The basic idea was to extend the "company neutrality” already anchored in the construction worker’s leave arrangements also to the severance pay.
This means that the employment periods at different companies are totalled to calculate the severance pay claim.
The severance pay arrangement pursuant to BUAG has been in force since 1 October 1987.
Severance pay serves various socio-political purposes:
- Provision for possible unemployment following termination of the employment relationship
- Loyalty bonus for long-term service
- Share of the company’s fortunes, to which the worker contributed
- Bridging of reduced income period due to loss of employment
- Compensation for loss of productivity resulting from extended employment in a specific company