Odstupné

Under Czech law

Severance is regulated by § 67–§ 68 of the Labour Code (Act No. 262/2006 Sb.). It belongs to employees whose employment ends by employer notice for organisational reasons (§ 52 a–c) or by agreement for the same reasons: at least one month''s average earnings after less than a year of service, two months after one to two years, three months after two or more. Where employment ends for health reasons caused by a work injury or occupational disease (§ 52 d), the minimum is twelve months'' average earnings.

Severance is a floor, not a ceiling — collective agreements and contracts often raise it. It is payable in the first payday after termination unless agreed otherwise, and it does not depend on the employee finding or not finding a new job.

A practical example

A warehouse closes and a worker with six years of service receives notice under § 52 písm. a). His severance is three months'' average earnings — including the average of his overtime and bonuses, which is where employers most often under-calculate. His colleague who signs a "mutual agreement" that omits any reference to organisational reasons risks losing both severance and favourable unemployment benefits.

When you need a lawyer

Before signing any termination agreement: whether the organisational reason is stated in the document decides the severance. And when average earnings are computed low — the calculation base under § 351–§ 362 includes variable pay components employees rarely check.