Asia
 
JAPAN: Severance Practice Pulse Report
 
More Japanese Companies Choose Voluntary Programmes Over Outright Dismissals Amidst A Slowing Economy: Aon Pulse Survey
According to Aon’s study of 75 companies in Japan, 15% have cut down their workforce as on August 31, 2020. Most have chosen various kinds of Voluntary Redundancy programmes over Designated Terminations with outright dismissals the least popular option. However, the workforce reduction programmes instituted by companies differ significantly by severance pay, benefits and other perquisites.
In Aon’s recent report, only one among the 75 participating companies opted for dismissal for the purposes of downsizing. This underscores that programmes that require mutual agreement between the company and its employees are still much more prevalent than outright dismissals.
All participating companies reported that they pay severance to their employees in the Voluntary Redundancy programmes. Each programme’s benefits have their own unique feature; however, the benefit levels for Voluntary Redundancy remain higher than that of Designated Termination. Companies use different methods to calculate the severance packages for Voluntary Redundancy and Designated Termination programmes..
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