Our client consulted with us about the need to give an advance notice and severance pay to the employee who has completed the term of employment agreement.
A Contract of Employment shall expire upon the completion of the period specified in the Contract of Employment without the need to give an advance notice. See below for Section 17 of the Labor Protection Act for details.
If the Contract of Employment specified the completion date and later the employer and the employee extend it, the severance pay will be calculated with all the employment periods combined (even if the employee has not worked continuously according to Section 20, listed at the bottom.) Here is the detail of severance pay according to Section 118 of the Labor Law:
30 days’ wages where the employment period is at least 120 days but is less than one year.
90 days’ wages where the employment period is at least one year but is less than three years.
180 days’ wages where the employment period is at least three years but is less than six years.
240 days’ wages where the employment period is at least six years but is less than ten years.
300 days’ wages where the employment period is at least ten years but is less than twenty years.
400 days’ wages where the employment period is twenty years or more.
Section 17. A Contract of Employment shall expire upon the completion of the period specified in the Contract of Employment without the need to give advance notice.
Whereas no definite period is specified in the Contract of Employment, an Employer or an Employee may terminate the contract by giving advance notice in writing to the other party before or at the date a wage payment falls due in order to take effect on the following date a wage payment falls due in order to take effect on the following date a wage payment falls due, but advance notice of more than three months is not required.
Whereas an Employer terminates a Contract of Employment, if the Employer fails to state any reasons for termination in the notice of termination of the Contract of Employment, the Employer shall not subsequently cite a cause under Section 119.
Upon termination of the Contract of Employment under paragraph two, the Employer may pay Wages, at the amount to be paid, up to the due time of termination specified in the notice and dismiss the Employee immediately. The payment of Wages under this paragraph shall be deemed as remuneration paid to the Employee under Section 582 of the Civil and Commercial Code.
Advance notice under this Section shall not apply to the termination of employment under Section 119 of this Act, and Section 583 of the Civil and Commercial Code.
Section 20. Whereas an Employee has not worked continuously on account of an intention of the Employer to deprive such Employee of any right under this Act, irrespective of which duty assigned by the Employer to the Employee and of how lengthy a lapse between each period of employment is, each period of employment shall be counted together for the purpose of the acquisition of any right by such Employee.
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