed in accordance with the Compensation and Benefits Policy shall become payable to an employee if one of the following events occurs: I. An employee who has served for five (5) years but less than ten (10) years with the Company is eligible to draw gratuity only at the rate documented in the Compensation and Benefits policy. Employees on the defined benefits scheme are not eligible to draw pension except in cases as described in the Compensation & Benefits Policy. while employees on the defined contributions scheme will only be eligible to draw pension based on provisions of the Pension Reform Act (2014). NNPC Limited HCM Processes and Procedures Exit Management Policies II. On retirement or withdrawal of an employee’s service from the Company after serving for ten (10) years or more, determined in accordance with any laid down procedure unless or when the employee has attained the age of 45 years. III. An employee has been pronounced not suitable for further service on health grounds by a properly constituted Medical Board. IV. An employee is totally or permanently incapacitated while in the service of the Company. V. On the abolition of an employee’s office or position or upon an employee being rendered redundant. VI. If an employee is required by the Board of Directors to withdraw or retire from service in the public interest. VII. On compulsory retirement for the purpose of facilitating improvements in the organisation of the company so that greater efficiency or economy may be affected. On attaining the age of 60 years, or 35 years length of service in the Company, whichever is earlier. IX. Dismissed employees and Employee with reason shall be entitled to their pension contributions including that of the Company. Such employees will not be entitled to gratuity. VIII. NNPC Limited HCM Processes and Procedures Exit Management Policies 2. Job Abandonment A. For an employee to be said to abandon his/her job, the line manager of such an employee must have reached out to the employee in question or leveraged the contact details provided to the HCM team (the line manager is to inform the HCM team once he or she cannot reach the employee after 24 hours during a work week) of the employee’s next of kin to reach out to such an employee and ascertain the employee is doing well and the reason for his/her absence from work is justifiable or not. B. Any employee who absents him/herself from his/her duty for two (2) consecutive days or more, without any permission from his/her immediate N-5 or Unit Head, will be deemed to have abandoned his/her job as such, the process of consequence management shall be triggered. C. The Company shall treat abandonment cases as follows: I. If the employee has not been confirmed: abandonment. II. If the employee has been confirmed, but he/she is still under retirement age: resignation without notice. III. If the employee is due for retirement: voluntary retirement. D. If an employee is declared missing for one year and a Committee appointed by the Board of Directors of the Company has investigated his/her disappearance and recommended presumption of death of such employee, the provisions of Retirement/Terminal benefits shall be applied in determining the benefits due to his/her estate. NNPC Limited HCM Processes and Procedures Exit Management Policies 3. Retirement A. NNPC Limited’s Retirement Age is sixty (60) years, or thirty-five (35) years of service (whichever comes first). If a Employee seems to possess unique competencies to perform a particular job, such Employee will however only be engaged on a contract basis provided there is no in-house resource/competence for the role and such contract will be approved by the NNPC Limited Board. B. Employees may however voluntarily retire before the age of Sixty (60) years or thirty-five (35) years of service. Such employees can only draw from their pensions upon attaining the age of 45 or 50 (45 years for defined benefits & 50 years for defined contributions pension schemes). C. NNPC Limited operates two categories of pension schemes, namely; I. The Defined Benefits Pension Scheme: Employees on the Defined Benefits Pension Scheme are those hired prior to 1st July 2014 when the Pensions Reform Act of 2014 was signed into law in Nigeria. Their pensions are managed by the NNPC Pension Fund Limited (NPFL). Withdrawals from this pension scheme are made upon attaining the age of 45 and being in the service of the Company for 10 years. II. The Defined Contribution Pension Scheme: Employees on the defined contributions pension scheme are those hired from 1st of July 2014 when the Pensions Reform Act of 2014 was signed into law in Nigeria. Their pensions are managed by their chosen Pension Fund Administrators (PFAs) in accordance with the Pensions Reform Act of 2014. Withdrawals from an individual pension account are made by applying to the Pension Fund Administrator chosen by the employee. (Refer