What Is Severance Agreement
The severance agreement contains the details of the benefits that the employee may attain form the employer company in case his employment gets terminated or he is being laid off. This policy is introduced keeping in minds the mutual benefits. As per its norms, the employee will be supported by the company financially for a period of time so that his monthly funds do not come down to zero. Also, with this support, the employee does not sue the employer company of wrong termination. Neither do he seeks the unemployment compensation form the government. But in other words, the employee takes a legal bribe from his employer for staying refrained from his most vital employee laws.
The terms and conditions specified in the Severance agreement vary as per the industry, sector and the designation of the employer. These policies are included in the employee’s handbook of the company. The payment offered by company majorly depends upon the period the employee has served. For instance, the employee who has served the organisation for more than fifteen years will get more severance payment that the one who is leaving after ten years.