Hey all, of course I intend to consult with labor lawyers, but I wanted to ask here too.
My company offered me 6 months pay up front to terminate my contract, as part of their initial offer. I understand this is an “average” amount. But I’ve often heard of people getting 12 months.
I’m trying to understand what is a reasonable ask. I understand it often depends on the length of tenure and also position within the company.
One I’ve heard of is “1 month for every year you’ve been with the company”.
Can anyone share their personal experiences with this?
I’m at 9 years, and my title is Senior Manager for an international company
6 comments
Which labor lawyer are you using?
I assume we’re talking about 解決金 here. Legally and in practice it has very little to do with tenure, but rather if there is any underlying justification for the dismissal. If there is absolutely no justification for dismissing you, i.e., they just want to convince you to leave, then you have all the leverage and it’s just a matter of how much you can wring out of them. A brand new hire that’s only been working for a few months could get 12 months of 解決金. It’s also typically categorized as 慰謝料 and therefore untaxed. Cha-ching!
Tenure is mostly for calculating 退職金 (if any) which is separate from 解決金 and depends on each company’s internal policies.
Definitely worth confirming if it’s 解決金、慰謝料 or 退職金 as they would all be handled differently from a tax perspective.
In these cases there is sometimes also the option for employees to remain on payroll and receive their salary but not go to work anymore, known as “garden leave”. The other option is the one time 退職金 which comes with 400,000 JPY tax free for every year year of service. So in your case 3.6M JPY tax free. However, then you’ll be off their payroll right away.
This is only based on my experience so YMMV but 6 months seems to be average for a big company, 3 for smaller ones. If you are ready to leave I would probably ask for a year and settle on 9 months given that you have been there for 9 years. Friends who just left a big social media company here agreed on 6.
Back when I was an English teacher at an eikaiwa I had a middle-aged student who was forced out of his management job by his company due to downsizing. IDK exactly how many years he had worked there but he was given 12 months pay to retire.
You have all the leverage. In case they try to illegally dismiss you you will win in court easily. But it takes on average 12-14 months for your case to be heard. And if they lose in court (which they would), they will have to back pay the entire time it took for the case to go to trial, including their own hefty lawyer fees.
So yes, you can get a year and you should because the market is rough right now.