severance pay

American  

noun

1. money, exclusive of wages, back pay, etc., paid to an employee who has tenure and who is dismissed because of lack of work or other reasons beyond the employee's control.

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severance pay British  

noun

1. compensation paid by an organization to an employee who leaves because, through no fault of his own, the job to which he was appointed ceases to exist, as during rationalization, and no comparable job is available to him

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Etymology

Origin of severance pay

First recorded in 1940–45

Example Sentences

Unionized workers at Diageo’s plant in Amherstburg in December ratified a closure agreement that provided enhanced severance pay.

From The Wall Street Journal

The draft law reduces severance pay, allows payments in kind and restricts vacation usage, among other proposals that the General Confederation of Labor considers "regressive."

From Barron's

People who did not move to another role received severance pay based on how long they had worked at the company.

From BBC

In August, Mr Musk and X agreed to settle a separate lawsuit filed by roughly 6,000 former rank-and-file Twitter employees who argued they were owed $500m in severance pay.

From BBC

But Twitter only gave sacked workers at most one month of severance pay, while some did not receive anything, according to the lawsuit.

From BBC