Severance payment after 20 years of service

After 20 years of service, many employees expect their employer to be loyal to them too. But different rules apply in the world of work. Return overrides all morals.

Severance payments can be voluntary or compulsory

• As an employee, you will only receive severance pay in certain cases. There are 2 options: You receive this as a voluntary benefit from the employer to end the Employment relationship or you conduct a dismissal protection process and receive after determination of the Social unlawfulness of termination a severance payment.
• If the employer would like to make voluntary resignation from the employment relationship attractive to you, he can offer you a severance payment. In practice, this is higher, the more responsible your job was and the longer you were employed in the company. After 20 years of service, you will regularly receive a higher payment than if you only worked for 5 years. In these cases the amount is a matter of negotiation.
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Length of service alone is not decisive

• If you do not come to an agreement, it depends on whether the Dismissal Protection Act is applicable. If it does not apply (your company has fewer than 10 employees), the employer can terminate you without having to pay you any severance pay at all. If he does it anyway, he does it voluntarily.
• If the Dismissal Protection Act is applicable, you can submit the dismissal protection suit to the labor court within 3 weeks of the dismissal. If the court determines that the dismissal is socially unlawful, the court can, upon application, nevertheless determine the termination of the employment relationship.


Calculate severance pay - the severance pay regulations in the Dismissal Protection Act simply explained

Anyone who loses their job after many years of activity because of operational reasons ...

• With the dissolution, the employer is also sentenced to pay you a severance payment. The amount is based on your age and length of service.
• In principle, the severance payment is up to 12 gross monthly salaries. Are you 55 years of age? If you have reached the age of 15 and your employment relationship has existed for at least 15 years, the amount increases to up to 15 gross monthly salaries.

After 20 years you will be given an advantage

• If you are older than 55 years, you will receive an amount of up to 18 gross monthly salaries after 20 years of service.
• Your employer can also request the termination of the employment relationship if further cooperation in the company is unreasonable from his point of view.
• Your severance pay is not subject to social security and unemployment insurance. But it has consequences under tax and social security law. Get legal and tax advice at an early stage.