to the Compensation & Benefits Policy for details) NNPC Limited HCM Processes and Procedures Exit Management Policies 4. Redundancy A. Redundancy means involuntary and permanent loss of employment because of excess manpower. The Company will use its best endeavours to find alternative employment for an employee before declaring him/her redundant. B. Redundancy notice period Employee shall be three (3) months’ notices. C. The Company shall keep Union representatives and the workforce informed of any anticipated redundancy and will discuss the situation in detail with them. D. The Company will in determining which employees are to be redundant, apply the principle of “First in, Last Out”, in situations where all other considerations are equal. E. In the event of Employee becoming redundant, the Company shall pay to such Employee, redundancy benefits as follows: 5. I. One and half (1.5) monthly terminal base salary for every completed year of service up to a maximum of ten (10) years of service. Such Employee may be retired with full benefits if his/her services are no longer required by the Company. II. 15% of Annual Terminal Base Salary shall be paid as Relocation Allowance for the transportation of self, family, and personal effects. III. Gratuity Fund Benefits shall be paid to Employee who are participating in the scheme. Handover Notes A. All employees proceeding on leave period beyond one (1) week shall prepare and submit to their supervising officer 1 week before proceeding on leave a comprehensive handover note. B. The handover note shall be discussed with the relief officer (the employee responsibilities are being handed over to) and the N-5 to ensure completeness and agreement. C. The Employee proceeding on leave shall ensure the complete transfer of responsibilities to the relief Employee with respect to relevant documents and information. D. Handover notes shall also be used during Employee movement i.e., transfers, postings, and redeployment. NNPC Limited HCM Processes and Procedures Exit Management Policies 6. Exit Interview A. An exit interview shall be conducted by the Career Development Unit for all Employee leaving NNPC Limited with the exception of employees due for retirement, summarily dismissed, or terminated, to determine reasons for resignation. 7. Reference for Exited Employee A. NNPC Limited shall issue a reference to an employee only where it is demanded by the employee’s prospective employer and where the Employee has fully paid any final liability or agreed a suitable repayment plan with NNPC Limited. Such references shall be given without prejudice and shall reflect the true performance of the Employee while in the employment of the Company. 8. Death Benefits A. NNPC Limited shall confer additional benefits on the employee in the case of injury, permanent disability, and death in the course of duty. B. An employee’s documented next of kin and designated survivor(s) shall be entitled to a gratuity that the deceased employee would have earned had he/she retired on the date of his/her death where the employee dies in the course of employment. C. The next of kin or designated survivor(s) shall be regarded as those persons whose names are furnished in writing to the Company by the employee or otherwise appear as such on the records of the Company. D. Pension which the employee would have been entitled to, had he/she retired on the date of his/her death shall be paid to the documented next of kin or designated survivor(s). Five Years’ Pension Guarantee After Retirement E. If an employee dies within five (5) years of his retirement, whether his/her retirement is voluntary or compulsory his/her (next of kin or designated survivor(s) shall be entitled to the pension award to the employee until the fifth (5th) anniversary of the date of his retirement. NNPC Limited HCM Processes and Procedures Exit Management Policies 9. Dismissal A. Dismissal is the common law right of an employer to terminate the contract of service of an employee with neither notice nor payment in lieu of notice on account of severe misconduct on the part of the employee which strikes at the root of the employment contract. B. The act of justifying summary dismissal must be one that offends the essential provisions of the employment contract, conduct which shows that the employee no longer regards or treats the contract of employment as subsisting. C. NNPC Limited shall opt for the dismissal of an employee, instead of the termination of his/her contract of employment with notice, where the conduct of the employee is of grave and weighty character, such that it undermines the relationship of confidence which exist between the parties. (See Disciplinary and Consequence management policy and process for more details on dismissible offences) D. NNPC Limited shall avoid summarily dismissing an employee except the offence is so serious that it requires the swift removal of such employee from the workplace. NNPC Limited HCM Processes and Procedures A. Procedures – Exit Management Responsib S/N le Party Description Job Aid 1. Identify Employee that are due to exit from the Company in the next calendar year or that have indicated a desire to exit. Applicable HCM Software (SAP, S4HANA) N-5 Note: • Employee exit may be in form of retirement or resignation. Resignations will be addressed to N-4 through their respective Unit Heads/ direct reports. 