This brings an end to the long standing practice for parties to determine remuneration on the basis of the “cantonal judge formula”. In case of a termination agreement from a legal point of view, thereis no obligation to pay the transition fee. Parties themselves are expected to agree on the terms and conditions. The “cantonal judge formula” is still expected to be of use. Also, redundancy schemes, social plans, are often based on it.
For an employer, it is important to keep this in mind. It is also good to know that more (transitional) legislation have become available to clarify matters and/or accommodate certain objections.
For example, after 1 July 2015, one could think of cases in which an employee will be entitled to the transition allowance but also to other termination fees or facilities on the basis of a social plan, collective agreement or on the basis of the individual employment agreement, concluded prior to 1 July 2015. To avoid double payment, transitional legislation is proposed. The main features are: Arrangements with associations of workers, such as in a collective agreement and/or social plan, which do not take into account the transition allowance, will in principle prevail (until ultimately 1July 2016). If the employee is eligible for transition allowance and also other compensation based on the individual employment contract, he can choose. It will be the duty of the employer to inform the employee and give a two week reflection period. Although this is not yet final legislation, it is advisable for employers to pay attention to anti-cumulation matters, especially in case of a reorganisation.
Another aspect of the new law is that the expenditure incurred to contribute to the employment or mediation from one job to another, may be deducted from the transition allowance by the employee. The (draft) rules in this respect are not so generous for the employer. What can be deducted are costs aimed at promoting the broad functionality of an employee, aimed at preventing or reducing unemployment. Reference is made to costs incurred during five years before the end date, which may be extended. The main condition is that the employees consent to making such costs and to the deduction thereof.
There is also more information available on the calculation of the compensation for breach of the notification duty and the transition fee. In December 2014, a decision on the content of wage was published as well as the regulation on (fixed and variable) wage components and the calculation of working time (in exceptional situations, for example, illness, leave and strike). The wage concept forthe transition fee includes more than in case of breach of the notification period, so it seems. Make sure to take this into account when it comes to determining the amounts.
Finally, further regulation is expected – for example, measures were announced to prevent employees, especially, seasonal workers who might be denied new temporary contracts because of the built up entitlement to the transition allowance.
Feel free to contact us for assistance or advice.
Ruig+Partners advocaten
Anna Kielczewska
www.ruigpartners.nl