Compensation is the act and consequence of compensating : providing, generally through money , compensation for harm or damage . The amount or thing used for this purpose is also called compensation.
For example: "The injured worker filed a lawsuit against the company since he has not yet received the compensation that corresponds to him" , "The State will grant compensation to the woman who was shot by a police officer by mistake" , "For now I remain with the compensation money they gave me when they fired me from work ."
There are various types of compensation. Severance compensation is paid by an employer to an employee when he or she dismisses him or her without cause. The characteristics of this compensation depend on the employment contract and the legislation of each nation .
Typically, compensation is linked to the number of years that the employee has been working for the company in question. The greater the seniority, the greater the compensation.
In Argentina , to cite one case, severance pay is equivalent to one month's salary for each year worked or for a fraction exceeding three months, based on the best remuneration received by the worker in the last year.
With respect to Spain, on the other hand, a dismissal considered unfair by the employee gives him the right to demand the payment of compensation, which also depends on the type of contract he has entered into with the company.
Severance compensation protects the worker and contributes to their job stability. However, when flexibility laws are promoted, compensation is sought to be reduced and even canceled with the aim of minimizing the costs of business owners.
We often see stories in the media about workers who cause their own layoffs with the main objective of collecting compensation, in addition to the aid that the government offers to unemployed people to support them in their search for a new job. .
Although this practice is absolutely illegal, there are many cases of dismissals caused by the employees themselves. When the situations that eventually lead to the breach of the contract have been coldly and meticulously planned, it may seem that it is a mere lack of compatibility between both parties; However, in general it is a series of clearly forced frictions, of clashes between the employee and his superiors that reach a peak at which it is impossible to continue with the collaboration.
In a situation of this type, companies can launch investigation mechanisms to try to find the truth and exempt themselves from the obligation to pay. The sworn statement of other workers and the scrutiny of messages between the employee and his superiors are two of the resources that can be used to prove fraud.
There is a document called settlement , which is signed by a worker and the company for which he works with the objective that the former ceases his work activities after collecting an amount of money. One of the conditions that must be met is to have had a permanent position, which means that this document excludes any person on a probationary period, for example.
Although many people confuse them, settlement and compensation are different things. For example, severance pay is not always paid but only when the company decides to let go of the employee, while termination can be carried out in the opposite case.
Compensation for damages , meanwhile, must be paid to the victim by the person who caused the harm. In this way, reparation is intended to be achieved through a monetary disbursement.