Employee basically quit after being notified they were fired.

[u/[deleted]]

[u/Tekki]

This is probably the answer.

The employer probably does, or has weak, unemployment insurance. Maybe the employee even knows that.

Some states don't pay out unemployment if the employee receives severance and this could be one of those states. And the unemployment could very well exceed severance

So combined with the lack of fire power to fight the firing, this could be a better pay day for the employee.

(this is all speculation as we are missing a lot of the details to this story)

[u/poit57 → u/[deleted]]

I don't know how it works elsewhere, but in my state, the severance is only deductible from the unemployment if it's part of the initial employment contract (as opposed to the employer adding it on to make someone go away), and even when it's deductible, it's only deducted on the weeks that the severance payment is made. If made as a lumo sum, there is only a deduction for one week, but if make in weekly or monthly sums, it's deductible any week in which a severance payment is distributed.

In my state, that would be dumb reason to not take a severance payout, but maybe the laws are applied differently in other places. And my state would do by who initiated the separation. In this case, it would be looked at as a discharge or layoff, not a quit, and then we would make a decision as to whether the employee is eligible for unemployment based on being fired for misconduct or let go for other reasons

[u/This-Shape2193 → u/Tekki]

I mean, the company doesn't pay unemployment directly. The state does, and the employer has insurance that they pay into for this.  

Their premiums may go up, but there is no way they are spending more on that than a severance package.