Severance Pay Law, 1963
Severance pay: your rights when dismissed
An employee dismissed after one year of continuous work is entitled to severance pay of one monthly salary per year of service. Certain resignations also qualify.
Who qualifies
Employees dismissed after one continuous year, and those who resign due to a material worsening of conditions, relocation, health or childbirth (sections 6–11).
How it is calculated
Last monthly salary × years of service, including partial years. Where Section 14 applies, pension-fund accruals replace the severance payment.
If the employer refuses
Send a written demand, then file a claim in the Regional Labour Court. Late payment can trigger delay compensation.
FAQ
- Is severance due after less than a year?
- Usually not, unless the dismissal was timed to avoid entitlement or the contract says otherwise.
- How long do I have to sue?
- The limitation period for severance claims is seven years.
- Is notice pay part of severance?
- No. Notice pay is a separate statutory payment.