Where runs the line between being entitled to severance pay and having to go without it? It is not enough for an employer to label an organizational change as “elimination of the given position.” What matters is whether the job has actually been eliminated – and this very point has been clarified by the Supreme Court in a recent ruling.
How to Determine Whether a Job Position Has Been Actually Eliminated
In its decision (Case No. 21 Cdo 3286/2024), the Supreme Court addressed the circumstances under which a job position can be considered to have been actually eliminated.
What matters is not the formal designation of the change, but the actual situation. The key factor is the substance of the work performed by the employee.
If a new employee takes over a previously “eliminated” position and performs the same work, and be it within different working hours, one cannot say that the position has been eliminated.
When the right to severance pay does not arise
The right to severance pay does not arise in a situation where the position has not actually been eliminated.
This is the case in particular when:
- the position continues to exist within the organizational structure
- it is filled by another person, or
- only the conditions have changed (e.g., the scope of employment).
In such a case, the condition of an actual organizational change is not met.
Even long-term vacancy does not mean the position has been eliminated
The court also addressed situations where a position remains vacant for an extended period.
This fact alone does not mean the position has been eliminated. The decisive factor is whether the employer is demonstrably striving to fill it, for example, by actively seeking candidates.
If so, the position still exists from a legal standpoint.
| WHAT TO WATCH OUT FOR IN PRACTICE To establish a claim for severance pay, it is necessary to prove: → the actual elimination of the position → the existence of an organizational change, and → a direct link between this change and the termination of employment If these conditions are not met, no entitlement to severance pay arises. |
The difference between a dispute over severance pay and a dispute over the invalidity of termination
In conclusion, it is important to emphasize that the case in question concerned only the entitlement to severance pay, not the invalidity of the termination.
The fact that the job position did not cease to exist has different consequences in these two types of disputes:
- for the entitlement to severance pay, a finding that the job position exists is grounds for dismissing the action for performance; in a dispute over the invalidity of termination, this means that no grounds for termination were given and the employment relationship continues.
Author: Matěj Rendl, Legal Assistant, LYNX (Czech Republic)
Source: Judgment of the Supreme Court of 11 December 2025, Ref. No. 21 Cdo 3286/2024
