If compensation is required when an employee is terminated how is the amount to be paid determined?

An employee terminated without a valid cause as stipulated by law is entitled to receive the following severance pay:

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 ten years or more.

In the event that the employer relocates its place of business that essentially affects the normal living of an employee or his/her family, the employer must notify the employee of the relocation at least 30 days in advance or pay an amount in lieu of the advance notice equal to 30 days' wages. In this connection, if the employee refuses to move and work in the new location, the employee has the right to terminate the employment contract and is entitled to receive a special severance pay of not less than 50 percent of the prescribed rates of severance pay.

In the event that the employer terminates the employment of an employee as a consequence of streamlining the work units, production process and distribution service, due to the introduction or change of machinery or technology which thereby results in the reduction of the number of employees, the employer must notify the Labor Inspector and the employee concerned at least 60 days before the date of termination of the employment or pay in lieu of the advance notice to the employee an amount equal to 60 days' wages. The terminated employee will be entitled to the prescribed severance pay. Moreover, if the terminated employee has worked consecutively for over six years, the employee would be entitled to an additional special severance pay at the rate of 15 days' wages per one full year of service, calculated from the start of year seven onwards. However, the total amount of this additional special severance pay is limited to the equivalent of 360 days' wages.

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