Employment for 3 Years and Then Resigning: Is Severance Allowance Received?
According to Article 46 of the Labor Code 2019 on severance allowance, the provisions are as follows:
- An employee shall receive severance allowance if they meet the following conditions:
- Termination of the labor contract under one of the following cases:
+ Expiry of the labor contract;
+ Completion of the work according to the labor contract;
+ Mutual agreement to terminate the labor contract;
+ The employee lawfully unilaterally terminates the labor contract;
+ The employer lawfully unilaterally terminates the labor contract;
...
Regularly working for 12 months or more for the employer;
Not falling under the conditions for receiving a pension;
Not in the case of being dismissed.
Calculation method: Each year of work is eligible for half a month's salary as severance allowance.
(1) Working time for severance allowance calculation = Total working time of the employee - Time the employee participated in unemployment insurance (BHTN).
Severance allowance = 1/2 x Salary for severance allowance calculation x (1) Working time for severance allowance calculation.
From the information provided by you, it is observed that the employee has participated in social insurance (BHXH), health insurance (BHYT), and unemployment insurance (BHTN) since March 3, 2018. Therefore, the company is not required to pay severance allowance for this employee.
Simply put, severance allowance will compensate for the period during which the employee has not been covered by unemployment insurance (12 months not covered will be paid half a month's salary). However, the company has fulfilled its obligations since officially signing the contract, including social insurance (BHXH), unemployment insurance (BHTN), and health insurance (BHYT) for the employee. Therefore, if the employee leaves on June 30, 2021, the company is not required to pay this allowance but only fulfill responsibilities according to Article 48 of the Labor Code 2019.
Respectfully!
