Golden handshake or severance package

Golden handshake, severance pay, dismissal, immediate dismissal. A golden handshake is also called a severance payment. The employer receives this if he is dismissed through no fault of his own. The subdistrict court judge will determine who is entitled to this golden handshake and how high it will be. Therefore, one must always go to court in the event of unfair dismissal. There are a number of rules that determine the amount of the golden handshake.

Dismissed

Not everyone can just be fired. When someone has a contract for an indefinite period or is still in the middle of their fixed-term contract, they cannot simply be sent out onto the street. Certain rules and laws apply. For example, pregnant women are protected from dismissal; they cannot simply be dismissed. This is called a dismissal ban. Other employees may not simply be dismissed either. If a temporary contract is not extended, this falls outside the ban on dismissal.

Court

Anyone who is unfairly dismissed will have to go to court to challenge this. Anyone who does not do this will therefore agree to dismissal and ultimately receive nothing at all. In the event of a reorganization, the employer will have to apply for dismissal to the subdistrict court. In this case, the subdistrict court judge will often decide that the employee will receive a golden handshake or severance pay. This is because the employee has not asked for the dismissal and will therefore lose income. In most cases, this golden handshake is awarded by the judge. The employer can also request dismissal from the subdistrict court in other cases. For example, in the event of theft by the employee, the employee himself is to blame for his dismissal and he will not receive a golden handshake. The dismissal must therefore firstly be through no fault of the employee. Secondly, the employer must be to blame for pushing through with the dismissal.

Amount of severance pay/golden handshake

The question is of course how much one gets with a golden handshake. Only the subdistrict court judge can determine this. However, there are a number of factors that play a role in the amount of the golden handshake:

  • employee age
  • number of years of service
  • Gross annual income
  • culpability of the employer
  • employer’s financial situation

Age

The age of the employee depends on the amount of the golden handshake. It can be said that the older the employee is, the higher the golden handshake will be. This is because a younger person is considered well able to find another job, while this becomes much more difficult for an older employee.

Number of years of service

The longer you are employed, the higher the severance payment. Someone who has been employed for 1 year receives approximately 1/10th of someone who has been employed for 10 years. The number of years of service therefore plays a role.

Gross annual income

Of course, the gross annual income also plays a role. One receives a certain percentage of the gross annual income. The higher this is, the more severance pay. two people with the same number of years of employment, from the same employer and the same age, can still both receive a different golden handshake if their gross annual income differs.

Employer culpability

The more the employer can be blamed for requesting dismissal, the more the golden handshake will be. If this is normal, the golden handshake will receive a correction factor of 1. However, if the employee is to blame for being dismissed, the correction factor is 0.5 and the severance payment is therefore half of what it would normally be. If the employer is culpable or seriously culpable, the correction factor can amount to 2. This means that you receive twice as much in severance pay as it would normally amount to.

Employer’s financial situation

The subdistrict court judge also always looks at the employer’s financial situation. If he no longer has any money due to a reorganization or bankruptcy, the subdistrict court judge can determine that the amount of the golden handshake must be adjusted.

Example

A 35 year old employee is dismissed after 5 years of service. His gross annual salary is 29,000 euros. The employer is normally culpable. The golden handshake will amount to: 6,042 A 50-year-old employee is dismissed because of his age after 20 years of employment. His gross annual salary is 33,000 euros. The employer is therefore seriously culpable. The golden handshake will amount to: 110,000.