Severance pay under Georgian Labor Code (Articles 47-48)
Also known as: Georgia severance pay, Georgia termination compensation, Article 47 Article 48 Labor Code, საქართველო კომპენსაცია გათავისუფლებისას
When an employer terminates an indefinite-term employment contract under specific grounds in Article 47 (most commonly: business reasons / redundancy), Article 48 requires the employer to pay the employee severance equal to at least one month's wages — in addition to honoring the 30-day notice period or paying in lieu of it.
Severance is the single most-disputed area of Georgian employment termination. Foreign employers operating in Georgia frequently default to "at-will" thinking imported from US practice and skip both notice and severance; domestic employers sometimes assume severance applies only at retirement. Both assumptions are wrong. This article walks through which terminations trigger severance under Articles 47-48, how the amount is calculated, and what procedural steps a defensible termination requires.
Which terminations trigger severance
Article 47 lists the grounds on which an employer may terminate an indefinite-term contract. Not all grounds trigger severance — the distinction matters operationally and financially.
- Article 47(a) — Mutual agreement: no statutory severance owed (though the parties commonly negotiate one)
- Article 47(b) — Expiration of fixed-term contract: no severance owed
- Article 47(c) — Probation termination: no severance owed (within the 6-month probation cap)
- Article 47(d) — Business reasons / redundancy / company restructuring: severance OWED (Article 48)
- Article 47(e) — Long-term incapacity preventing work: severance OWED
- Article 47(f) — Death of the employee: not applicable
- Article 47(g) — Force majeure: typically no severance owed
- Article 47(h) — Gross breach by the employee (misconduct, repeated minor breaches after warning): no severance owed
How much is owed (Article 48)
Article 48 sets the severance amount at not less than one month's wages. The employment contract may specify more (and frequently does, for senior or specialist roles). The "one month's wages" benchmark is the employee's most-recent monthly compensation, including regular allowances and base bonuses. Variable compensation (sales commissions, year-end bonuses) is typically excluded from the base for severance unless the contract specifies otherwise. Severance is paid in addition to the 30-day notice period — either the employee works the notice and gets paid normally during it, or the employer pays in lieu (PILON) and adds the severance on top.
Procedural requirements for a defensible termination
- Written notice of termination citing the specific Article 47 ground
- 30 calendar days' advance notice (unless ground is misconduct or probation)
- Severance payment (when applicable) made at or before the termination effective date
- Final settlement of all owed amounts: unpaid wages, accrued leave compensation, severance, any contractual bonuses
- Return of company property and final documentation handoff
- Internal documentation of the business reason if termination is under Article 47(d) — the burden is on the employer to substantiate this in court if disputed
Common employer mistakes
- Citing Article 47(d) (business reasons) without documentation of the actual business reason — most-overturned ground in labor court
- Skipping the 30-day notice on a ground that requires it — converts the termination into wrongful and triggers additional damages
- Calculating severance from base salary only when the employee had regular allowances that should be included
- Paying severance at the end of the notice period instead of at termination effective date — late-payment damages apply
- Treating a long-tenured employee's leave-balance carry-over as forfeited — must be paid out at termination
Frequently asked questions
- How much severance pay is required by law in Georgia?
- At least one month's wages under Article 48, on top of the 30-day notice period. The employment contract may specify more.
- Which terminations require severance pay?
- Employer-initiated terminations under Article 47(d) (business reasons / redundancy) and Article 47(e) (long-term incapacity). Terminations for cause (misconduct), during probation, on expiration of fixed-term contracts, or by mutual agreement do not statutorily require severance — though parties often negotiate one in mutual-agreement cases.
- Is severance pay calculated from gross or net wages?
- Gross. The "one month's wages" benchmark is the employee's most-recent gross monthly compensation, with statutory deductions applied to the severance amount the same way they apply to regular wages.
- When must severance be paid?
- At or before the termination effective date. Paying severance later than the effective date triggers late-payment damages under Article 32.
- Can severance be waived by the employee?
- Statutory severance under Article 48 is generally not waivable by individual agreement — but parties commonly negotiate enhanced separation packages that include broader release language. The base statutory severance must always be paid when owed.
- What happens if the employer skips severance?
- The employee can file a labor-court claim within statutory time limits. Likely outcomes: order to pay the owed severance plus late-payment damages, finding of wrongful termination if procedural steps were also skipped, possible reinstatement order, and attorney costs.