AFB End of Contract Allowances
This section discusses:
Severance allowance entitlement.
Severance allowance calculation.
Seniority and 2002.
When a payee's contract is terminated prematurely for a nondisciplinary or economic reason (that is, the payee is laid off), the payee is entitled to a severance allowance as defined by the collective agreement. The allowance is paid in one sum and depends on various conditions, such as term of service and the reason for the layoff. The allowance amount depends on the salary base, years of service, and the payee's category.
Payees dismissed for disciplinary reasons, including those sentenced in court, receive the statutory allowance defined by the government because this is more favorable than the allowance defined by the collective agreement.
The severance allowance for a nondisciplinary or economic reasons is calculated by the earning IND LIC AFB.
The bracket AFB BR IND LIC returns values used to calculate the severance allowance. Entitlement to this allowance depends on the reason for a payee's termination. Although there are many reason codes defined in the HR application, only two confer entitlement to severance pay in the delivered bracket: INS (severance for insubordination) and RED (severance for staff reduction). If you want to add additional entitlement reasons, include the corresponding reason codes in this bracket.
The retirement allowance IND LIC AFB is triggered by the generation control element AFB GC IND LIC CC. This generation control element contains the actions or reasons that entitle a payee to the retirement allowance. The reasons listed in this generation control element must be the same as the reasons used as search keys in the bracket AFB BR IND LIC.
You must maintain the generation control element by populating it with whatever actions or reasons are required.
Severance Allowance for Nondisciplinary Dismissal
|
Managers |
Technicians |
|
|---|---|---|
|
Seniority required. |
The payee must have one year of seniority to have severance allowance. |
Same as managers. |
|
Base for calculation. |
Base = 1/13 of the annual basic salary the payee had or would have had during the last 12 months. |
Same as managers. |
|
Semester calculation. |
The entitlements must be calculated for two periods as follows: The semester must be complete. From 15/09/2002 to 15/03/2003 is a complete semester. From 16/09/2002 to 15/03/2003 is not a complete semester. In case of unpaid absences, the length of service must be reduced for the corresponding calendar days. If the semester goes past 01/01/2002, the semester is a complete semester, and the corresponding allowance is calculated in two parts: the part corresponding to the period before 01/01/2002 and the part from 01/01/2002 and onward. |
Same as managers. |
|
Semester completed before 01/01/2002. |
½ x (13/14,50) for each semester completed before this date. This value is retrieved by the variable AFB VR TX LIC < 02. |
Same as managers. |
|
Semester completed after 01/01/2002. |
1/5 for each semester completed starting from this date. This value is retrieved by the variable AFB VR TX LIC > O2. |
Same as managers. |
|
Ceilings. |
The ceiling is the upper limit for the two-semester sum; the ceiling varies with the hire date. In case of part-time periods, the ceiling is calculated in proportion to the time worked. |
Same as managers. |
|
Hired before 12/31/1999. |
24 x (13 / 14,50) = 21,51724 This value is retrieved by the variable AFB VR LIMIT CADR. |
18 x (13 / 14,50) = 16,13793 This value is retrieved by the variable AFB VR LIMIT TECH. |
|
Hired from 01/01/2000. |
15 This value is retrieved by the variable AFB VR LIMIT > O2. |
Same as managers. |
|
Severance allowance amount. |
Base for calculation x semester number. Part-time periods must be included in the calculation. Part-time periods must be considered before 01/01/2002 and from 01/01/2002 and onward. |
Same as managers. |
The payee classification—manager or technician—triggers the correct ceiling for severance allowances paid before 2002. The formula SIT FM CLASSIF AFB stores the value 0 if the payee is a technician and 1 if the payee is a manager. Because PeopleSoft does not know how and where companies store the payee's category, you must update the formula.
