"VOLUNTARY SEPARATION POLICY PERSONNEL ADVISORY To: All Civil Servants Date: 3rd October 2013 Subject: Voluntary Separation Policy 1. Introduction This Policy is being offered for a fixed period by the Cayman Islands Government to facilitate Ministries, Portfolios, Constitutional Offices and Departments (hereafter referred to as “Civil Service entities”) and employees (hereafter referred to as “applicants”), effecting a mutually beneficial separation. Where agreed, the separation will lead to the Employment Agreement between the applicant and the Civil Service entity being contractually discharged by mutual consent, and the applicant will leave the service. 2. Relevant Documentation Public Service Management Law (2011 Revision); Personnel Regulations (2011 Revision) Part 6 paragraph 54; Personnel Regulations (2011 Revision) Schedule 4. 3. Definitions 3.1. For the purposes of this Policy, the following definitional apply: Early Retirement is “retirement under section 32 or 50 of the Public Service Pension Law (2011 Revision) after attaining early retirement age (i.e. 50 years old) but before attaining normal retirement age (i.e. 60 years old); provided the participant has completed at least 10 years of qualifying service. Voluntary Separation is “Where a Civil Service entity no longer employs an applicant, following the entity’s acceptance of the applicant’s request to voluntarily leave the service under terms agreed within a Voluntary Separation Agreement. The Employment Agreement is contractually discharged by mutual consent resulting in voluntary resignation or voluntary early retirement. For the avoidance of doubt, such separations do not amount to a dismissal, redundancy, disability retirement, or retirement under special circumstances. Depending on the business case submitted and accepted by the Voluntary Separation Committee, the civil service entity may elect to make such post redundant after the applicant’s employment ceases through Voluntary Separation, or to otherwise achieve increased savings/efficiencies through structural changes.” 4. Details of Voluntary Separation 4.1 4.2. Who can apply for Voluntary Separation? Civil Service employees whose employment is governed by the Public Service Management Law (PSML) and who have an open ended employment agreement can voluntarily apply to leave the service through voluntary separation. Where an employee has more than one open ended employment agreement, an application must extend to all employment positions held within the Civil Service. Applications cannot be accepted from employees holding fixed term employment agreements as these contracts already have a pre-determined end date which provides the employer an opportunity to choose not to renew a contract without the need for additional compensation. Why might an employee apply for Voluntary Separation? Under the Voluntary Separation Policy, both the applicant and the Civil Service entity must mutually agree to voluntarily separate. Where a civil servant submits an application which is supported by a compelling business case from the Chief Officer, a successful applicant can be offered a compensation package (see paragraph 6 of this policy). In such a situation, a Civil Service entity must have demonstrated that it has achieved some positive results (financial, organisational, etc.) by facilitating the voluntary separation (see paragraph 7.3. of this policy). The reasons why a Civil Servant might voluntarily ask their Ministry or Department to end their employment through voluntary separation will inevitably vary. An example might be where an employee (who could not otherwise have afforded to resign or retire) wishes to consider voluntary separation in order to change their work direction, start a business, spend more time with their family, develop personally through travel or furthering their training or education. 5. Voluntary Separation – Applications for 2013/14 Financial Year 5.1. Applications will be received for voluntary separation for a one-month period from 1st October through 31st October 2013 (see Appendix 1 and Appendix 3 of this policy). Only limited applications will be approved and in any event, both the applicant and Chief Officer must voluntarily recommend the voluntary separation to the Voluntary Separation Committee (VSC) who will make the final decision (see paragraph 8). Due to limited budgets and the need for a strong business case to be made by the relevant Chief Officer, only the strongest applications will be approved. 