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In series finale of The Office, Jim and Pam are about to quit their jobs in Scranton to move to Philadelphia.

As they are about to quit, their manager, Dwight, fires them, and tells them that they will be paid severance.

Assuming that their severance payments are provided for in their contract, is Dwight likely to be successful in terminating them in this manner in order to pay them severance? Would the company be likely to succeed in a suit for costs against Dwight?

  • Probably happens all the time – Dale M Aug 7 '15 at 9:50
  • I don't understand what is meant by "Assuming that their severance payments are provided for in their contract, is this likely to be successful? " Is the question if someone will accept money for termination? – user662852 Aug 7 '15 at 18:20
  • @user I'm not familiar with US or PA labour law, so I don't know if severance is provided for statutorily or by their employment contract. But I can see how that wording is unclear. – jimsug Aug 7 '15 at 21:53
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    This all seems like an HR policy and process question. Can the line manager unilaterally reduce headcount without HR oversight? If they can, presumably the severance shows up in his department financials and his performance accurately captured. If they can't, then this just makes for cute TV. Unless there's a kickback from there terminated to the manager it's hard to see it as anything other than a routine decision. – user662852 Aug 8 '15 at 15:47
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In the U.S. severance payments are not provided for statutorily, and are rarely made when an employee quits or is fired for cause. However, even when not provided for within contracts it is common to see voluntary severances paid during lay-offs.

Furthermore, in the U.S. it is more likely that they would be "laid off" in order to qualify for unemployment insurance. In Pennsylvania one can make claims on the state-run unemployment insurance system only if one is able to work and does not refuse suitable work when offered. If one quits one is not eligible for these payments.

Ultimately unemployment claims are born by the employer (since their legally-mandated unemployment insurance premiums are adjusted based on realized claims).

So managers with the authority to layoff employees can impose real costs on their companies, both in terms of direct severance payments (which may be optional), and in terms of the inflated unemployment premiums that will hit the company down the road. However, I have never heard of a company attempting to recoup such costs from managers, since such decisions are specifically delegated to managers with hiring/firing authority. It seems much more likely that a manager deemed to have abused the company's purse would be demoted or fired rather than being sued, unless there were some gross fraud involved (e.g., kickbacks).

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