We have discussed the idea of avoiding dispute during dissolution procedures. We suggested you to hold an open meeting with all employees if possible, to announce the dissolution decision and your lay-off plans.
You would also have to decide a sound amount of severance payment for those employees whose employment would be terminated soon. This amount should not be too low or too high. The regulatory severance compensation should be one-month average monthly salary of preceding 12 months for one year employment, for employment under six months, the compensation will amount to half of the foregoing monthly salary. It is recommended to terminate employment with the employee through mutual agreement and to offer a preferred compensation, for example the regulatory compensation plus additional one month salary, in order to reach amicable termination agreement with the employees.
On the one hand, if the amount of severance payment is too low, it would easily cause dissatisfactory of those upset employees. On the other hand, some awkward occasions did take place when the severance payment gets sky high. We have seen the drama case where the remaining personnel voluntarily demanded to be laid off in pursuit of the unusual and large amount of compensation (N+4 or even more).
Besides, do not “raid” your employees’ rights to make them feel being kicked out off their offices. Once there was a company presenting their notice of lay-off plan to their employees in the early morning and forced them to sign the employment termination agreements in the afternoon of the same day. This kind of “morning alert” will definitely induce chaos to the company.
It is also inappropriate to arrange secret meetings with employees to negotiate severance compensation individually, as it would cause them doubting whether they get the equal amount or not.
The worst thing we have ever seen was a company trying to find out employees’ misconduct or negligence while it was planning for the lay-off things to pursue the reasonable grounds for unilaterally termination in order to avoid paying any severance compensation. The company thought itself smart enough, but it was really a mean strategy. It would easily make the employees dissatisfied and discontented even if they did have bad records during their employment.
Sometimes, even if the company has offered reasonable amount for compensating the employees, there would still be protest or dissatisfactory. Apart from obeying the statutory requirements, you should also tell truth and show your kindness to those vulnerable employees.