6. Voluntary Separation – Compensation for 2013/14 6.1. The compensation awarded to successful applicants for voluntary separation (VS) under this Policy will be based on their consecutive/continuous service within the civil service (i.e. the amount of fully ‘completed’ years of continuous service with core Government). Please note that as it relates to healthcare following a VS, the compensation package also includes a limited duration CINICO coverage that would not otherwise be available. For example, for persons who access VS through voluntary resignation, the policy allows for 6 month’s CINICO coverage for persons with 6 or more fully completed consecutive years’ service. It allows 3 month’s coverage for persons with 5 or less completed years. Persons who access VS via early retirement are already entitled to free healthcare as part of their post-retirement health benefits pursuant to the PSML. Please see the chart below: * under rules prescribed by the Public Service Pensions regulations, qualifying service is that which is taken into account in determining whether or not a participant is eligible for early retirement. Having 10 or more qualifying years and being between the ages of 50 and 59 is important for the purposes of determining whether an employee is eligible for early retirement and therefore to commence drawing a pension prior to the normal retirement age of 60. Having 10 or more consecutive years, amongst other requirements, is important for the purposes of determining whether an employee is eligible for free post-retirement health benefit pursuant to paragraph 18 (2) of Schedule 1 to the Personnel Regulations (2012 Revision). 6.2. There is a maximum pay-out under any voluntary separation package. The total compensation for voluntary separation is inclusive of the value of CINICO coverage, other than for persons leaving by voluntary early retirement with over 10 years qualifying service - as this is a statutory obligation. The maximum pay out: • cannot (in monetary terms) exceed in total a value which is twice that of an applicant’s current annual salary; and • must be subsequently reduced by an amount equivalent to any and all outstanding debts owed to the Cayman Islands Government by the applicant (e.g. loans, salary advances, government’ school fees, CICSA housing loans, garbage fees). 6.3. In determining the compensation available for voluntary separation, the following factors were considered: • the budget(s) available to fund such compensation; • the existing measures/formulas within the PSML regarding severance pay; • the possibility of enhanced/additional medical coverage; • the commitment to reduce size of the civil service by 360 posts within 5 years (i.e. between 2012/13 and 2016/17); • the aim of achieving targeted reductions in manner which is fair and minimizes negative impacts on staff • the aim of expeditiously streamlining the service early in the 5-year period so as to maximise the value of accrued savings during that timeframe; • the business cases for CIG to fund such separations in respect to forecasted savings/efficiencies of voluntary separation in 2013/14 (see paragraph 7.2); and • the need to ensure the compensation is fair and attractive to potential applicants. 7. 7.1 Submitting an Application for Voluntary Separation The application process is as follows: • the standard application form within Appendix 1 of this policy must be voluntarily completed by the employee (or the ‘applicant’). The completed application form must confirm that the applicant has considered at least all of the relevant employee factors as outlined in paragraph 7.2. of this policy, before making his/her voluntary application; • the applicant should then forward their application form to their Chief Officer on or before 31st October 2013 (see Appendix 3); • the Chief Officer must then review the application and decide whether or not they are comfortable (a) that the applicant has considered at least all of the relevant employee factors as outlined in paragraph 7.2. of this policy; and (b) that they support and can further justify the separation from an organisational/business perspective (see paragraph 7.3. of this policy); • the Chief Officer must then complete their section of the application form, to contain either reasons for supporting or not supporting the application; • where the application is not supported by the Chief Officer, the application form should be returned to the employee/applicant. Where the application is supported, it should be submitted to the Voluntary Separation Committee (see paragraph 8) via the Chief Officer of the Portfolio of the Civil Service. 7.2. Employee/Applicant Considerations Any potential applicant should fully consider the reasons for wanting to voluntarily separate from employment with the Cayman Islands Government. Although not an exhaustive list, factors for employees to consider include: • can I apply for voluntary separation? (see paragraph 4.1); • what would be the ‘terms’ of my voluntary separation? Electing to leave via voluntary separation is not merely resigning from an individual department, because it has the effect of undertaking to leave CIG employment for a period of at least five (5) years. See Appendix 2 of this policy for a list of the typical terms of a voluntary separation; • what compensation payment would I receive if it was agreed for me to voluntarily separate from Government? See paragraph 6 of this policy. An individual calculation of the potential compensation can also be obtained by using the ‘Compensation Calculator’ distributed with this advisory; • what would be the likely impact on my pension if it was agreed for me to voluntarily separate from Government? An applicant’s pension contributions will cease upon their voluntary separation agreement taking effect, as