International Separation and Severance Scenario

International Separation and Severance Scenario

The organization that employs you as an HRM professional is planning to execute a separation of a long-term employee. The company has an employee manual in the United States, and of course, there is a labor code in the nation of Panama where the medical products production lab that supports the company is located. The human resources director in the company headquarters wants to execute severance pay based on the guidelines of the company’s U.S. employee manual, which has no relationship with the Panamanian labor code, in large part because the company’s employee manual used by the operation in Panama has no discussion of severance. The Panamanian labor code’s guidance is very different regarding severance with respect to direct payments, how they should be distributed, how benefits should be maintained and for how long, as well as a number of other areas, including leave and access to perquisites. The organizational member whose separation is pending is a very senior manager. The HRM specialist from the host nation disagrees with the headquarters’ recommendation. You are the HRM manager in the United States and supervise the HRM office in Panama.

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For this discussion, respond to the following:
•What advice should you provide the human resources director about the best course of action with respect to this severance action?
•What points would you make in support of your recommendation?