What payments are due to employees upon liquidation of an enterprise?

Responsibilities of the employer when reducing the number of staff or liquidating the organization

The employer's responsibilities, guarantees and compensation for employees upon termination of the activities of a company or enterprise are prescribed in Article 180 of the Labor Code of the Russian Federation. In accordance with the above article, the employer is obliged to offer the employee another vacant job. This may be fulfilling the duties of an employee who is on sick leave, or on parental leave or a long business trip.

The employer must specify in the offer all job responsibilities and salary for the proposed position. During the entire period of notice of dismissal, he must offer the employee all possible vacancies.

It is worth noting that the employer is obliged to notify the employee of the upcoming dismissal no later than two months before the reduction of staff.

The warning sheet must necessarily contain a signature and the date when the employee became familiar with the notification. If the employee refuses to sign the notice, it is necessary to draw up a report. The period established by law - two months - begins to be calculated the next day after the act is drawn up. This condition is not considered fulfilled if the notice of dismissal was announced at a general meeting and not individually.

An employee who finds himself temporarily unable to work due to illness during the notice period does not have the right to demand an extension of the period.

Receiving severance pay upon liquidation of state institutions

Employees of government agencies receive liquidation benefits based on the rules prescribed in the Labor Code of the Russian Federation. Regulatory acts by industry are also considered. They are the ones who determine the requirements and rights of civil servants.

Regardless of what enterprise a citizen works for, he is required to pay severance pay. Its amount should not be lower than the officially established limit. Employees should not forget that payment must be made two months in advance.

Employee rights during liquidation or staff reduction

The employee must be warned about the upcoming dismissal due to a reduction or cessation of the organization’s activities no later than two months before the date of termination of the employment relationship.

The employee must be offered a transfer to existing vacant positions at the enterprise. This also applies to all jobs of temporarily absent workers.

On the last working day, the employee must be paid in full, which consists of wages for the period worked, compensation for unused vacation days and redundancy benefits.

It is worth noting that monthly benefits are required to be paid to women who, at the time of liquidation of the organization, were on maternity leave and do not receive unemployment benefits.

Article 178 of the Labor Code of the Russian Federation provides for the receipt of an average monthly compensation payment to employees for up to three months if they have not found a new job by joining the labor exchange no later than two weeks after the date of dismissal.

Cash compensation for unused vacation days

According to labor legislation, which was established for 2019, employees have several types of leaves in connection with their work activities:

• main leave, which is granted in connection with work activities;
• additional leave, which is provided in connection with study, work under special conditions (northern regions, hazardous industries), creative recreation, as well as additional days of rest that may be established by an employment contract;
• a separate place is occupied by leave in connection with pregnancy and childbirth, which is provided to a woman before childbirth, or after leaving maternity leave, but it should not be confused with sick leave for childbirth, as well as leave to care for a child up to a certain number of years (1.5, 3 and 6 years).

If, upon dismissal, it is established that the person did not take all or part of one of the specified vacations, then he must be paid appropriate compensation.

This should be monitored by the personnel and accounting department of the enterprise. Such days must be clearly calculated, and then appropriate cash payments must be calculated based on the average salary. Due to the fact that such payments are included in the severance pay, the employee must be provided with a payout sheet, which will clearly indicate how many vacation days were not used and what compensation is due for them.

This is necessary so that if an employee suddenly has questions, he can resolve them with the administration, and not immediately contact the regulatory authorities.

The biggest issue is the leave that is provided to women in connection with their pregnancy and childbirth. In 2021, labor legislation clearly states that a woman can take such leave before she goes to the maternity hospital, or after she gives birth to a child. It is not included in the sick leave period for pregnancy and childbirth.

Many personnel workers forget about this, and upon dismissal, they forget to make settlements with their employees, which leads to litigation.

The last point that you need to pay attention to is the calculation of average earnings. It will include all wages paid at the enterprise, including bonuses and other monetary incentives that were given by the administration of the organization as incentives, but were not included in the mandatory payment fund for work performed.

It is important to know that compensation for unused vacation days is an important part of severance pay upon dismissal, and such payments are mandatory and cannot be disputed.