they will no longer be employed by Government. Where it is agreed that applicants have voluntarily separated through early retirement (i.e. they are over 50 years old with at least 10 years qualifying service), their pension earnings in retirement will be calculated by the PSPB in the normal manner prescribed by Law. Further details can be found from the Public Service Pensions Board at pspb.gov.ky • what would be the impact on my medical/CINICO benefits for myself and my dependents, if it was agreed for me to voluntarily separate from Governments? Depending on which category an applicant’s voluntary separation compensation falls (see paragraph 6 of this policy), CINICO coverage will continue for a specified period of time following voluntarily separating from Government; • what financial advice should I obtain before deciding whether to apply for voluntary separation? Applicants considering voluntary separation should obtain financial advice before doing so. Discussions should include long term financial planning, early retirement planning (where applicable) and the financial considerations relating to alternatives to working within Government for a period of at least 5 years. Applicants are free to use whomever they choose to provide financial advice. The Cayman Islands Government has identified an independent financial consultant who is available to persons considering whether to apply. Please contact Lewis Consulting Services via email at [email protected] or on 916-2000 for further details; • what other consultation should I consider? Members of the Cayman Islands Civil Service Association (CICSA) can also obtain guidance and support from the Management Council of the Association. Please email [email protected] for further details; • what is the likelihood of my voluntary separation application being accepted? Obtaining agreement to voluntary separate from Government requires both Chief Officer and Voluntary Separation Committee (VSC) approval. Applications will not therefore be straight forward, as a Chief Officer and the VSC can only support an application where they are comfortable (a) that the applicant has considered at least all of the relevant employee factors as outlined in this paragraph of the policy; and (b) that they can further justify the separation from an organisational/business perspective (see paragraph 7.3. below). For example, although it may make financial sense for an applicant to attempt to voluntarily separate (and receive compensation) immediately before reaching 60 years of age, from an organisational perspective it will not - given that the applicant’s open ended contract will come to a compulsory end naturally at 60. 7.3. Chief Officer Considerations Chief Officers should consider whether a voluntary separation (application) could achieve a positive result for their Civil Service entity. Key factors which the Chief Officer should consider include: • Would a voluntary separation result in a significant cost saving to an entity? For example, where an entity is able to reasonably demonstrate that a voluntary separation would have medium/long term cost savings. This might include temporarily keeping a post vacant following a voluntary separation (or permanently removing the role from the structure); redistributing the responsibilities of a vacant post to other existing positions following a voluntary separation; re-structuring the relevant team in which a vacant post sits, and possibly revising/down grading the roles responsibilities within the new structure; retaining the current structure following a voluntary separation and filling a vacant post with a new employee on a lower salary point/overall remuneration level. • Would a voluntary separation have either a positive impact or no significant negative impact on an entity’s efficiency/service delivery? For example, where it is established that the loss of an applicant’s qualifications, skills, performance/reliability levels, team value and overall experience would not have an unreasonably negative impact on overall efficiency or services; the entity’s ability to deliver its legal requirements, or the entity’s ability to deliver its outputs/targets. • Would a voluntary separation result in there being either a positive impact or no significant negative impact on an entity’s employment arrangements? For example, where it is established that improvements are likely in terms of organisational structure, team working, development opportunities, role clarity and/or opportunities for succession planning. It might also be established that the voluntary separation may reduce the possibility of future redundancies within the particular Civil Service entity should demand for certain roles have been reduced. 8. Voluntary Separation Committee – Deciding who will be offered voluntary separation The Voluntary Separation Committee (VSC) will consist of • the Deputy Governor; • the Financial Secretary; and • the Chief Officer of the Portfolio of the Civil Service. Chief Officers will be asked to attend and participate in the Committee as required and to submit a business case evaluation for any application made by an employee within their Ministry or Portfolio. 