What is Employment Termination Code?

An employment termination code is a numeric entry that officially states why an employee's employment contract ended and is reported to the Social Security Institution (SGK). For every departure, the employer submits an exit declaration to SGK using one of these codes.

Why It Matters

The termination code is critical not only for the employer but also for the employee, because the following depend directly on it:

• Whether the employee is entitled to severance and notice pay,
• Whether they can apply for unemployment benefits,
• How the reason for leaving appears in SGK records.

Sample Termination Codes

• 03 – Termination of an indefinite-term employment contract by the employee (resignation)
• 04 – Termination of an indefinite-term employment contract by the employer without just cause
• 22 – Other reasons (such as the company relocating or closing)
• 29 – Termination by the employer because of the employee's conduct against morality and good faith

The Effect of a Wrong Code

Reporting the wrong termination code can have serious consequences for the employee. For example, if an employee who was in fact dismissed unfairly by the employer is recorded as "resignation" (03), they may lose both their compensation and their unemployment benefit rights.

Conclusion

The termination code is an important "official record" tool in working life. Codes must be chosen correctly so employees do not lose their rights. Both employers and employees knowing what these codes mean is essential for a transparent and fair process.