Severance Allowance in Case of (Economic) Redundancy
|
Managers |
Technicians |
|
|---|---|---|
|
Seniority required. |
The payee must have one year of seniority to receive severance allowance. |
Same as managers. |
|
Base for calculation. |
Base = 1/12 of the annual basic salary the payee had or would have had during the last 12 months. In case of an incomplete year, the annual salary must be rebuilt. |
Same as managers. |
|
Semester calculation. |
The entitlements must be calculated for two periods as follows: The semester must be complete. From 15/09/2002 to 15/03/2003 is a complete semester, and from 16/09/2002 to 15/03/2003 is not a complete semester. In case of unpaid absences, the length of service must be reduced for the corresponding calendar days. If a semester goes past 01/01/2002, the semester is a complete semester and the corresponding allowance is calculated in two parts: the part corresponding to the period before 01/01/2002 and the part from 01/01/2002 and onward. |
Same as managers. |
|
Semester completed before 01/01/2002. |
½ x Base for each semester completed before this date. This value is retrieved by the variable AFB VR TX LIC < O2. |
Same as managers. |
|
Semester completed after 01/01/2002. |
¼ x Base x Base for each semester completed starting from this date. This value is retrieved by the variable AFB VR TX LIC > O2. |
Same as managers. |
|
Ceilings. |
The ceiling is the upper limit for the two-semester sum; the ceiling varies with the hire date. In case of part-time periods, the ceiling is calculated in proportion to the time worked. |
Same as managers. |
|
Hired before 12/31/1999. |
24 This value is retrieved by the variable AFB VR LIMIT CADR. |
18 This value is retrieved by the variable AFB VR LIMIT TECH. |
|
Hired from 01/01/2000. |
18 This value is retrieved by the variable AFB VR LIMIT > O2. |
Same as managers. |
|
Severance allowance amount. |
Base for calculation x semester number. Part-time periods must be included in the calculation. Part-time periods must be considered before 01/01/2002 and from 01/01/2002 and onward. |
Same as managers. |
The payee classification—manager or technician—triggers the correct ceiling for severance allowances paid before 2002. The formula SIT FM CLASSIF AFB stores the value 0 if the payee is a technician and 1 if the payee is a manager. Because PeopleSoft does not know how and where companies store the payee's category, you must update the formula.
Bracket for AFB Labor Agreement Severance Allowance
The search key in the bracket AFB BR IND LIC is GEN VR MOTIF (severance reason), and the return column elements are the bracket AFB BR IND LIC and the variables AFB VR LIMIT TECH, AFB VR LIMIT CADR, AFB VR LIMIT > 02, AFB VR TX LIC < 02, AFB VR TX LIC > 02, and GEN VR IND LIC CC.
|
Element Name |
Usage |
|---|---|
|
AFB VR LIMIT TECH |
Stores the entitlement limit used in the severance allowance calculation for banking technicians. |
|
AFB VR LIMIT CADR |
Stores the entitlement limit used in the severance allowance calculation for banking managers. |
|
AFB VR LIMIT > 02 |
Stores the entitlement limit for all payee categories after 2002. |
|
AFB VR TX LIC < 02 |
Stores the rate used to calculate the severance allowance before 2002. |
|
AFB VR TX LIC > 02 |
Stores the rate used to calculate the severance allowance after 2002. |
|
AFB BR IND LIC |
Stores the multiplier applied to the annual salary (1 for a nondisciplinary reason and 13/12 for an economic reason). |
|
GEN VR IND LIC CC |
Stores an indicator with the value of 1 if the severance allowance defined by the collective agreement is resolved. This variable is checked to avoid the payment of the legal severance allowance if the labor agreement severance allowance has already been paid. |
|
GEN VR MOTIF (Key) |
AFB BR IND LIC (Return) |
AFB VR LIMIT TECH (Variable) |
AFB VR LIMIT CADR (Variable) |
AFB VR LIMIT > 02 (Variable) |
AFB VR TX LIC < 02 (Variable) |
AFB VR TX LIC > 02 (Variable) |
GEN VR IND LIC CC (Variable) |
|---|---|---|---|---|---|---|---|
|
INS |
1 |
21,517241 |
16,137931 |
15 |
0,448275 |
0,2 |
1 |
|
RED |
1,083333 |
24 |
18 |
18 |
0,5 |
0,25 |
1 |
It is important that you understand the definition of this bracket because PeopleSoft delivers, but does not maintain, it. You must maintain this bracket to ensure that it functions properly.
If your organization applies the AFB collective agreement, use the sample values in this bracket and in the AFB BR IND DEP RET bracket to manage severance and retirement allowances. If you have a collective agreement other than AFB, don't use these brackets.
If you are applying the AFB collective agreement, and the agreement uses different values to calculate the allowance, you may need to change the parameters of the brackets, but you do not need to create any new brackets for this allowance.
Note: If you use the AFB BR IND LIC bracket, make sure that the return column variable GEN VR IND LIC CC is set to 1. This variable tells the system that the allowances are being calculated using a labor agreement bracket and should not be calculated again based on the legal setup.
The entitlement used to calculate severance allowance changed in 2002. The previous seniority values were frozen at the end of 2001, so the formula containing payee classifications automatically switched to a new effective date and calculated the new entitlements when the changes were introduced.
The HR files do not tell you if a person is classified as a technician or a manager. The formula SIT FM CLASSIF AFB stores the value 0 if the payee is a technician and 1 if the payee is a manager.
Note: The system used the formula SIT FM CLASSIF AFB until the end of 2001, and currently uses the formula for retro calculations. For calculating allowances in 2002 and onwards, the system does not use this formula.
You must maintain this formula, which needs to be populated so that it can retrieve a value for the payee's category. By default, the value in the formula is set to 0. This means that if the formula is not updated, it retrieves values for technicians only.