04.10.2023

TERMINATION OF EMPLOYMENT AGAINST AGREED COMPENSATION

What are the requirements for termination of employment at the initiative of the employer against agreed compensation?

According to Art. 331, para. 1 of the Labor Code, the employer may, on his own initiative, offer the worker or employee termination of the employment contract against compensation. If the worker or employee does not make a written decision on the proposal within 7 days, it is considered that it has not been accepted. In para. 2 of Art. 331 of the Labor Code provides that if the worker or employee accepts the offer under para. 1, the employer owes him compensation in the amount of not less than four times the amount of the last received monthly gross remuneration, unless the parties have agreed on a larger amount of compensation. That is, negotiating the amount of compensation depends on the will of both parties. The law does not provide an upper limit for compensation. If the compensation is not paid within one month from the date of termination of the employment contract, the reason for its termination shall be deemed to have expired.

The provision of Art. 228 of the Labor Code regulates that the gross remuneration for determining benefits under Section III of Chapter X of the Labor Code is the gross remuneration received by the worker or employee for the month preceding the month in which the basis for the corresponding compensation arose, or the last monthly gross remuneration received by the worker or employee, unless otherwise provided.

According to Art. 17, para. 1 of the Ordinance on the structure and organization of the salary in the gross remuneration for determining benefits under Art. 228 of the Labor Code (that is, also for the compensation under Art. 331, para. 2 of the Labor Code, unless otherwise agreed) include: 1. the basic salary for the time worked; 2. the remuneration above the basic salary, determined according to the applied labor payment systems; 3. the additional labor remunerations determined by the ordinance, by another normative act, by a collective or individual labor contract or by an internal act of the employer, which are of a permanent nature; 4. the additional labor remuneration in case of internal replacement under Art. 259 of the Labor Code; 5. the remuneration in accordance with Art. 266, para. 1 of the Labor Code; 6. the remuneration paid during downtime or due to production necessity, under Art. 267, para. 1 and 3 of the Labor Code; 7. the remuneration pursuant to Art. 268, para. 2 and 3 of the Labor Code.