The rules on severance pay in detail

Statutory severance is paid in a limited number of circumstances, defined by statute. The payment is based on the number of ‘average monthly salaries’ or ‘minimal salary’ to be paid and the average monthly salary is calculated based on the last two months’ fixed salary plus all bonuses. The minimal salary is set by the Government.
 
The amount of statutory severance pay is as follows:

  • one average month’s salary in cases of redundancy, layoff or refusal to work under changed work conditions;
  • two minimal salaries in the case of an employee’s conscription to the army;
  • three average months’ salary in the case of an employee’s dismissal owing to the employer’s breach of labour law, the employment contract or the collective bargaining agreement;
  • six average months’ salary in the case of a corporate officer’s dismissal without reasons given.

Employers sometimes also provide contractual redundancy pay schemes that offer more generous payments than those provided by law.

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Author: Vasil Kisil & Partners

Date: December 2019