8.1. The VSC will receive and review applications for voluntary separation, and then decide the outcome of such applications. When making its decisions, the Committee will consider • whether voluntary separation is the most appropriate route for a particular application, given its individual circumstances (e.g. does the application highlight issues which would be more appropriately dealt with through medical board retirement, retirement in the efficiency of the service or effective performance management?); • whether a voluntary separation would be in the interests of an applicant (e.g. has the applicant properly considered the factors outlined in paragraph 7.2. of this policy?); • whether a voluntary separation would achieve a positive result (financial, organisational, etc.) for the Civil Service entity by funding the voluntary separation (reviewing factors within paragraph 7.3 of this policy). 8.2. Applicants and appropriate Chief Officers will be informed of Committee decisions within four (4) calendar days of the committee meeting (see Appendix 3). The decision will take the form of either (a) confirmation that an application has been unsuccessful; (b) confirmation that an application has been successful and that a Voluntary Separation Agreement should now be developed by the appropriate Chief Officer. 8.3. Decisions of the VSC are deemed to be those of the Deputy Governor and are therefore not subject to appeal. 9. Voluntary Separation Agreement Where an application for voluntary separation is accepted by the VSC and the applicant has been informed of the acceptance, the Chief Officer (or officer with delegated responsibility) will meet with the applicant and • explain that a Voluntary Separation Agreement will be prepared for both the applicant and the Chief Officer of the Civil Service entity to sign (see Appendix 2); • summarise what will appear within the forthcoming Voluntary Separation Agreement; • determine whether the applicant is still interested in voluntarily separating from the service. 9.1. 9.2. Where it is agreed that a voluntary separation will be administered, a Voluntary Separation Agreement will be prepared by the Chief Officer and issued to the applicant (see Appendix 2). An important component of the Agreement will be that all parties agree that the applicant/employee is not eligible to return to work for the Civil Service for five (5) years. This measure is to be strictly enforced, with any (future) re-recruitment of voluntarily separated ex-employees being restricted to exceptional (and justifiable) circumstances only. For example, any diversion from this restriction will • be at the discretion of the Deputy Governor only; and • incur a charge on the ex-employee of either full or pro-rated payback of their voluntary separation compensation; and • require justification that the re-recruitment of the ex-employee will not in any way retract the organisational/business benefits experienced following the voluntary separation; and • require justification that the re-recruitment of the ex-employee is not into the same/ similar capacity from which they were voluntarily separated from; and • require justification that the situation within the service and/or ex-employee is significantly different as compared to the period when the voluntary separation was administered; and • require justification that the re-recruitment of the ex-employee would result in significant organisational or financial benefit; and • require justification that the ex-employee is indeed the best (and possibly) only candidate to be employed into a vacancy; and • require justification that the re-recruitment of the ex-employee will not result in the ex-employee financially (or personally) benefiting from the separation/re-recruitment situation. Other key components of the Voluntary Separation Agreement include: • an agreement to ‘discharge the existing employment agreement’ between the applicant and the Civil Service entity; • details of the compensation to be offered to the applicant; • that at least twelve (12) calendar days are provided for the employee to consider signing the agreement, and that even after signing, the applicant has a further four (4) calendar days to change their minds; and • the lump sum compensation payment (see paragraph 6 of this policy) will be paid shortly after the voluntary separation date. All Voluntary Separation Agreements will be accompanied by a job reference letter from the Civil Service entity, further confirming (at the very least) that the voluntary separation was not a dismissal from the Civil Service. 