Regulations for staff reductions

The procedure for reducing staff in an organization is strictly regulated by the Labor Code of the Russian Federation. It takes place in several stages:

• The first step is to determine the list of positions that are subject to staff reduction.
• An order is issued that contains the timing of the reduction and the number of jobs that are subject to reduction.
• The employer does not have the right to decide independently, without relying on labor legislation, which employees are laid off. When downsizing, preference should be given to employees with high qualifications and labor productivity.
• No later than two months before the date of reduction established by the order, the employee must be notified in writing individually. The notification sheet must be signed and dated by the employee. A notice of dismissal given at a general meeting has no legal force. This is a violation of the regulations.
• The employer must notify the employment service authorities and the trade union organization in writing about the planned reduction.
• The employer offers the employee available vacancies at the enterprise.
• On the last working day, the employee is given a work book with all the necessary entries. In case of refusal to receive a work book, personnel department employees send it by registered mail to the employee’s place of residence.
• The employee retains his average salary after termination of the contract for the next two months. If an employee joined the employment exchange within 14 days after the termination of the employment relationship, his average earnings are retained for another month.

In the case where the productivity of several employees is the same, but you need to leave one, preference should be given to:

• employees who have two or more dependent family members;
• workers who no longer have working family members, and this income is the main means of subsistence;
• an employee who was injured at this enterprise;
• disabled people of WWII and combat;
• employees who improve their skills in this area without interruption from production.

Severance pay upon liquidation of private institutions

A private business is a business in which funds from the state budget have not been invested. Institutions of this type are divided into two subtypes: Limited Liability Companies (collective) and Individual Entrepreneurship (single-person).

The decision to liquidate is made by the owner. He also appoints a liquidation commission. Her responsibilities include monitoring the facility and paying former employees the required benefits. During liquidation, everyone is fired indiscriminately: current employees, women on maternity leave, workers on vacation.

As soon as the decision on liquidation is officially approved by the justice authorities, the liquidation commission is obliged to carry out the following stages of work:

• notification of dismissal two months in advance (the document is issued against signature to each employee). The time count starts from the moment of signing;
• over the next two months, the preparation of personal files of employees is underway. The amount payable for each employed person is calculated. It happens that the commission decides that the most profitable option is to assign vacation to all employees. This is done so as not to have to pay compensation for unused vacation days in the future;
• on the last day of service the employee receives payment. He is given a work book. It contains a record of forced dismissal, which occurred due to the liquidation of the organization.

The full payout given to each employee includes:

• compensation for unused vacations (for all that were due to the employee according to his position, and not just for standard monthly vacations);
• earnings calculated based on the number of working days in the last month;
• wages for the next two months, based on the salary for the last month worked.

The above calculation applies to the liquidation of an individual entrepreneur. The legality of the calculation is established by government agencies.

In some cases, employers voluntarily increase the average dismissal calculation. They draw up contracts that stipulate specific amounts that are ready to be paid if the company has to be liquidated. It's completely legal. The employer has the right to increase the salary, but he does not have the right to cut it.

Sometimes companies issue mass layoff notices. Data about each worker is transferred to the employment service. The profession, qualifications and amount of earnings of a particular person are indicated.

Sometimes liquidation notices are placed in the newspaper. Even under this condition, the liquidation commission undertakes to inform workers individually.

Workers involved in seasonal work are given an amount equal to two weeks' earnings. Employees operating under an employment contract for a period of less than two months are not entitled to benefits. If an employee combines several jobs, he is paid a standard benefit.

There is an option to receive payment from the liquidated organization for the third month of unemployment. The right to such a privilege can be obtained as follows:

1. Within two weeks from the date of dismissal, the employee registers with the labor exchange.
2. He remains unemployed for two months.
3. After two months, the employment center issues the former employee a notice that he does not have a permanent place of work. The former employee submits this document to his former boss.
4. An employer who did not manage to liquidate his enterprise completely is obliged to accept the employee’s notification with an accompanying written statement.
5. If the documents are legal, the employer is obliged to pay the cost for the third month of involuntary unemployment.

Attention! The employment service undertakes to provide each involuntarily laid-off person with a job that corresponds to his professional suitability. The calculation takes into account professional training, monthly salary, position in the previous place, physical condition, and the distance of the place of residence from the potential place of work.

For example, if an employee received a salary exceeding the subsistence level, they have no right to offer him a position with a salary that is below this threshold. The new salary must either match the previous one or exceed it. Severance pay for women who go on maternity leave is paid according to the above-mentioned scheme.

Difficulties occur during calculations. If an employee is not sure that the payment he was provided with is correct, he has the right to contact a lawyer.

The process of liquidating an organization and informing employees

During the liquidation of an organization, all of its employees are subject to dismissal. Each stage of the procedure is strictly regulated:

• the first stage is the mandatory notification of the employment service about the liquidation of the enterprise in writing;
• Notifying employees within the time limits clearly established by law - no later than 2 months. Information about the liquidation of an enterprise must be in writing; this can be done through a trade union organization.
• The last stage is drawing up an order and making entries in work books.

