In Pakistan, “Golden Handshake” refers to a severance package offered to employees, often as part of a Voluntary Separation Scheme (VSS), to encourage them to leave an organization. This is typically done for various reasons, including:
* Downsizing and restructuring: Companies and government departments use it to reduce their workforce and cut costs, especially for surplus or redundant employees.
* Improving efficiency: By offering a golden handshake, organizations aim to streamline operations and retain only the most efficient staff.
* Government policy: The government may introduce such schemes to reduce pension liabilities or align the civil bureaucracy with more efficient models.
Who is typically eligible for a Golden Handshake in Pakistan?
While specific criteria can vary depending on the organization and the scheme offered, some common patterns emerge:
* Public Sector Employees: Government departments and public sector entities often implement Golden Handshake schemes. For example, the Pakistan Medical and Dental Council (PMDC) and Pakistan International Airlines (PIA) have offered such schemes to their permanent staff. The government is also reportedly planning to offer golden handshakes to “surplus” federal government employees as part of an IMF plan to reduce the size of the government.
* Employees of organizations undergoing privatization or restructuring: Companies like PTCL have offered VSS packages during their restructuring phases.
* Employees meeting certain service and age criteria: Schemes often have stipulations regarding minimum years of service and sometimes age limits. For instance, a past PMDC scheme was offered to employees less than 55 years of age with 10 years or more of service.
* Voluntary participants: Most golden handshake schemes are voluntary, meaning employees choose to accept the offer. However, in some cases, a “compulsory golden handshake” might be applicable if an employee’s services are no longer required and they didn’t opt for the voluntary scheme.
Key characteristics of Golden Handshake schemes in Pakistan often include:
* Financial incentives: This is the core of the golden handshake, providing a lump sum payment, which may include benefits like double commutation of pension, leave encashment, a welfare grant (e.g., equivalent to one year’s salary), and provident fund contributions.
* Early retirement: It allows employees to retire before their official retirement age.
* Voluntary or sometimes compulsory: While usually voluntary, some situations may involve a compulsory aspect for certain employees.
It’s important to note that the specifics of a Golden Handshake package, including eligibility and benefits, are determined by the organization offering it and any relevant government policies or acts.