Under section 20 of the Industrial Relations Act, a Company must show “just cause and excuse” before terminating an employee. Put simply, the company in sacking a staff must do so fairly and on honest grounds.
Even when the Company’s business is not doing well it must still treat the employee fairly before dismissing him under a retrenchment scheme.
The retrenchment must be justified on the grounds that company is economically unable to employ the staff and not because of other unrelated reasons.
Voluntary Separation Scheme ( VSS ) is a way for a company to get rid of unwanted or excess staff without being accused of being discriminatory or unfair.
In essence a Mutual Separation Scheme ( MSS ) achieves the same thing.
They both act as proof that the employees have agreed on their own free will to be compensated for leaving.
By their very terms “ Voluntary “ and “ Mutual” the difference in procedures are based on:
In VSS the Employers set the terms and conditions and invite Employees to make an offer ( ie whether they want to accept the lay off package)
In MSS the Employers select the employees they wish to lay off and then invite the selected Employees to name their terms and conditions
Whichever method you as an employer use is meant to bring about the result that employees made redundant cannot complain that they have been victimised