Those entitled to severance pay are defined by law. Workers who must leave their long-term jobs due to force majeure may initially feel uncertain about claiming compensation. Although that apprehension can make it hard to assert your rights, you should know that the law supports you in this matter. If you are dissatisfied with your workplace or your job, you may be eligible for severance pay when you leave.
Employees who resign follow certain procedures. When a worker resigns voluntarily, the question of severance pay arises. Severance pay serves as a form of protection paid to employees when their employment ends. When an employment contract is terminated in line with legal provisions, the employee may clearly be entitled to severance pay. This practice ensures workers receive compensation for their labor and helps protect labor rights.
Anyone who has worked at the same workplace for at least one year becomes eligible for severance pay under current labor laws. Severance pay is broadly designed to protect employees and provide preliminary security against possible consequences at the end of employment.
How Are the Conditions for Entitlement to Severance Pay Determined?
People whose employment contracts end for various reasons want to know how they qualify for severance. Entitlement to severance pay is clearly defined by the relevant legal provisions. Under this framework, those whose periods of service end are eligible to receive severance pay. The amount represents compensation owed for years of service and wear-and-tear accumulated during employment.
There are several statutory conditions for claiming severance pay. All individuals meeting these conditions are legally entitled to compensation. The most important requirement is having worked at the same workplace for one year or longer. Employees with less than one year of service are not eligible. In addition, the employment must have been under an indefinite-term contract.
Workers on fixed-term contracts are generally not entitled to severance pay, though there are exceptions. If the workplace is relocated or goes bankrupt, employees may still have a right to severance. When entitlement arises, employers must pay severance within the prescribed period; otherwise, employees may file suit against the employer.
In Which Situations Must an Employer Pay Severance Pay?
Payment of severance pay depends on certain criteria. Those who do not meet these requirements will not receive severance at the end of their service, and they typically cannot bring claims for it. The situations where severance must be paid are specified in the labor law. Employers must make the required payments at the end of employment for those covered by the law. The amount depends on the employee’s length of service and the wages received.
The following cases typically require employers to pay severance:
- The employer unlawfully terminates the employment contract
- After termination, the employer has abused the employee’s workplace rights or caused a work stoppage through misconduct
- Male employees who leave to perform mandatory military service before completing it
- Employees who end employment after reaching retirement age
- Employees who have qualified for retirement by meeting required premiums and days, even if they have not yet formally retired
- Female employees who voluntarily resign within the first year after marriage
If a worker dies, any accrued entitlement to severance pay passes to their heirs.
How Is Severance Pay Calculated?
Severance pay is calculated based on each year of service. For each year worked, roughly 30 days of gross salary are counted. When calculating severance, the worker’s most recent salary is taken into account. Several additional compensation items should also be included in the severance base.
Common items added to the severance calculation include:
- Family allowance payments
- Child allowance payments, varying with the number of children
- Payments made for children’s education
- Health allowances paid for the employee or family members
- Social assistance considered under social support programs
- Housing allowances, such as rent support
- Fuel or heating assistance
- Meal or transportation expense reimbursements
- Grocery or market support
All these items influence the severance amount. Regular bonuses and allowances traditionally included as part of wages are also factored into the calculation. One-off payments that do not recur are generally excluded from the severance base.
Paid severance cannot exceed the statutory severance ceiling established by the state. To ensure you receive the full amount you’re entitled to, consider consulting a qualified attorney who specializes in labor law.
Can Employees Who Resign Voluntarily Receive Severance Pay?
Employees who leave voluntarily can receive severance pay only if certain conditions are met. If these conditions are not satisfied, severance will not be paid.
Grounds that may allow a voluntarily resigning employee to claim severance include:
- The work itself endangers the employee’s health or safety
- The employee contracts a sudden, contagious illness
- The employer gave misleading information during hiring
- The employer made insulting remarks harming the employee’s or their family’s honor
- The employer subjected the employee to verbal or sexual harassment
- The employer pressured employees into illegal activities
- The employer falsely accuses or encourages criminal behavior
- The employee is sexually harassed by a colleague and the employer fails to take necessary measures
- The employee is not compensated for overtime or holiday work
If the employment contract is terminated under these conditions, the employee may be entitled to severance pay after leaving the job.
What Is the Statute of Limitations for Severance Pay Claims?
Severance payments must be made within statutory time limits. Severance claims not pursued within these periods may expire. The limitation period varies depending on when the employment contract was terminated. The limitation period is counted from the date the entitlement arises. In general, the statute of limitations for severance pay claims is five years under the law.
The five-year period begins from the date the employment contract is terminated. If the employee does not claim severance within those five years, the right to claim is typically lost. Therefore, once entitlement is established, the employee should assert it within five years.
Is Legal Representation Necessary in Severance Pay Lawsuits?
In practice, many employers report wages at the minimum level for social security and payroll purposes. Even if the employee’s true salary is higher, some employers declare the wage as the legal minimum. Reporting wages and social security contributions at the minimum can lower the apparent salary, which affects severance calculations and may reduce the amount due.
Legal assistance in severance pay cases is often essential to prevent loss of rights. To ensure correct calculation and protection of your entitlements, seeking help from an experienced labor attorney is advisable.