Financial compensation upon termination: An exploration of how dismissed employees receive their severance pay - Severance Pay: The Way Redundant Workers Receive Their Remuneration
Writing a Great Goodbye: Navigating Severance Packages After Unexpected Job Loss
- by Danny Dynamite
- ⏱️ - 3 Mins.
Unexpected job losses can shake even the most resilient among us. But when the company lets you go, you might find some consolation in a severance package. However, employers rarely volunteer this. Legal aid can help. This is where online legal service providers come in.
Unlike popular belief, employees have no inherent right to monetary compensation upon job loss. Nevertheless, companies often agree to a severance package to skip a lengthy court battle over layoffs. The law only suggests the possibility of a severance package, as Alexander Bourzutschky, labor and social security lawyer at Roedl and Partner, recently explained to CAPITAL, "when the employee waives a dismissal protection lawsuit." However, the amount remains at the discretion of the employer and negotiation is always involved.
The Art of Severance Package Negotiations
The size of the severance package typically follows a rule of thumb: Half a month's salary per year of employment serves as a foundation for discussion. However, your performance and the knowledge you've accumulated about the company can strengthen your position, making the employer more willing to part with extra cash. Moreover, employers may be more inclined to pay more if the dismissal might be revoked in court due to technicalities, but they still want to end the association.
Senior employees may even receive more than average. The Dismissal Protection Act allows up to 15 months' salary as severance pay for dismissed employees aged 50 and above, with 15+ years of service.
Whether you're an ordinary employee or a manager, labor lawyer and entrepreneur Fabian Beulke recommends seeking legal representation for severance package negotiations: "Those who seek legal representation stand a good chance of reaching a fair severance agreement."
Time is of the Essence: Three-Week Window
Employees should seek legal counsel as soon as the dismissal letter arrives. The window to file a dismissal protection lawsuit is brief: Only three weeks remain after receipt of the termination notice. During this period, employees must act. They can either negotiate a severance package with the employer that waives the lawsuit or file the lawsuit first and then negotiate the withdrawal of the dismissal protection lawsuit. Financial compensation would then act as counter-performance.
As Beulke explains, "A severance package provides the employer immunity from having to argue about the dismissal in court." However, if the rejected employees fail to act within the three-week deadline, the dismissal becomes legal. "No matter how illogical the dismissal may have been, remedies become impossible then."
Speedy Legal Help: Online Advisors to the Rescue
Cost and shock associated with job loss may deter some from seeking help. But for those who want a swift picture of their chances of success but don't have a trusted law firm, online legal service providers offer assistance. These providers and law firms help those who have been dismissed or have received a termination offer review their dismissals and assess the case with labor law experts, often for free.
Cleverklagen, a legal tech company founded by Fabian Beulke, links people with employment issues to competent labor law experts. Through the website, employees can have their case reviewed and set up a non-binding, telephone consultation with a lawyer. If the prospects of success are positive, clients receive a contract outlining the lawyer's terms.
If the case prevails, either a legal protection insurance covers the expenses or Cleverklagen takes on the financial risk of the legal dispute. "If our lawyers negotiate a favorable severance package, we receive a share of the outcome," explains Beulke. If the case surprisingly turns sour for the employee, all costs remain free. "Absence of legal protection insurance shouldn't deter anyone from challenging a dismissal promptly."
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- Severance package
- Employer
- Job loss
- Financing a vocational training program could be an opportunity for individuals who have recently lost their jobs as part of their career transition, as some of the funds from the severance package might be used in this way.
- For those seeking to start their own business after losing a job, a well-negotiated severance package could serve as a vital financial resource, assisting in the initial stages of setting up their business.
