Since July 1, 2015, financial compensation can be received for dismissal, a.k.a. transition allowance (Transitievergoeding). It applies to both permanent and temporary employees, and it is intended to help them find another job. The condition is that the person has been employed for at least two years.
The amount of the transition allowance if one is laid off is determined by two components: the monthly salary and the number of years one has been working at the company. The maximum amount that can be given is either the annual gross salary, or a maximum of €76,000 (if the gross annual salary is less than that amount).
The employer must inform the dismissed employee about the amount of the transition fee and/or services the employee is entitled to. If the employee opts for the transition allowance, then within four weeks of receiving the information, he or she must waive the right to compensation and facilities in writing. Otherwise, it will expire on the transition allowance.
If the employee does not inform the employer about the level of fees and services, and the employee has waived the right to it, then he or she can revoke the decision in writing within four weeks.
Entitlement
If an employee is fired, then the company pays the transition compensation (when the employee has been employed by them for a period of two years or longer). This also applies if the temporary contract is not renewed. The employee is also entitled to a transitional allowance if he or she resigns or does not renew a temporary contract.
There are a few conditions that should be met in order to receive a transitional allowance. Here are some cases where the employee is not entitled to a transition allowance:
• He or she has been in service for less than 2 years.
• He or she is fired for a seriously culpable act or omission by himself/herself.
• At the resignation, he or she is 18 years old and has worked an average of no more than 12 hours per week.
• He or she is fired having reached the retirement age.
• The employer is bankrupt, moratorium, or debt-restructuring scheme for natural persons is applicable to the employer.
• In the collective agreement, there is an equivalent provision for a transition allowance included.
• If he or she has entered into another temporary contract before the (legal) termination of a temporary contract. The condition here is that the new contract takes effect after the termination of the previous contract (and may be prematurely terminated) after a maximum of six months.
• If the employer offers a similar contract before the end of the employee’s temporary contract.
• If the employer offers to extend the temporary contract before the current contract expires. It does not matter whether the employee accepts the offer or not.
If the employer is to blame for the resignation, then the district court may grant an additional allowance on top of the transition allowance. If this is the case, but the employee has been employed for less than 2 years, the court can still give compensation despite not being entitled to the transitional severance payment.
By Alexander Morrison