2. N-4 Where Employee termination exit is due to Email/ Ms. Word Based on directive from N-3, prepare termination letter, obtain relevant sign-off. Invite the employee to collect a termination letter. Proceed to Step 11 3. N-5 Where Employee resignation exit is due to Email/ Ms. Word Review resignation letter to identify the reason(s) for resignation and discuss with N- 4, where necessary. Go to step 11 4. N-5 Where Employee exit is due to retirement Email/ Ms. Word Compile a list of Employee due for retirement and forward to N-4 to obtain sign-off. 147 NNPC Limited HCM Processes and Procedures A. Procedures – Exit Management 5. N-4 Notify concerned Employee of retirement date and requirements for exit Six (6) months in the first instance and three (3) months after. Also notify other relevant parties such as direct supervisor, Unit Head, Records Management, IT, etc. Email Pre-Retirement Training Session 6. N-5 Develop/ update proposal for preretirement training session and discuss with N-4 for input to agree content of proposal. PowerPoint /Email Note: The content of the proposal shall include the proposed training content, facilitators, timing, duration, venue, other logistic requirements and the financial implication. 7. N-5 Update proposal with agreements from discussion and forward to N-4 PowerPoint /Email 8. N-4 Review proposal, provide input and discuss share updated proposal with N-3. PowerPoint /Email 9. N-5 Obtain approved proposal and communicate with all relevant parties. Also, liaise with Finance & Accounts and L&D to ensure provision of funds and logistic support for conducting the preretirement training session. Email 148 NNPC Limited HCM Processes and Procedures A. Procedures – Exit Management 10. N-5 Oversee the conduct of the preretirement training session and obtain feedback for continuous improvement. Email Note: The feedback will follow the appropriate Learning Evaluation Process. Exit Administration 11. N-5 Provide Employee with Exit Forms and follow- up to ensure prompt completion. Obtain forms from exiting Employee on completion. Email/ Ms. Word Note: The Exit Form is designed to ensure that the Employee effectively hands over his/her schedule and clears with all relevant departments any financial or nonfinancial entitlements/indebtedness. 12. N-5 Liaise with relevant departments such as Payroll unit, IT and Facilities Department etc. to determine financial and non-financial entitlements/ indebtedness of exiting Employee and agree on the mode of resolving such issues. Phone/Email/ Ms. Teams 149 NNPC Limited HCM Processes and Procedures A. Procedures – Exit Management 13. Exiting Employee Where employee is indebted to the Company The indebted amount is set-off against employees terminal benefits. 14. N-5 Where employee is unable to payoff indebtedness Review exit forms, Employee entitlements/ indebtedness and recommend action steps for repayment. Forward forms and recommendations to the N-4. Physical Meeting /Email Email/ Ms. Word . Note: The N-4 may hold meetings with the concerned Employee and relevant departments to agree on the best approach to the indebtedness/ entitlements in line with existing policies. 15. N-4 Review exit forms and Email/ Ms. recommendations and provide input Word and obtain approval from N-3, as required. Discuss Employee. Repayment plan with exiting 16. N-5 Obtain approved exit forms and recommendations and forward to the concerned Employee. Email/ Ms. Word Follow up with relevant parties i.e., relevant supervisor/ Unit Head, Finance and Accounts, IT, and Facilities to ensure compliance with 150 NNPC Limited HCM Processes and Procedures A. Procedures – Exit Management recommendations. 17. Relevant Sign off on exit form as required. Email/ Ms. Word Unit s/ Departments 18. N-5 Obtain completed exit forms, signed-off by relevant Employee and verify authenticity of contents. Monitor Employee to ensure Employee exits on specified date. Email/ Ms. Word 19. N-4 Schedule and conduct exit interview with exiting Employee and document outcome of meeting. Email/ Ms. Word (HCM) /N- 5(HCM)/N5/N-4 of exiting Employee Note: Where cost considerations do not justify the conduct of face-to-face interviews, exit interview forms shall be administered and followed up with a telephone interview. Where established reasons are addressable, HCM shall strive to address such issues. Proceed to ‘Manage Employee Relations and Welfare: Process Employee Benefits – Terminal Benefits’ 151 NNPC Limited HCM Processes and Procedures A. Procedures – Exit Management 20. N-4 At the beginning of a new quarter (HCM) /N- 5(HCM)/N5/N-4 of exiting Employee Summarise findings from interviews conducted in quarter and develop Interview Report recommendations based issues highlighted. Ms. Office the exit the last an Exit making on any Forward report to N-3. Note: The Exit Interview Report will highlight the elements of the people management practices within NNPC Limited that the exiting Employee member is not satisfied with, with recommended action steps to resolve such issues. 