Quits due to plant closing: Does he get severance pay?

By Raymond Dreyfack -- Plant Engineering, 4/1/1998

Although it was no big surprise, the announcement of management's decision to shut down the plant 3-mo hence was a hard dish for employees to swallow.

A week later George Riley, a carpenter, appeared at Maintenance Supervisor Frank Talcott's desk and gave notice as of the end of the week.

"Please arrange for me to get my final check for time worked, severance pay, and other entitlements."

"Your leaving abruptly like this will put the department in a spot," Talcott replied.

"I can't help that. I've got a family to support; they come first."

"Okay, if that's the way you want it. I can't stop you from leaving, but you'll lose your separation pay."

"No way!" Riley protested. "Separation pay in the event of a plant closing is specified in the labor agreement."

"Not if you resign prematurely."

The worker disagreed and threatened to sue.

Question: What do you think? Is Riley entitled to the separation pay?

Berger's decision: "Riley is right on the one hand," Plant Engineer Murray Berger told Tolcott, "but wrong on the other. Terminated employees are entitled to separation pay, according to the contract, but only under the proviso that they stay on until the bitter end. When a plant shuts down more is involved than simply closing the doors. There's final business to transact, windup obligations to meet. Unfortunate as it may be in some cases, that proviso can be an important clause to include in the labor agreement."