The rules on severance pay in detail

Employees are entitled to a severance payment of two weeks’ average salary if they are dismissed for the following reasons:

  • the employee’s refusal to be transferred to another job, as required for health reasons;
  • the employee has been called for military service;
  • reinstatement of someone who used to do the same job;
  • the employee’s refusal to be transferred to a job at another location with the employer;
  • the fact that the employee can no longer do the job for health reasons;
  • the employee’s refusal to continue working because of amendments to the employment contract.

The average salary is calculated on the basis of all payments made to the employee over the past 12 months (e.g. salary, bonuses, compensation and other benefits).

Employees are entitled to the following severance payments in cases of redundancy or closure of the organisation: 

  • one month’s average salary (to be paid on the last day of employment);
  • one month’s average salary for the period of employee’s placement, to be paid at the end of the second month following the dismissal;
  • one month’s average salary to be paid when an employee fails to find another job within three months of dismissal, provided that he or she was registered with an employment centre within two weeks of the date of dismissal.

Russian law allows for the termination of the employment contract for staff redundancy before the end of a two-month notice period. In this case, the employee is entitled to an additional payment of one month’s average salary, prorated based on the time left until the end of the notice period.

Some categories of employees are entitled to severance for early termination of employment. For example, the general manager of a company is eligible for three months’ average salary, unless the employment contract provides otherwise.

Employment contracts, internal policies of the employer or collective bargaining agreements (if any) may provide for the payment of additional amounts to employees, or for the making of higher payments. In addition, it is possible for employers to offer contractual redundancy schemes, but this is rare in practice.

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Author: ALRUD

Date: December 2019