Entitled to Severance Allowance or Job Loss Allowance?

According to Clause 1, Article 49 of the 2012 Labor Code:

"Article 49. Severance Allowance

1. Employers shall pay severance allowance to employees who have been regularly working for them for 12 months or more and have lost their jobs as prescribed in Article 44 and Article 45 of this Code, with each year of work being compensated by one month's salary, but at least two months' salary."

Moreover, Clause 1, Article 44 of the 2012 Labor Code also stipulates:

"Article 44. Obligations of the Employer in Case of Change in Structure, Technology, or for Economic Reasons

1. In cases where structural or technological changes affect the employment of many employees, the employer is responsible for formulating and implementing a labor utilization plan as prescribed in Article 46 of this Code. If there are new job positions, priority shall be given to retrain employees for continued employment.

In the event that the employer cannot create new employment and must lay off employees, severance allowance must be paid to employees in accordance with Article 49 of this Code."

Based on the provisions cited above, in cases where structural or technological changes affect the employment of many employees and the employer cannot create new jobs and must lay off employees, they must settle the policies for severance allowance for employees who have been regularly working for them for 12 months or more.

The time for calculating severance allowance is the total time the employee has actually worked for the employer minus the period the employee participated in unemployment insurance and the work period for which the employer has already paid severance allowance.

Therefore: In cases where the company has applied many new technologies in production, leading to the inability to resolve employment for workers and resulting in layoffs, the company is responsible for resolving the severance allowance policies for those workers.

The period to calculate severance allowance for workers is the total time working for the company before January 1, 2009 (Because according to the information you provided, the company has been paying unemployment insurance for workers since early 2009).

Consequently: The company's resolution of severance policies for employees in this case (not severance allowance policies) is not consistent with legal provisions.

In this case, you and the group of workers may file a complaint to the company's Board of Directors for resolution. If the resolution is unsatisfactory, you and the group may file a second complaint to the Chief Inspector of the Department of Labor - Invalids and Social Affairs where the company is headquartered for settlement according to jurisdiction. Or initiate proceedings in court following civil litigation procedures.

Above is our advisory standpoint concerning the issue you are questioning.

Sincerely!