Severance pay
For statutory severance pay in accordance with the BUAG, certain requirements must be met, provided that this ‘basic entitlement’ has not already been fulfilled through the takeover of earlier periods.
Takeover of earlier periods
- Employees who were employed at a company subject to BUAG on 01/10/1987 are credited with all periods worked at that company, unless they were not creditable according to the provisions of the Workers’ Severance Pay Act
- This also applies to employees who were not employed on 01/10/1987, but were rehired by their previous employer within 120 days.
Prior to 01/10/1987, the Workers’ Severance Pay Act and/or the collective agreement regulated whether periods could be credited towards statutory severance pay.
Requirements for the acquisition of a compensation entitlement
The construction worker must be employed for three years (= 156 calendar weeks) at one and the same company:
- either there is an uninterrupted employment contract covering all three years (= 156 calendar weeks) or
- the employee earns at least 92 weeks of employment in the course of one or more employment contracts at the same company (within a three-year period, i.e. 156 calendar weeks), with no interruptions of work that last longer than 22 weeks.
For legal purposes, a transfer to a work group (Arbeitsgemeinschaft) or a company in the same corporate group counts as working for the same company. If the worker is placed in a different company by the labour market service, the new employment contract counts as a continuation in the sense of this provision.
Recording of later employment
Once the basic entitlement is reached, all following weeks of employment will be counted on a company-independent basis, and are therefore used to calculate the amount of the severance pay entitlement.
WARNING:
How the additional employment periods are counted depends on the way in which these employment contracts are terminated. Any employment contract that is ended for one of the following four reasons cannot be counted towards several pay, as these reasons effectively ‘erase’ the claim to severance pay:
- Termination on the part of the employee
- Early resignation without just cause
- Dismissal due to fault
- Mutual resolution
- Apprenticeship
Once an employee has fulfilled the requirements to claim statutory severance pay in accordance with BUAG, the apprenticeship is counted towards the severance pay. In this case, it does not matter whether the claim requirements were met before or after the apprenticeship. The employment periods are counted when there have been 364 weeks of employment, including the apprenticeship.
Leftover periods
If not all employment periods can be counted toward the statutory severance pay entitlement, the law refers to ‘leftover periods’ (arising from the scaling of severance pay according to weeks of employment). Under certain conditions, these leftover periods can be counted towards another potential payment of statutory severance pay.
In this case, a new claim for severance pay (claim requirements) must be earned. This additional basic entitlement must be extended to 260 weeks of employment in order for the leftover periods to be counted.
Special cases
The link below provides more information about the payment of statutory severance pay in the case of a change from a worker relationship to an employee relationship, and in mixed-industry companies.