Are you being dismissed because your employer is restructuring, cutting costs or scaling back operations? In most cases, you are entitled to a redundancy payment (transitievergoeding). Yet many employees are unsure of their exact position, how the procedure works and what amounts they can expect. This article explains it step by step.
When does an economic redundancy apply
Economic redundancy is not about your performance or conduct, but about circumstances within the business itself. Think of declining turnover, a structural reduction in work, automation or the closure of a branch. It must always involve a enduring change A temporary reduction in work due to an exceptional situation does not give your employer the right to dismiss you.
Examples of valid business economic grounds include:
- A persistently poor financial position of the company
- Organisational changes such as a merger or demerger
- Relocation or complete closure of (part of) the business
- Loss of employment owing to technological advancements or automation
- Structural cost-cutting measures resulting in the permanent elimination of posts
Your employer must always be able to substantiate these grounds with concrete figures and a plan. Without adequate substantiation, the UWV will not grant permission.
How the dismissal procedure works
In practice, there are two routes for economic redundancy. The first is the formal UWV dismissal procedure: your employer applies to the UWV for a dismissal permit. The UWV then assesses whether the economic grounds are sufficiently substantiated, whether the mirror-image principle (afspiegelingsbeginsel) has been applied correctly, and whether redeployment to another suitable role is genuinely not possible.
The second route is dismissal by mutual consent via a settlement agreement (vaststellingsovereenkomst). Many employers deliberately choose this route because it is faster and provides more certainty than a UWV procedure. As an employee, it is important to know that in such a case you should never simply sign without having the contents properly reviewed.
The mirror-image principle protects you
No, your employer cannot simply select you for redundancy. Where there are multiple comparable roles, the mirror-image principle must be applied. This means employees are grouped into age categories, and within each category the employee with the shortest length of service is the first to be considered for redundancy. This prevents arbitrary selection and ensures a balanced spread across the different age groups.
If the mirror-image principle has not been applied correctly, you can challenge this, even after the UWV has already granted permission.
Your entitlement to a redundancy payment
When you are made redundant due to economic reasons, and it's initiated by your employer, you are, in principle, entitled to Redundancy Payment. This applies from the very first working day, even with a short length of service.
The amount is calculated on the basis of two factors: your gross monthly salary and the duration of your employment. The formula is straightforward: for each full year of service you accrue one third of your gross monthly salary. Partial years are included on a pro-rata basis — calculated to the day.
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Plan a conversationIn 2026, the statutory maximum redundancy payment is set at €102,000 gross. If you earn more than €102,000 per year, your gross annual salary serves as the upper limit.
Exceptions and collective agreement provisions
There are situations in which you cannot claim a redundancy payment, even in cases of economic redundancy. These include dismissal after reaching state pension age, or where the company has become insolvent.
A particular point to note in economic redundancies is the collective labour agreement (CAO). Some collective agreements provide that employees made redundant for business economic reasons receive an Alternative provision instead of the statutory redundancy payment. Such a provision must be aimed at preventing or shortening a period of unemployment, or must include reasonable financial compensation. Please note: this applies exclusively to dismissal on business economic grounds. For all other grounds of dismissal you can always claim the statutory redundancy payment, even if your collective agreement suggests otherwise.
What you can check and do yourself
Facing economic redundancy? Here are the steps you can take straight away:
- Check the grounds for dismissal: Is there truly a structural and lasting change, or is it a matter of temporarily reduced work?
- Request substantiation. Your employer must demonstrate the business's economic necessity with concrete documentation such as annual accounts and forecasts.
- Have the mirror-image principle reviewed: Are you the right person to be selected for redundancy?
- Has redeployment been explored? Has a reasonable effort been made to find another suitable role for you within a reasonable period, including retraining if necessary?
- Calculate the redundancy payment: Are the figures your employer has quoted correct, and has everything been taken into account in the calculation?
- Do not sign immediately: With a settlement agreement, you have the right to have the document reviewed before you sign it.
- Keep an eye on deadlines. If you wish to challenge a dismissal permit that has been granted, you only have two months to apply to the cantonal court.
Why Labour Lawyer Eindhoven
Economic redundancy often feels sudden and overwhelming. At Arbeidsjurist Eindhoven we know the local labour market and understand exactly what to look out for: from the correct application of the mirror-image principle to calculating your redundancy payment and reviewing a settlement agreement. We help employees in Eindhoven and the Brabant region to make full use of their rights, without it needing to be a drawn-out ordeal.
Would you like to know how strong your position is? Get in touch for a no-obligation initial consultation – we'd be happy to talk it through with you.
Frequently asked questions
Are you always entitled to a redundancy payment in the event of economic redundancy?
In principle, yes, provided the initiative to dismiss lies with your employer. That right applies from the first working day. There are exceptions, such as dismissal after reaching state pension age or in the event of insolvency. Also check whether your collective agreement provides for an alternative arrangement, as this may in certain circumstances replace the statutory redundancy payment.
The maximum statutory redundancy pay is capped at €17,187.
In 2026 the statutory maximum redundancy payment is €102,000 gross. If you earn more than €102,000 per year, your gross annual salary serves as the upper limit. The payment is calculated on the basis of your gross monthly salary and the exact duration of your employment: one third of your gross monthly salary for each full year of service.
Can my employer choose freely who to make redundant during a reorganisation?
No, not without restriction. Where there are multiple interchangeable roles, your employer must apply the mirror-image principle. Employees are grouped into age categories, and within each category the person with the shortest length of service is the first to be considered for redundancy. If your employer has not done this correctly, you can challenge the dismissal.
Can I challenge a dismissal decision made by the UWV?
Yes. If the UWV has granted a dismissal permit and you disagree with this, you can submit an application to the cantonal court within two months. The court can then assess whether the grounds for dismissal are sound and whether you are entitled to a higher or additional payment.
What if my employer offers a settlement agreement instead of going through the UWV procedure?
This is a commonly used route in economic redundancy cases. You are never obliged to sign immediately. Always have the agreement reviewed by an employment lawyer, so that you know whether the redundancy payment has been calculated correctly, whether there are any unfavourable clauses, and whether there is room to negotiate.
We're happy to help you brainstorm ideas. For advice tailored to your specific situation, we'd be happy to sit down with you. No rights can be derived from the content of this page and it may contain inaccuracies.
