Case:


Ruling : There is a binding local practice requiring severance pay. This is proper in that it is in the spirit of the halachic concept of ha’anaka (a gift to a departing Jewish servant). The Sefer Hachinuch (#482), in explaining that one should not have someone who worked for him leave empty-handed, says that one can extrapolate that it is also proper for the employer of a paid worker for various lengths of time to share with him when he leaves from the blessing that Hashem bestowed on the employer. Therefore, if the firing was improper, pl deserves severance pay.
It is generally forbidden to do work on Chol Hamoed, although Rishonim differ whether this prohibition is from the Torah or rabbinic. The Rambam (Yom Tov 7:1) says it is rabbinic, "so that it should not be like regular days that do not have any sanctity." Tosafot (Moed Katan 18a) and the Rosh say that it is from the Torah, while the Rabbis formulated the details.
The Shulchan Aruch (Orach Chayim 542:1) rules: "Even work that is permitted can only be done for oneself or for others for free. However, if it is done for a salary, it is forbidden." This includes cases where one may do work to avoid a loss of money, but the work may not be done for pay. The exception to the rule is that a poor worker who doesn’t have what to eat can get paid. This exception is for the worker’s benefit, and he cannot be forced to work because of the prospect of someone else’s loss.
The Rama (ad loc.) says that for a loss, one can work even for a set price. Beit din explained the Rama’s ruling according to the following Gra. Just like an employer can employ a worker with pay because of the latter’s financial needs, so too a worker can work on behalf of an employer for the employer’s financial need (the loss). The poskim argue whether a worker can work because of the threat of firing by his employer. The Chayei Adam (106:12) says that this is not considered a loss of money. However, the Shevet Halevi (OC 183) and Rav Ovadya Yosef (see Yalkut Yosef, Chol Hamoed 43) say that this is the type of loss that justifies working on Chol Hamoed.
However, as mentioned, these factors affect the worker’s decision to work and do not justify def’s decision to fire him for his refusal. Therefore, due to the firing, pl deserves severance pay. [The amount was reduced from the maximum because of a compromise that took the parties’ relationship into account.]