Soon there will be exhaustive list of grounds for dismissal and compulsory routes. Dismissal for economical reasons or because of long-term incapacity (illness) to work will be dealt with by the UWV (or (new) an own dismissal commission set up in a Collective Labour Agreement). In case of other grounds for dismissal, e.g. disfunctioning, the employer must request the court to terminate the contract.
Contrary to current law there will be appeal possibilities. Moreover, the new dismissal law will bring an end to court practice in which insufficient substantiation of the termination ground (e.g. lack of enough evidence/file) could translate into a higher compensation and the employment contract is terminated after all. Also training is expected to play a bigger role in dismissal cases. A legal duty to offer training to employees will be introduced.
Currently the court, unlike the UWV, may award the employee a severance payment. Usually the amount is calculated according to established dissolution standards (cantonal judge formula). One of the biggest changes is the introduction of different compensation regime. As from 1 July 2015 there is a statutory entitlement to a transition allowance, if (i) the total length of service amounts to not less than 24 months and (ii) the employment contract is involuntarily terminated. In principle it must always be paid in case of termination or non-renewal at the employer’s initiative, unless there is seriously culpable misbehavior of the employee (e.g. stealing, fraud).
In general it amounts to 1/6 of monthly salary for every six months service for the first ten years, and thereafter 1/4 of gross monthly salary for every six months. The cap is EUR 75,000 or one annual salary if that is more. It will effectively almost always lead to not much more than one third of a ' neutral ' reward on the basis of the current formula. Only in case of serious culpable acts or omissions of the employer an additional severance payment can be granted. There are many exceptions (e.g. for minor employees with an average period of work of 12 hours a weeks or for employees who reach the retirement age) and transitional law (for small companies and older employees). Also the impact of lower legislation is unknown.
Please note that an employee whose employment contract ends on e.g. 31 July 2015 could be entitled to a transition fee, as months worked before 1 July 2015 count for the 24-month requirement and for the calculation of the level of allowance.
If the employee agrees to his dismissal in writing, no proceedings have to be followed. Starting point is meant to be obtaining such written consent. Also parties can still close a amicable agreement as regard the departure and the terms thereof. New is that an employee may withdraw his consent, without giving any reason, within 14 days.
With this in mind timing can make a difference and specific attention is required for (long term) redundancy policies and social plans.
This is just a general outline of the main changes and part of the picture. If you wish to receive more detailed information or advice, please contact us.
Feel free to contact us for assistance or advice.
Ruig+Partners advocaten
Anna Kielczewska
www.ruigpartners.nl