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The reinstatement calculation is a selectable item under the Labor claims module, like severance pay and notice pay. This page explains the rules on which the calculation is based and the module's options.
Claims after reinstatement
When a reinstatement decision given on a finding of invalid termination becomes final, the employee applies to the employer within ten working days. If the employer reinstates the employee within one month, the employer pays period of unemployment pay; if not, non-reinstatement compensation arises in addition and the employment contract is deemed terminated on the date of non-reinstatement (Labor Law No. 4857 Art. 21).
| Item | When | Amount | Legal basis |
|---|---|---|---|
| Period of unemployment pay and other rights | Whether or not the employee is reinstated | Up to 4 months' wages + social benefits | Labor Law Art. 21/3 |
| Non-reinstatement compensation | If not reinstated in time | 4 – 8 months' wages | Labor Law Art. 21/1 |
| Union compensation | If the termination is on union-related grounds | At least 1 year's wages | 6356 s. K. m.25/4 |
| Severance pay and notice pay difference | If not reinstated | Recalculated with 4 months added; amounts paid are offset | Labor Law Art. 21/4, Court of Cassation |
Period of unemployment pay
For the time not worked until the decision becomes final, the employee is paid wages accrued and other rights for up to a maximum of four months. If the actual period of unemployment is shorter than four months, that period is taken as the basis. "Other rights" are recurring payments to the employee such as meals, transport and bonus; they are calculated on the basis of the gross wage including fringe benefits.
Non-reinstatement compensation
An employer who does not reinstate the employee in time pays compensation equal to at least four and at most eight months' wages. The number of months is determined by the court (or by the parties in mediation); in Court of Cassation practice, the number of months increases with length of service. If the termination is based on union-related grounds, the compensation cannot be less than the employee's one-year wage. The calculation is based on the base gross wage.
Law No. 7036 (25.10.2017): The court determines the wage for the period of unemployment and the non-reinstatement compensation in monetary terms based on the wage at the filing date (Labor Law Art. 21/4). In older cases, the Court of Cassation calculated the compensation using the wage at the date of non-reinstatement; in the module, you determine which date's wage is to be used and enter that wage.
Recalculation of severance pay and notice pay
If the employee is not reinstated, the contract is deemed to have ended on the date of non-reinstatement. The period of unemployment of up to four months is added to length of service; severance pay, notice pay and annual leave pay are recalculated based on the wage and length of service at this date. Severance pay and notice pay paid at termination are offset against the new amount; the difference is paid to the employee.
Tax, premiums and interest
- Wage for the period of unemployment: it is in the nature of a wage; income tax, stamp tax and insurance premiums are deducted, and it is reported to SGK. Interest: as with wage claims, the highest interest rate applied to deposits.
- Non-reinstatement compensation: exempt from income tax (GVK Art. 25), not subject to insurance premiums; stamp tax is deducted. Interest: statutory interest from the date of non-reinstatement.
- Severance pay difference: stamp tax only; the ceiling is the ceiling at the new termination date.
What will the module do?
It is selected in the labor claims form, like severance pay and notice pay; the inputs are:
- Termination date, filing date, date the judgment became final and date of application to the employer, date of non-reinstatement,
- Gross wage and fringe benefits at the filing date (or at the selected date),
- Period of unemployment: the actual period of unemployment or the upper limit of 4 months,
- Non-reinstatement compensation: a choice between 4 – 8 months; at least 12 months for union-related termination,
- Recalculation of severance pay and notice pay and offset of amounts paid at termination,
- Gross and net breakdown (tax exemptions item by item), interest start dates.
The result is saved as a report; PDF, Word and UDF output is available. It is combined in the same report with severance pay, notice pay, overtime and other items.
Frequently asked questions
How many months does the wage for the period of unemployment cover?
Wages and other entitlements for up to four months (Labor Law Art. 21/3). If the actual period of unemployment is shorter, that period.
How much is non-reinstatement compensation?
At least four and at most eight months' wages; at least one year's wage for union-related termination.
Are severance pay and notice pay recalculated?
Yes; four months are added to length of service, the calculation uses the wage at the date of non-reinstatement, and amounts already paid are offset.
Which date's wage is used?
In cases filed after 25.10.2017, the wage at the filing date (Law No. 7036). Under the earlier practice, the compensation was calculated using the wage at the date of non-reinstatement.
Related topics
Labor claims module
Severance pay, notice pay, overtime, national and public holidays (UBGT), annual leave and reinstatement in a single report; gross and net to expert standards.
View the module → See prices