10. Administration & Further Information When administering the termination of employment of the applicant, a copy of the signed Voluntary Separation Agreement should be emailed to the HRIRIS team where appropriate ([email protected]). For further information on these guidelines, please contact the Strategic & Corporate HR Team of the Portfolio of the Civil Service. Ian Fenton Acting Chief Officer Portfolio of the Civil Service Appendix 1 1. APPLICATION FOR VOLUNTARY SEPARATION - EMPLOYEE Please complete this application and forward it to your Chief Officer by 31st October 2013 at the latest. Full Name: Current Job/Position Title: Department/Unit: Length of continuous service: Age: Telephone: Contact Email Address: Please provide your reasons for requesting voluntary separation: Please continue on a separate sheet where necessary Declaration I wish to be considered for voluntary separation in accordance with the terms of the Voluntary Separation Policy (dated 3rd October 2013). I confirm that I have read and fully understood the Voluntary Separation Policy & have fully investigated and understood each of the following areas, prior to making my application: I am allowed to apply for voluntary separation under the policy I understand my likely compensation payment under the policy I understand the likely impact of voluntary separation on my pension I understand the likely impact of voluntary separation on my medical/CINICO benefits I have obtained sound financial advice regarding voluntary separation I understand the likely ‘terms’ that will be included in a voluntary separation agreement I have thoroughly considered my long term financial position following a voluntary separation I have thoroughly and widely consulted before making my decision to apply (e.g. CICSA) I understand that by making an application, I will not be committing myself to accepting any offer which might be made by the Civil Service, and that the Civil Service is not bound to accept this request for voluntary separation. Each case will be considered in accordance with the Voluntary Separation Policy dated 3rd October 2013. Signed (Employee/Applicant): Date: 2. APPLICATION FOR VOLUNTARY SEPARATION – CHIEF OFFICER Full Name (Chief Officer): Current Job/Position Title: CHIEF OFFICER Following the review the details provided by the employee overleaf, please confirm whether or not you support the application for voluntary separation: Application Supported Application not supported In accordance with the Voluntary Separation Policy (dated 3rd October 2013), I can confirm that the following areas have been considered in making this decision: The details provided by the employee (overleaf) Whether or not the voluntary separation of the employee would result in a significant cost saving to my Civil Service Entity Whether or not the voluntary separation of the employee would result in a positive impact (or no significant negative impact) on my Civil Service Entity’s efficiency/service delivery Whether or not the voluntary separation of the employee would result in a positive impact (or not significant negative impact) on my Civil Service Entity’s employment arrangements. Please provide your reasons for either supporting or not supporting the application for voluntary separation: Please continue on a separate sheet where necessary Signed (Chief Officer): Date: Where the Chief Officer is in agreement with this application, the form (plus any relevant details) should be passed to the Voluntary Separation Committee by 18th November 2013 at the latest. Appendix 2 Confidential CAYMAN ISLANDS GOVERNMENT VOLUNTARY SEPARATION AGREEMENT – Discharge of Employment Contract AGREEMENT made on . THIS VOLUNTARY SEPARATION AGREEMENT (“agreement”) is made between (“Chief Officer”), (“Civil Service entity”), and (“employee”) of (jointly referred to as the “parties”). The Civil Service entity offered, and the employee accepted a voluntary separation package, subject to the conditions contained herein. 1. The open ended Employment Agreement (“Employment Contract”) between the parties dated relating to the employment of within the position of within , will discontinue on the (“the agreed separation date”). Both parties mutually agree to Discharge the Employment Contract on the agreed separation date. Both parties agree that this discharge of employment contract would be of mutual benefit to both the employee and the Civil Service entity. The discharge of the Employment Contract is binding for both parties and both parties are relieved of any obligations under the Employment Contact from the agreed separation date. OR . 2. The employee voluntarily applied for a separation package on . All parties accept that the subsequent process undertaken was fair and reasonable and in accordance with the Voluntary Separation Policy (dated 3rd October 2013). 3. The employee will be offered a “voluntary separation package” under the Voluntary Separation Policy (dated 3rd October 2013) and through this agreement. The voluntary separation package would comprise of the following elements: a) … b) … c) … 4. The total separation package, as stipulated in point 3 of this agreement, will be paid to the employee by at the latest. This will take the form of an immediate transfer into the employee’s bank account. 5. The employee agrees to maintain a good level of performance in position until agreed separation date as specified in point 1 of this agreement. The employee agrees to take all outstanding annual leave (pro-rated where appropriate) and comp time owed to them, prior to the agreed separation date (as agreed with the employees immediate supervisor/manager). 