Serverance allowance to the employee

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1- The employee is paid serverance allowance in following case:

a- When the labor contract terminates in the following cases and the employee has worked for a full 12 months or more, the employee shall be paid severance allowance:

- Expiry of the labor contract, except for when an employee who is a part-time trade union representative is still in his/her trade union tenure while his/her labor contract expires, that labor contract must be extended until the end of the trade union tenure.

- The work stated in the labor contract has been completed;

- Both parties agree to terminate the labor contract;

- The employee is sentenced to imprisonment or death or is prohibited from performing the job stated in the labor contract under a legally effective judgment or ruling of a court.

- The employee dies or is decleard by a court to have lost civil act capacity, be missing or dead.

- The individual employer dies or is decleared by a court to have lost civil act capacity, be missing or dead; the institutional employer terminates operation.

- The employee unilaterally terminates the labor contract under Article 37 of Labor Code;

- The employer unilaterally terminates the labor contract under Article 38 of the Labor Code.

b- In case, the employee has worked regularly for full 12 months or longer but losing their jobs due to technological, structural change or economic reasons or a merger, amalgamation, split or separation of enterprises or cooperatives as  specified in Clause 10 Article 36, Article 44 and Article 45 of the Labor Code.

2. Working time for calculating severance allowance, redundancy pay:

Working time serving as the basis for calculating severance allowance, redundancy pay shalll be the total of actual working time subtracting the time when the employees pay unemployment insurance contributions as prescribed by law, and the working time when severance pay is offered by the employer. Of which:

a) The actual  time when employees work for employers shall include the following periods such as time of employee’s working for the employer; probation, internship and apprenticeship that take place at the employer’s enterprise; time of the employer’s sending employees on courses; paid leaves of the insured employees under the provisions of the Law on Social Insurance; weekly days-off in accordance with Article110, fully paid leaves in accordance with the Articles 111, 112,115 and Clause 1 of Article 116 of the Labor Code; time of employee’s staying away from work to join Trade Union activities in accordance with the law on trade unions; time of employee’s quitting or being kept away from work by no fault of the employees; time of employee’s being temporarily suspended, detained or jailed away from work after which the employees are permitted to come back to work on account of the competent authority’s reaching the conclusion that they are not guilty;

b) The time when employees pay for unemployment insurance shall include: the timewhen employers have paid for the unemployment insurance in accordance with the law, and the abovementioned time corresponding to the time when employees are paid a sum of salary equal to such unemployment insurance premiums in accordance with laws; 

c) Working time serving as the basis for calculating severance redundancy paymentsto employees shall be in years (full 12 months)and the period from 01 full month to under 06 months shall be rounded to a half of year; the period from full 06 months to01 year shall be rounded to 1 year.

3- Severance redundancy payments in some special cases shall be prescribed as follows:

a) If the employees who have actually worked for the employers for full 12 months or more are made redundant but working time serving as the basis for calculating the redundancy pay is less than 18 months, the employers shall offer the amount of redundancy pay equal to at least 02 months of salary to the employees ;

b) If employees terminate the employment contract after a merger, amalgamation, split, separation of business or cooperative, employment contract, the employers shall offer severance or redundancy payments for the time when the employees haveworked for them and the time when the employees have worked for the previous employers .

4- Time limit for severance redundancy pay:

Within 07 working days after the date of termination of the employment contracts, the employers shall be responsible for making full payment for severance orredundancy benefits to the employers. Payment period shall be extended but restricted to less than 30 days after the date of termination of the employment contract in one of the following circumstances:

a) The employer is not the person who terminates the employment contract;

b) The employer or the employee suffers from natural disasters, conflagration, hostile acts or infectious diseases;

c) The employer changes their technology, organization structure, or is affected by economic reasons.

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