If an employee is dismissed for unjust reasons, they have the right to file a lawsuit. After obtaining the required documents from the Social Security Institution and the workplace, if the employee takes the case to court and wins, the employer must reinstate the employee. If the employer refuses to reinstate the employee, they must pay compensation for not rehiring.
From the moment the court’s written decision confirming the employee’s success in the reinstatement lawsuit is served, the employee has 10 days to request reinstatement from the employer. Once the request reaches the employer, the employer must reinstate the employee within one month at the latest. Whether the employer accepts reinstatement immediately or delays it, they are legally required to compensate the employee for lost wages for up to four months to remedy the employee’s hardship. In addition, the employer remains responsible for paying ancillary benefits and making required legal notifications.
How Is Compensation for Failure to Rehire Determined?
If an employer does not reinstate a worker, a judge will determine compensation for the period the worker remained unemployed, measured in months, based on comparable wages and taking into account the reason for dismissal and the worker’s seniority. This failure-to-rehire compensation typically ranges from four to eight months’ pay as determined by the court.
The term “comparable wage” refers to the salary paid to another employee who performs the same job, works for the same employer, and holds similar skills, qualifications and job title. In other words, the comparable wage is the pay of someone in a substantially similar position.
When an employer receives notice of a decision requiring reinstatement but opts not to reinstate, the employer must calculate the compensation using the comparable wage that was applicable at the date the refusal was notified. The failure-to-rehire compensation is based on this comparable wage; additional payments and fringe benefits are not included in the base amount used for the calculation.
Failure-to-rehire compensation is subject to stamp duty.
From the moment the worker wins the reinstatement lawsuit, they become entitled to failure-to-rehire compensation. If the employer chooses not to reinstate the worker, the court-ordered number of months’ worth of comparable wage must be paid as compensation. The employer may also voluntarily choose to pay the compensation instead of reinstating the employee, in which case the employee will need to seek new employment.