Severance/redundancy payments increase with seniority (WoL, V2)

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Quick info
Data type Numeric
Scale Metric
Value labels Not applicable in the strict sense since the scale is quasi-metric, but for coding the following values were used for orientation:
  • 1 = the statutory law provides increasing steps each year of service
  • 0.67 = the statutory law provides increasing steps for each year of service but are capped
  • 0.33 = the statutory law provides increasing steps only once
  • 0 = the statutory law do not provides increasing steps / equal for all workers concerned

New template for Version 2 adds: further gradations between 0 and 1 reflect changes in the strength of the law

Technical name labor_priv_sen_pay
Category Labour and labour market
Label Severance compensation increases with seniority
Related indicators

This WoL indicator measures whether and in which steps the severance pay due upon termination of the labour contract increases with progressive length of service.

Labour law not only protects workers, but also creates segmentation, by privileging the standard employment relationship through higher standards of protection. The standard employment relationship is the classic model of the permanent, full-time employee with long-term employment with one employer. Other forms of work – part-time, temporary agency work, work under a fixed-term contract, frequent changes of employee – receive less protection, even though the employment relationships in which they are found already inherently entail greater social risks. This leads to a further disadvantage for employees who are already in a precarious position.

Length of service is a common factor used for prioritisation. However, the purpose of prioritisation is not to protect older employees, who are assumed to have a harder time finding a new job – after all, the prioritisation of length of service is almost always capped after about ten years. The situation of employees who have to change employers frequently is socially more precarious than that of those with many years of service. The purpose of prioritisation is thus evidently not to provide special protection, but to cement the standard employment relationship.

Employees are existentially dependent on the income from their employment relationship, so termination of this by the employer also means the termination of the employee's ability to make a living. A mandatory severance payment upon termination somewhat cushions the consequences for the employee and provides them with a financial bridge from which they can look for other paid work. The higher the severance payment to be made, the greater the protection.

Coding rules

Equals 1 if severance/redundancy payments expectable by statutory law increase in steps for duration of service (e.g. for each year of service); equals 0.67 if severance/redundancy payments expectable by law increases in steps for duration of service (e.g. for each year of service) but are capped; equals 0.33 if severance/redundancy payments increase by seniority only once; equals 0 if severance/redundancy payments expectable by law are equal for all workers concerned or do not exist. Scope for further gradations between 0 and 1 to reflect changes in the strength of the statutory law.
For detailed coding rules, please consult Fechner/Carlino 2025.

Bibliographic info

Citation: Fechner, Heiner and Marina Carlino (2025). Worlds of Labour (WoL) Leximetric Dataset. University of Bremen.

Related publications:
  • Mückenberger, Ulrich, 1985. "Die Krise des Normalarbeitsverhältnisses - Hat das Arbeitsrecht noch Zukunft?" Zeitschrift für Sozialreform 31: 415-434; 457-475
  • Mückenberger, Ulrich, and Simon Deakin. 1989. "From Deregulation to a European Floor of Rights: Labour Law, Flexibilisation and the European Single Market." Zeitschrift Für Ausländisches Und Internationales Arbeits- Und Sozialrecht 3: 153–207.
  • Carlino, M., Fechner, H., & Schäfer, A. (2024). Using leximetrics for coding legal segmentation in employment law: The development and potential of the Worlds of Labour database. In I. Dingeldey, H. Fechner, & U. Mückenberger (Eds.), Constructing Worlds of Labour. Coverage and Generosity of Labour Law as Outcomes of Regulatory Social Policy. Palgrave Macmillan.

Misc

Project manager(s):
Responsible for data coding: Heiner Fechner (2018-2025)
Responsible for data editing and entry: Heiner Fechner (2024-2025), Andrea Schäfer (2021-2025), Jean-Yves Gerlitz (2018-2020)
Principal Investigators: Irene Dingeldey, Ulrich Mückenberger
Student assistants (2018-2025): Julia Bode, Jessica Bonn, Daniel Euler, Maxime Fischer, Jan-Christopher Floren, Jennifer Götte, Désirée Hoppe, Irina Kyburz, Alexandra Kojnow, Tarek Mahmalat, Karolin Meyer, Johanna Nold, Tanusha Pali, Johannes Ramsauer, Max Sudhoff, Kristina Walter, Caroline Zambiasi.

Data release:
  • Version 0.001: Initial release

Revisions: No revisions yet.
This is the first version of the dataset of the thoroughly revised Version 2 WoL template; for the first time, all variables including those originally stemming from CBR-LRI have been coded/revised under WoL criteria. A preliminary version with compiled data (CBR-LRI and WoL) has been published in WeSIS marked by "CBR-LRI-based" and "WoL, V1".

Sources

Own coding.
Fechner, Heiner, and Marina Carlino (2025). Coding Legal Segmentation in Employment Law. The Worlds of Labour (WoL) Dataset. SFB 1342 Technical Paper Series, 22. Bremen: SFB 1342. https://doi.org/10.26092/elib/4191


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