Free policy template · Word

Separation Policy

A separation policy defines the different ways employment can end — resignation, termination, retrenchment, retirement, end of fixed-term contract, death or incapacity — and the rules for each: notice period, pay in lieu of notice, early release, withdrawal of resignation and retirement age. The exit process itself is covered in the employee exit policy.

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[Company Logo][Company Name]

SEPARATION POLICY

Policy No.:: [Reference Number]
Version:: [Version Number]
Effective Date:: [Date]
Policy Owner:: Human Resources

1. Purpose

This policy sets out the types of separation from [Company Name] and the rules that apply to each, so that every separation is handled fairly, consistently and in compliance with law.

2. Scope

It applies to all employees. The exit process — clearance, handover, exit interview and full and final settlement — is covered by the Employee Exit Policy.

3. Definitions

Resignation: voluntary separation initiated by the employee.
Termination: separation initiated by the company, either for misconduct after due process or with notice as per contract and law.
Retrenchment: termination for reasons other than misconduct, such as surplus staff, subject to legal conditions.
Retirement: separation on reaching the retirement age of [Number] years.
End of contract: completion of a fixed-term engagement.

4. Policy

Status / Grade	Notice by Employee	Notice by Company
Probationer	[Number] days	[Number] days
Confirmed – [Grade]	[Notice Period]	[Notice Period]
Confirmed – [Grade]	[Notice Period]	[Notice Period]

Resignation must be submitted in writing or through [HRMS]. The notice period starts from the date of submission.
The company may waive part of the notice or accept pay in lieu of notice equal to [Basic Salary / gross salary] for the shortfall.
Leave [may / may not] be adjusted against the notice period.
A resignation may be withdrawn only before acceptance, or later with the company's written consent.
Termination for misconduct follows the Disciplinary Policy. Termination with notice will state the reason and be issued by [Authorised Signatory].
Retrenchment and closure follow the procedure, notice and compensation required by law.
Employees retire at the end of the month in which they reach [Number] years of age. Re-engagement on contract may be offered on business need.
Fixed-term employment ends on the contract end date unless renewed in writing; statutory benefits apply as per law.
In case of death in service, dues are paid to the registered nominee or legal heirs promptly.

5. Procedure

Manager discusses the resignation with the employee within [Number] working days.
HR issues an acceptance letter confirming the Last Working Day.
For company-initiated separation, HR verifies compliance with law and policy before issuing the letter.
The Employee Exit Policy process starts on acceptance.

6. Responsibilities

Employees: give proper notice and complete handover.
Managers: discuss, accept and plan transition.
HR: letters, compliance and records.

7. Non-compliance

Leaving without serving notice or paying in lieu may result in recovery of notice pay as permitted by law and contract, and remarks in the experience letter limited to facts.

8. Review & Approval

HR will review this policy annually.

Prepared by
[HR Name]
Human Resources

Approved by
[Authorised Signatory]
[Designation]
Date: [Date]

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What this template includes

Types of separation with definitions
Notice period by grade and status
Pay in lieu of notice and early release
Withdrawal of resignation
Retirement age and re-engagement
Retrenchment and closure compliance reference

When to use it

Employees ask whether they can buy out their notice period
Deciding a retirement age and extension rules
Handling resignations withdrawn after acceptance
Clarifying termination for cause vs termination with notice

How to customise this template

1Fill the notice period table
2Set retirement age and extension rules
3Decide whether leave can be adjusted against notice
4Name who accepts resignations at each grade
5Add garden leave rules for sensitive roles

HR tips

Acknowledge resignations in writing with the Last Working Day
Do not hold back relieving letters to force notice compliance — settle dues fairly
For retrenchment, follow legal procedures carefully
Keep resignation and acceptance emails on file

Termination, retrenchment and closure are regulated by the Labour Codes, standing orders and state rules. Review this template and every termination case with a legal adviser.

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Frequently asked questions

Can a company refuse to accept a resignation?+

An employer generally cannot force someone to keep working, but can require the notice period in the contract to be served or paid in lieu, and complete handover.

Can earned leave be adjusted against notice period?+

Only if the policy or the employer allows it. Many companies do not permit leave adjustment during notice and instead encash eligible leave in the full and final settlement.

What is garden leave?+

Garden leave is when an employee serving notice is asked to stay away from work while still being paid, often to protect confidential information in sensitive roles.

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[Company Logo][Company Name]
HR POLICY MANUAL
Company:
[Company Name]
Document No.:
[Reference Number]
Version:
[Version Number]
Effective Date:
[Date]
Policy Owner:
[HR Name], Human Resources
Approved By:
[Authorised Signatory]
Chapter 1: Introduction
1.1 Purpose: This manual sets out the human resource policies, procedures and practices of [Company Name] so that employees are treated fairly and consistently and the company complies with applicable labour laws.
1.2 Scope: It applies to all employees on the company's rolls at all offices, plants and sites, including [Work Location]. Consultants, trainees and contract workers are covered where expressly stated.
1.3 Precedence: Where this manual conflicts with any law, certified standing order or individual appointment letter, the law and then the more favourable term for the employee will apply.
Chapter 2: Definitions
- Company: [Company Name] and its branches.
- Employee: any person employed on the company's rolls on a permanent, probationary or fixed-term basis.
- Reporting Manager: the person to whom an employee reports as per the organisation chart.
- HR: the Human Resources department or the person designated to perform the HR function.
- Wages / Basic Salary: as defined in the employee's appointment letter and applicable law.
Chapter 3: Employment
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Version:
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Effective Date:
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Policy Owner:
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