6. In exchange and in consideration for the promises, obligations and agreements of the employer contained herein, which the employee agrees and acknowledges are adequate and sufficient consideration, the employee hereby releases and forever discharges the employer from any and all know or unknown actions, causes of action, claims or liabilities of any kind that have been or could be asserted against the employer arising out of or related to his/her employment with and/or separation from employment with the employer or any other incidents occurring up to and including the date of separation. 7. The employee understands that is not eligible to be hired into any position with the Cayman Islands Civil Service for a period of five (5) years after the agreed separation date, and agrees not to apply for such employment during this period. Both parties acknowledge that no promises of future employment have been made to the employee by the Civil Service Entity. 8. Nothing within this agreement constitutes or shall be interpreted as an admission of any wrongdoing or liability on the part of the Civil Service Entity or the employee. 9. At a reasonable date prior to the agreed separation date, the employee shall deliver to supervising officer all documents and other Government property to which has had access or issued or entrusted to him, including an identity card, dye, seal or stamp of, provided by Government. 10. If any clause or term of this agreement should be invalid, unenforceable or illegal, then the remaining terms and provisions of this agreement shall be deemed to be severable there from and shall continue in full force and effect unless such invalidity, unenforceability or illegality goes to the root of this agreement. 11. This agreement supersedes all previous contracts or agreements, written or otherwise, between the parties. 12. The employee further agrees that if he/she breaches the terms of this Agreement the employer will be entitled to all reasonable cost and expenses including attorney’s fees incurred in enforcing the terms of this Agreement and the employee will be obligated upon demand to repay to the employer all of the amounts paid or made available to under this Agreement. 13. The employee further agrees that he/she will keep confidential all terms of this Agreement, including but not limited to the amount(s) and other specifics of the separation package discussed herein, as well as any proprietary information of the employer. 14. Period to consider this agreement a. The Civil Service Entity acknowledges that the employee has been given twelve (12) calendar days to consider whether to agree to this agreement and understands that may use all of this time to consider whether to sign the agreement. The date by which the employee has to sign this agreement (“deadline date”) is . b. The Civil Service Entity acknowledges that the employee has a further four (4) calendar days (from the date of them signing this agreement) to change mind and revoke this agreement by delivering a signed and dated statement of revocation to the Chief Officer via hand delivery () or electronic mail (). c. The agreement shall become effective the day following the 7th calendar day after the employee signs this agreement, where the agreement has not been revoked as set out in subsection 14(b) above. All parties acknowledge that they have read the Cayman Island Government Voluntary Separation Policy (dated 3rd October 2013) and this three (3) page Voluntary Separation Agreement in its entirety and understands all of its terms. All parties agree to the terms contained within this agreement. EMPLOYEE ________________________________________________________________________________ PRINTED NAME __________________________________________________ ___________________________ SIGNATURE DATE ON BEHALF OF THE CIVIL SERVICE ENTITY ________________________________________________________________________________ PRINTED NAME __________________________________________________ ___________________________ SIGNATURE DATE Appendix 3 VOLUNTARY SEPARATION PROCESS – FLOW CHART Key dates Thurs 3rd Oct Policy published/communicated By Thurs 31st Oct Deadline for Employee applications for Voluntary Separation (VS) to Chief Officers (COs) By Thurs 14th Nov COs decide which VS applications they can support, and which they cannot Support Do not support – Employee Informed & Process Ends By Monday 18th Nov COs submit supported applications to Voluntary Separation Committee (VSC) Meeting dates: 21st & 22nd Nov VSC commences meetings to decide which applications are to progress to VS, and which are not Progress Not Progress – Employee Informed & Process Ends By Wednesday 27th Nov VSC draws up Voluntary Separation Agreements (VSA) & pass to applicants – providing them with 12 calendar days to sign or decline By Mon 9th Dec Applicants sign or decline the VSA. Where sign, given 4 days to change their mind. Sign Decline or miss deadline –Process Ends By Fri 13th Dec Do not change mind Change mind Process Ends VOLUNTARY SEPARATION DATE CONFIRMED VS compensation paid to coincide with date of Actual Separation
Posted on: Mon, 07 Oct 2013 21:26:47 +0000
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