Severance pay under Georgian Labor Code (Articles 47-48)
Also known as: Georgia severance pay, Georgia termination compensation, Article 47 Article 48 Labor Code, Georgia dismissal compensation
When an employer ends an employment contract for redundancy, a skills mismatch, long-term incapacity or another objective circumstance (Article 47(1)(a), (f), (i) or (n)), Article 48 gives it two routes: at least 30 calendar days' written notice plus compensation of at least one month's pay, or at least 3 calendar days' written notice plus compensation of at least two months' pay. The employer picks one route; the amounts are never added together and do not grow with length of service.
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 Article 47 grounds trigger compensation under Article 48, how the two notice-and-compensation routes work, and what procedural steps a defensible termination requires.
Which terminations trigger severance
Article 47(1) lists the grounds on which an employment contract can end, and Article 47(5)(a) forbids ending it on any other ground. Only four of those grounds carry Article 48 notice and compensation — the distinction matters operationally and financially.
- Article 47(1)(a) — Economic circumstances, technological or organizational changes that make a workforce reduction necessary (redundancy): compensation OWED (Article 48)
- Article 47(1)(b) and (c) — Expiry of the contract term, or completion of the work the contract was for: no compensation owed
- Article 47(1)(d) — Resignation by the employee: no compensation owed; the employee gives at least 30 calendar days' written notice (Article 48(3))
- Article 47(1)(e) — Written agreement of the parties: no statutory compensation owed (though the parties commonly negotiate one)
- Article 47(1)(f) — The employee's qualifications or professional skills do not match the position: compensation OWED
- Article 47(1)(g) and (h) — Gross breach of duties, or a breach within 1 year of an earlier disciplinary measure: no compensation owed
- Article 47(1)(i) — Long-term incapacity (more than 40 consecutive calendar days, or more than 60 calendar days in total within 6 months, once the employee has used the Article 31 leave), unless the contract says otherwise: compensation OWED
- Article 47(1)(n) — Another objective circumstance that justifies ending the contract: compensation OWED, and the written notice must explain the circumstance (Article 47(3))
- Article 47(1)(j)-(m) — A court ruling that rules out the work, a court ruling that a strike was unlawful, death of the employee or of an individual employer, or the start of the employer's liquidation: no Article 48 compensation
- Probationary contract: Article 48 does not apply to ending it unless the probationary contract says otherwise (Article 17(4))
How much is owed (Article 48)
For the four grounds above, Article 48 gives the employer two routes, and the employer chooses. Route one (Article 48(1)): at least 30 calendar days' written notice, plus compensation of at least one month's pay. Route two (Article 48(2)): at least 3 calendar days' written notice, plus compensation of at least two months' pay. The routes are alternatives, not a sum, and the Code does not scale the amount by length of service. The employment contract may specify more (and frequently does, for senior or specialist roles). The Code does not spell out how "one month's pay" is computed; Article 41(1) defines pay broadly as any remuneration received for the work, in money or in kind, so check the contract before leaving regular allowances out of the base.
Procedural requirements for a defensible termination
- Written notice of termination (Article 48(1) or (2)), best practice citing the specific Article 47(1) ground — for ground (n), the notice must explain the objective circumstance (Article 47(3))
- Either at least 30 calendar days' notice with at least one month's compensation, or at least 3 calendar days' notice with at least two months' compensation
- Final settlement of all owed amounts — unpaid wages, unused leave (Article 31(5)), the compensation, any contractual bonuses — within 7 calendar days of termination unless the contract or law says otherwise (Article 44)
- Return of company property and final documentation handoff
- Written reasons ready on request: the employee may ask within 30 calendar days of the notice, and the employer must answer in writing within 7 calendar days (Article 48(4)-(5))
- Internal documentation of the economic, technological or organizational reason if termination is under Article 47(1)(a) — if the employer does not give written reasons on time, the burden of proving the facts in court falls on it (Article 48(7))
Common employer mistakes
- Citing Article 47(1)(a) (redundancy) without documentation of the actual economic, technological or organizational reason — once asked, the employer has only 7 calendar days to give written reasons (Article 48(5))
- Giving only 3 days' notice but paying one month — the short-notice route requires at least two months' pay (Article 48(2))
- Budgeting 30 days' notice plus two months' pay as the legal minimum, or scaling the payment by years of service — the Code does neither; the two routes are alternatives
- Calculating compensation from base salary only without checking the contract — Article 41(1) defines pay broadly
- Paying late — the final settlement is due within 7 calendar days of termination (Article 44), and each day of delay costs 0.07% of the delayed amount (Article 41(4))
- Treating unused leave as forfeited — on an employer-initiated termination it must be paid out in proportion to the length of employment (Article 31(5))