Dismissed from work: in which cases you must be paid severance pay
The Supreme Court has established legal approaches regarding the payment of severance pay upon dismissal. The Court emphasized that the employer is obliged to make a full settlement on the day of dismissal, and if a special law does not regulate the issue of severance pay, the provisions of the Labor Code of Ukraine apply.
When severance pay is mandatory
The Labor and Employment Inspection of the Dnipro City Council reminded that Article 44 of the Labor Code of Ukraine guarantees employees severance pay in certain cases.
In particular, it is paid upon dismissal due to staff reduction or downsizing, liquidation or reorganization of the enterprise, refusal of the employee to continue working in cases defined by law, as well as in other cases directly provided for by Article 44 of the Labor Code of Ukraine.
The right to severance pay arises on the day of dismissal
In the ruling dated March 28, 2025, in case No. 360/572/21, the Supreme Court stated that the employee’s right to severance pay arises precisely on the day of dismissal.
If an employee is dismissed on grounds defined by Article 44 of the Labor Code of Ukraine, the employer must make a full settlement on that day. Failure to pay severance pay is a violation of the employee’s labor rights.
When Article 44 of the Labor Code applies
In the ruling dated December 19, 2025, in case No. 640/8468/20, the Supreme Court clarified that a special law does not always exclude the application of the provisions of the Labor Code.
The Court confirmed: if a special law does not regulate the issue of severance pay, the provisions of Article 44 of the Labor Code of Ukraine apply.
When severance pay is not paid
The Supreme Court also noted that severance pay is not automatically granted in every case of dismissal.
If an official is formally dismissed but appointed to the same position on the same day without actual termination of labor relations and loss of job, there are no grounds for severance pay.
The Court emphasized that the purpose of severance pay is to provide material support to the employee during the period of searching for a new job, not to create unjustified payments.
What employers should pay attention to
The Inspection recommends that HR departments check three key issues before processing a dismissal:
- whether the chosen ground for dismissal provides for severance pay;
- the amount of severance pay established by Article 44 of the Labor Code of Ukraine or a special law;
- whether a full settlement with the employee will be made on the day of dismissal.
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