21. N-3 Review report, provide input and discuss with the N-2 for approval of recommendations. Physical Meeting/E mail/ Ms. Teams 22. N-4 Obtain approved recommendations and communicate to relevant parties. Email/ Ms. Teams Follow up to ensure compliance. 23. N-4 (HCM) /N- 5(HCM)/N5/N-4 of exiting Employee Create a checklist of property/items the exiting Employee is required to hand over to HCM. Ms. Word 152 NNPC Limited HCM Processes and Procedures A. Procedures – Exit Management 24. N-5 On the effective date of exit Retrieve all company’s property (Laptop with power pack, internet dongle, mobile phone, ID card, HMO card(s), etc.) from exiting Employee on their last day at work and delivers the tools to the necessary custodian department. Custodian departments sign off on N-5’s property checklist and this is filed in exiting employee’s records. Physical Meeting/E mail/ Ms. Word/ Applicable HCM Software (SAP, S4HANA) Note: Ensure Employee exits as planned and update HCM system to reflect the new status. Ensure that all relevant documents are filled accordingly. Stop A. Input & Output Documents S/N 1. Document Description Type Frequency Source Recipient Resignation Letter Input As required Exiting Employ ee N-4 Provides relevant information on Employee resignation including reasons, timing etc. 153 NNPC Limited HCM Processes and Procedures A. Input & Output Documents 2. Exit Form Input As required N-5 Documents relevant Employee biodata and indicates that Employee has effectively handed over his work schedule and has been cleared by all relevant departments/units. 3. Exit Interview Questionnaire  Exit Interview Report Summarises key issues on NNPC Limited’s practices (especially people management) highlighted by exiting Employee and Recommended action steps. Exiting Employ ee Departm ent s to clear the Employe e Input As required N-4 Exiting Employ ee Output As required N-4 ▪ N-3 ▪ N-2 Designed to obtain information on the reasons for Employee member exit and elements of HCM management that the Employee member is most and least satisfied with. 4.  N (as required) 154 NNPC Limited HCM Processes and Procedures A. Key Performance Indicators Performance Measure Basis of Measurement Timeframe Target 1. Timely processing of exit benefits. Time lag between employees’ last day of service and submission of payment instruction to F & A. As required 4 weeks 2. Accuracy S/N nd completeness 3. Quality of Preretirement Training. Frequency of a errors in the indebtedness/ of benefits captured for exiting Employee. Percentage of participants satisfied with the training as indicated in the training evaluation questionnaires. Quarterly Zero Error As required 90 -100% 155 NNPC Limited HCM Processes and Procedures Exit Management Process Flow N-5 Start Identify staff that are due to exit from the company Where staff Where staff is due is due to for resignation retirement Yes Review resignation letter and discuss with MCDAS, where necessary N-4 Where staff is due for termination Yes End Update Proposal for Pre-retirement training and forward to N-4 to review and discuss with N-3 Obtain approved proposal and conduct Preretirement training session Exit Administration Provide staff with Exit form and liaise with relevant department on staff financial entitlement/ indebtedness Is Employee able to pay-off indebtedness? Yes Yes Yes Compile list of staff and forward to N-4 The indebted amount is setoff against employees terminal benefits. Notify concerned staff of retirement date and requiremen ts for exit. No Review Exit forms, indebtedness and recommend action. Forward to N-4 to obtain approval from N-3 and discuss with Exiting staff End End Forward approved Exit form to Exiting Staff and obtain sign-off from relevant departments and verify authenticity of contents Pre-retirement Training Session Obtain recommendation and communicate to relevant parties. Prepare the termination letter , obtain relevant sign-off. N-4 (HR)/N-5(HR)/N-5/N-4 of Exiting Staff Retrieve all staff Properties Schedule Exit Interview Proceed to Manage Employee Relations and Welfare: Process Employee Benefits – Terminal Benefits Summarise findings in the conducted interview, develop report and forward to N-3 ro review and obtain approval from Create checklist of Property/ items of Exiting Staff 138 141