The longevity award is due to the employee when the contract is terminated by the employer and the employment relationship has lasted at least three years. The amount is at least the salary for 15 days for each full year of service, calculated based on the salary in effect at the end of the employment relationship. The right is lost only when the employee is dismissed with immediate effect for just cause.
This page shows who benefits, how it's calculated, when losses occur, and how the treatment of fixed-term contracts changes.
Read also: Ending the Employment Relationship: The Complete Guide
Article 145, paragraph 1, sets forth two conditions that must be met simultaneously.
| Condition | Content |
|---|---|
| Who terminates the contract? | The decision is made by the employer. |
| Duration | The relationship has lasted no less than three years. |
| Exclusion | Immediate leave for reasonable causes. |
This means that an employee who resigns from an open-ended contract on their own does not receive this severance payment, no matter how many years they have worked. For fixed-term contracts, the rule is different, and we address it below.
Read also: The removal procedure and its steps
Article 145, paragraph 2, provides the formula and the basis for calculation.
The severance pay is at least equal to the salary for a 15-day period for each full year of service, calculated based on the salary in effect at the end of the employment relationship. If the salary is variable, it is calculated on the average salary of the preceding year and indexed.
At the very least, the word is important. This is the minimum threshold. An individual contract or a collective agreement can provide more, never less.
An employee with a gross salary of 90,000 LEK leaves his employer after seven years and eight months of work. The pay for a 15-day period is 45,000 LEK. There are seven full years, so the bonus is 7 multiplied by 45,000, which equals 315,000 LEK.
| Full years of work | Gross salary 60,000 LEK | Gross salary 90,000 LEK |
|---|---|---|
| three years | 90,000 LEK | 135,000 LEK |
| five years | 150,000 LEK | 225,000 LEK |
| ten years | 300,000 LEK | 450,000 LEK |
| fifteen years | 450,000 LEK | 675,000 LEK |
The months remaining in the last full year are not counted, because the law refers to a full year of work.
Read also: Salary calculator: from gross to net and total cost.
There is only one case in which the right falls away entirely, and it is narrowly defined.
Article 145, paragraph 1, strips the employee of the right to severance pay when dismissed with immediate effect for just cause. Article 154, paragraph 4, reiterates this and adds an important clarification. Even in this case, the employee retains the right to compensation for unused leave.
Note: Reasonable grounds are not evaluated by the employer. Article 153, paragraph 3, leaves it to the court to decide whether they actually existed. Therefore, an immediate departure wrongly characterized as justified risks being overturned, along with the payment of seniority benefits and compensation of up to one year's salary.
Article 145, paragraph 3, states clearly: the severance pay is increased by the compensation provided in the event of termination of the contract without just cause or of immediate termination without just cause.
| Voice | Mass | Article |
|---|---|---|
| The reward for antiquity | 15 days' pay for each full year. | 145, point 2 |
| Notice period pay | By years of work | 143, point 1 |
| Failure to follow procedure | Two months' salary | 144, point 5 |
| Decisions without reasonable grounds | Up to one year's salary | 146, point 3 |
| Unused vacation | Payment for remaining days | 94, point 5 |
These voices do not replace one another. In a successfully contested departure they come together, so the real cost of a hasty departure is many times what it appears to be at first.
Read also: Leave Register and Unused Days
Article 152 expands the right. Upon the termination of employment relationships that have lasted at least three years, the employee is entitled to a seniority award as in the case of the employer's termination of an indefinite-term contract.
The distinction is fundamental. Here, the law does not require the solution to come from the employer. It is enough that the relationship lasted three years and has ended.
This directly affects businesses that renew one-year contracts in succession. After three consecutive years, the employer's failure to renew the contract is also regarded as the termination of an open-ended contract, pursuant to Article 151, paragraph 1.
Read also: Types of contracts and when they become indefinite
This template was prepared by AlProfit Consult to close an employee's final account with nothing left behind.
Final Liquidation Calculation
Subject: company name, NUIS
Employee: first name and last name, position
Start date: date
Last relationship date: date
Duration: years and months
Final gross salary: amount
A. Most recent pay
Working days in the last month
Recent additions
Subtotal
B. Unused days off
Days remaining in the current year
Days carried over from the previous year
The value of a day
Subtotal
C. Longevity Award
Full years of work
The pay for a 15-day period
Subtotal: years multiplied by the 15-day pay.
D. Other voices as appropriate
Notice period pay when it is not worked.
Other voices in agreement
E. Gross total and withholdings
Gross total
Contributions and taxes under the applicable legislation
Net amount to be paid
Payment date and bank account
Prepared by: name and function
Signatures of the employer and the employee
The tax treatment of each item is verified under the applicable tax legislation, because the Labor Code does not address this area.
Read also: Invoice and payment terms
After three years of employment, pursuant to Article 145, paragraph 1, of the Labor Code.
At least the pay for a 15-day period for each full year of service, calculated based on the salary at the end of the employment relationship.
No, when it comes to an open-ended contract, because Article 145 requires that the termination come from the employer. For fixed-term contracts, Article 152 recognizes the right after three years regardless of who ends it.
Above the indexed average salary of the preceding year, as provided in Article 145, paragraph 2.
Only when the employee is dismissed with immediate effect for just cause. Even then, he retains payment for unused vacation.
No. The law refers to a full year of work, so any months remaining beyond the last year are not included in the calculation.
Yes. The measure in Article 145 is the minimum. An individual or collective contract may provide for more.
Yes. Article 145, paragraph 3, adds to the award for termination without just cause and to that for immediate unjustified termination.