An employee upon dismissal for reasons of liquidation of the organization has the right to the following compensation:

• receiving wages for all days worked, including the day of signing the order and issuing a work book; compensation for days of unused vacation;
• one monthly salary upon dismissal and one salary for two months;
• if an employee joined the employment exchange no later than two weeks after dismissal, he is entitled to payment within three months. All payments are made strictly on the day of dismissal.

Types of required payments

As you know, any enterprise that conducts business activities has employees on its staff. The latter perform certain work, and they are entitled to material compensation for such activity in the form of wages.

If an organization announces its liquidation, it means that all employees are actually left without jobs, and therefore become unemployed. From a psychological point of view, significant changes occur in their lives as they are forced to look for a job.

The state comes to the defense of such workers, and at the legislative level obliges enterprises that have announced their liquidation to initially support their employees financially, that is, pay severance pay so that they can find a new job without harm.

To prevent owners from being able to restrict such persons, severance pay is established by the state and consists of the following main parts.

1. Special monetary compensation to employees for unused days of all vacations.
2. Financial compensation in the form of wages.
3. Severance pay.
4. Financial payments in the form of monetary compensation for wage arrears that may have arisen during the entire period of work performed by persons.

It is immediately worth noting that in 2021, this component of the severance pay has not changed, and not only employers, but also employees who are subject to layoffs should be aware of this in the event of the complete liquidation of the organization. Severance pay must be paid on the employees' last day of work, in the same way as when a layoff occurs. If one of them was on sick leave at that time, or was absent from the workplace for another valid reason, then payments upon dismissal must be made on the day of such employee’s application, or transferred to his bank account. In this case, he must be notified of this by registered mail.

It is important to know that the employer does not have the right to make any restrictions on financial payments upon dismissal due to liquidation, which constitute severance pay, or to pay it in installments. Therefore, payment must occur on the day of dismissal.

Guarantees and compensation for workers

Employees have the same compensation both in case of liquidation of the organization and in case of staff reduction. All payments must be made strictly on the day of dismissal. The employee has the right to receive compensation for all vacation days remaining at this enterprise. Employee guarantees during layoffs are strictly enshrined in law.

When staffing is reduced, the employee must be offered available vacancies at the enterprise.

If an employee is dismissed due to the liquidation of an enterprise or a reduction in the number of employees, he has the right to register with the employment center and receive compensation payments amounting to at least the average monthly salary within three months after termination of the contract. Upon termination of the employment contract, the employee must be compensated for all remaining vacation days.

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Notifying company employees about liquidation

Notify the company's employees about the liquidation of the organization 2 months in advance. The document is handed over against signature; the date of familiarization with the order must be indicated. If an employment contract with a person was concluded for a period of up to 2 months, then he must be notified at least 2 calendar days in advance. Personnel hired for seasonal work are notified at least 7 days in advance.

Sometimes situations arise when bankruptcy proceedings begin against a company. In this case, the bankruptcy trustee notifies the staff of the dismissal no later than 1 month from the day the bankruptcy proceedings began.

Art. 180 of the Labor Code of the Russian Federation allows an employer to terminate an employment contract with an employee, but this must be done with the written consent of a specialist. Termination is possible before the expiration of 2 months. If you are the owner of an enterprise and have initiated this procedure, then the employee must be paid additional compensation in the amount of average earnings.

Compose a notice for the employee, the form can be arbitrary. Make 2 copies, one should be given to the employee, the second copy should be left at the company. The employee may not sign the notice.

In this case, you need to draw up an act, record in it the date and the fact that the notification was given to the person.

The act is drawn up in front of witnesses and sealed with their signatures. The form of the act is arbitrary. Employees of the company and members of the liquidation commission can become witnesses.

It is possible that an employee is on a business trip at a time when the company’s management makes a decision to liquidate. In this case, you need to recall the person from the business trip. The notice of liquidation of the organization is handed to him against his signature.

An order that the employment contract is terminated must be issued after the two-month period has expired. You must familiarize each employee of the enterprise with the order; this must be done under signature. If a person refuses to read the order, or it is impossible to familiarize him with the document, then a note must be made.

Be sure to make an entry in your work book, the wording must be clear, and you must provide a link to the Labor Code of the Russian Federation. The dismissed specialist receives compensation upon liquidation of the company. On the day the employee goes to work for the last time, he should be issued a work book.