In a recent decision, the Court of Appeals Assembly of Civil
Chambers ("Court of Appeals") held that employees in
definite duration agreements are not entitled to claim severance
pay if the agreement expires based on the agreed termination
criteria (decision dated 30 May 2015, 2014/22-391 E., 2014/710 K.).
The Court of Appeals reasoned that an agreement expiring after a
definite term is not a termination reason which can be attributed
to the employer. It also noted that these circumstances are not
included in the legislative qualifying criteria for severance
In the case at hand, the employee was dismissed from employment
without receiving notice. The employee filed a re-employment
lawsuit, claiming the agreement is not automatically terminated
because he had been undertaking other additional work besides the
specified contractual tasks and this other work had continued after
termination of his employment agreement. The employee argued that
it was not possible for him to be aware of the termination without
receiving notice. He further claimed that the employer's
failure to renew the agreement should be deemed to be termination
of the contract by the employer.
The court of first instance held in favor of the employee. The
lower court held that whether an agreement is concluded for a
definite or indefinite term has no impact on entitlement to
The Court of Appeal ultimately overturned the lower court and
held that the case hinged on whether an employee is entitled to
severance pay when a definite term employment agreement expires.
The Court of Appeals based its reasoning on Article 14 of Labor Law
number 1475, which remains in force despite the rest of the law
being abrogated. According to Article 14, severance pay is only
available where the employment agreement is:
At least one year old, measured from
the date the employee started working.
Terminated in a manner stipulated
under Article 14, or by the employee's death.
The Court of Appeal noted that in the case at hand the agreement
expired due to the conclusion of the specified work. Therefore, the
Court of Appeals held that the employer had not terminated the
employment agreement. Rather, the agreement had terminated
automatically, in line with the parties' initial
Article 14 clearly states when severance pay can be claimed. The
Court of Appeal held that severance pay cannot be claimed in the
case at hand because automatic expiry of the agreement is not a
termination method mentioned in Article 14.
The Court of Appeals' recent decision is in line previous
decisions on expiry of definite term decisions from 1993 and
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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