Severance payments: who is entitled to receive them

Severance pay is an essential guarantee from the state, which provides financial support for employees in cases specified by law, collective agreements, or by agreement of the parties. The details of this norm are contained in Article 44 of the Labor Code of Ukraine.

This benefit is paid to those who are subject to dismissal at the initiative of the employer, for example, during staff reductions, insufficient qualifications for the position held, or in cases where it is impossible to provide work under the employment contract. This may also include situations where equipment has been lost as a result of military operations. In all these cases, the employer is obliged to pay severance pay. The terms of the collective agreement determine the amount of this payment, but it cannot be less than the average monthly salary.

What payments should an employee receive upon dismissal?

Upon dismissal, an employee must receive:

salary for work performed;
severance pay (if provided for by law);
compensation for unused vacation days;
other additional payments, if any, provided for by the contract.
The salary is paid in proportion to the time worked before the date of dismissal. Severance pay may also be provided to employees who have decided to resign on their own. This financial assistance is designed for the period of searching for a new job and is not related to the quality or volume of information on the performance of duties.

In some cases, severance pay may also be paid at the employee’s request if the terms of the employment contract or the law have been violated. In the case of dismissal by agreement of the parties, the payment of severance pay is not mandatory, but it can be included in the terms of the contract by mutual consent.

The amount of severance pay:

When dismissed for the reasons specified in Article 36 of the Labor Code, not less than one average monthly income.

If the dismissal occurred due to conscription for military or alternative service, not less than two minimum wages.
In situations where labor legislation or the terms of the employment contract have been violated, the amount of payment cannot be less than three average monthly salaries.
When dismissing on other grounds, the amount must not be less than six average monthly earnings.
Compensation for the use of vacations is also taken into account: annual basic, additional, and memorable vacations.

What to do if payments are delayed

Suppose the payment is not provided on the day of dismissal, and there are no disputes between the employer and the employee regarding the amount. In that case, the manager is obliged to pay the employee the average salary for the entire period of delay, until the actual calculation, but not more than six months (clause 117 of the Labor Code of Ukraine).

Payments are usually made at the place of work. If the employee is abroad or cannot be present in person, payment may be made via bank or postal transfer to the specified account or address. All costs associated with the transfer are paid by the employer (with the written consent of the employee). All accruals must be notified to the employee in writing before payment.