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Redundancy benefit

Prindi

Lisatud 16.02.2017 | Uuendatud 17.04.2020

Eligibility

The insurance benefit upon redundancy (hereafter the redundancy benefit) is granted to an employee or official whose employment relationship lasted for at least five years and

  • whose employment contract was terminated on grounds of redundancy or
  • who terminated their employment contract because the employer, due to circumstances beyond their control, failed to provide the employee with work to the agreed extent or reduced the wages based on subsection 37 (5) of the Employment Contracts Act or
  • whose service relationship was terminated based on section 90 of the Public Service Act.

Old-age pensioners have the right to receive the benefit as well.
 

Amount of benefit

The amount of the redundancy benefit depends on the duration of the employee's last employment relationship or the official's service relationship. If the employment relationship or years of service have lasted:

  • 5-10 years - the benefit is paid in the amount of one month's average salary or wages;
  • 10+ years - the benefit is paid in the amount of two months' average salary or wages.


The amount of the benefit shall be calculated, based on the data in the unemployment insurance database, from the employee's or official's average salary or wages for one calendar day during a period of nine months. The calculation will take into account the total amount of remuneration paid by the employer during the nine months preceding the final three months of work from which the unemployment insurance premium has been withheld. The average remuneration for one calendar day is calculated by dividing the total amount of remuneration for these nine months by 270. The months during which, based on the data in the unemployment insurance database, an employee or an official has been paid remuneration are deemed to be the months of work for such a person.


Granting and payment of redundancy benefit

The Unemployment Insurance Fund will review the employer's application and make a decision on the granting of the redundancy benefit within two weeks of the receipt of the application. The Unemployment Insurance Fund may extend the review period by two weeks if it has a good reason to do so. The Unemployment Insurance Fund will immediately notify the employer and the employee or official of the extension of the term and inform them of the reason for the extension.

Once the decision on the granting of the benefit has been made, we will deliver it to the employer and the employee or official either by unregistered letter or by electronic means within five calendar days of the date on which the decision was made. You can indicate how you would like to receive the decision in the application.

The benefit will be transferred to the employee's or official's bank account no later than on the fifth calendar day after the date of making the decision.

 

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