The rules on severance pay in detail

Russian law provides for different types of severance payment depending on grounds for dismissal. It sets out the following procedure for severance in cases of redundancy: 

  • severance of one month’s average salary (to be paid on the last day of employment);
  • severance of 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;
  • severance of one month’s average salary to be paid when an employee fails to find another job within three months of dismissal, provided that s/he 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.

Under Russian law, 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).

The severance payment is two-weeks’ average salary for employees 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 employee may also be paid severance for termination by mutual agreement. The amount of this is at the discretion of the employer and the employee.

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.

Employees are also entitled to be paid the following on their last day of employment: (1) salary for time worked; (2) compensation for holiday accrued but unused; (3) any other payments specified in the employment contract or the company’s local policies (if any).

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Author: ALRUD

Date: December 2018