Only within limits. Article 6 of Law No. 5953 allows severance pay to be divided where the employer cannot pay it in one go because of financial impossibility — but the article sets both a ceiling on the number of instalments and a ceiling on the period.
The Limits
| Element | Limit |
|---|---|
| Ground | Financial impossibility on the part of the employer |
| Maximum number of instalments | Four |
| Maximum total period | One year |
The Ground Matters
The article does not create a free option to pay by instalments. The ground is stated: financial impossibility. An employer with the means to pay cannot rely on this provision simply as a matter of cash-flow preference.
The Underlying Debt Does Not Change
Instalments change the timing of payment, not the amount. Severance remains one month's wage per year of service or part of a year on the last monthly wage, with seniority running from first entry into the profession.
The calculation is covered in the severance article.
What If It Is Not Paid?
Under Article 26(b) an employer who does not pay the compensation under Article 6 is subject to an administrative fine, and the compensation is additionally paid to the person entitled. Failing to keep to an instalment plan therefore does not reduce the debt; it adds a sanction on top of it.
Other Payments at Termination
Severance is not the only item due at termination. Article 6 also requires the pay for unused annual leave to be paid in advance, and provides that the last day of the notice period is taken into account for compensation and does not count as annual leave.
Bottom Line
Severance pay may be divided into at most four instalments over a total of one year, and only where the employer is financially unable to pay in one go. The instalment arrangement changes the timing, not the amount, and failing to keep to it triggers the administrative fine in Article 26(b) on top of the debt itself.