I would like to ask about severance pay. My sister had been working for a private company for 5 years and then one day, the board of directors announced that they would need to close down the company in a month because of bankruptcy. The company mentioned that regular employees will be given a severance pay which is not more that 1/2 of their monthly basic pay. We have asked a couple of govt employees and they mentioned that a severance pay should be 1/2 total basic pay per year of service. The employees of this company were confused and utterly disappointed on where this is going to. We are hoping for you help.
Note: Is the amount of the severance pay depends on the reason why the company is closing down? Does filing for a bankruptcy and financial losses makes a difference - pertaining to the amount of the severance and back pay.