What is the compensation given to an employee terminated from employment due to authorized causes called?

The compensation given to an employee terminated from employment due to authorized causes is referred to as separation pay. This term typically encompasses the financial benefits owed to an employee when their employment ends under circumstances specified as authorized by law or company policy.

Separation pay serves as a form of financial support to help employees transition after losing their job due to valid reasons, such as redundancy, retrenchment, or other causes that are not attributable to employee misconduct. The pay is designed to assist the affected employee during their period of unemployment while they seek new employment opportunities.

In contrast, other terms such as separation allowance or unemployment compensation may have different contextual meanings or legal frameworks associated with them. Separation allowance often refers to a specific type of benefit under certain conditions, while unemployment compensation typically pertains to government-provided financial assistance for individuals who lose their job without cause. Understanding these distinctions is essential for grasping the implications of each term in employment law and practice.