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In Europe, Cash Eases The Pain Of Getting Fired


Economic Trends

IN EUROPE, CASH EASES THE PAIN OF GETTING FIRED

As some U.S. executives have learned the hard way recently, it's possible for a middle manager who loses his job to come away with little more than a pat on the head and a few weeks' pay. But that's not true in Western Europe. According to William M. Mercer Inc., a benefits consulting firm, relatively high termination benefits in most European countries are set by law and include such items as termination payments and full salary for a notice period during which severed employees are usually not required to show up for work.

Mercer calculates, for example, that a typical 45-year-old European middle manager, with 20 years of service and a salary of $50,000, would be entitled to termination benefits ranging from $94,000 to $130,000 in Belgium, Spain, and Italy--and from $25,000 to $38,000 in the Netherlands, Germany, and Denmark. And that doesn't include extra benefits mandated for group dismissals or embodied in union contracts.

By contrast, Mercer estimates that a U.S. middle manager, earning $50,000 a year with 20 years of service, typically walks away with about 20 weeks severance pay or some $19,000. But the firm also notes that since payments are determined by individual corporate policy, such employees can be legally terminated with nothing more than a handshake.GENE KORETZ


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