You are entitled to a transition fee or can negotiate a severance payment. The difference between these compensations is that the transition fee is set by law. Severance pay is not regulated by law. The transition compensation is a right to which the employee is automatically entitled in certain situations. Namely, when the employer terminates or does not renew the employment contract.

The severance payment (or terminations compensation) may be based on the outcome of the statutory transition fee but it does not have to be. The severance payment agreed between the parties may be higher or even lower than the statutory transitional fee.

First, you need to determine the monthly salary, which consists of the base salary + fixed and variable salary components. Then you need to determine the working hours (date of employment and expected end date). Based on this information you can calculate the severance pay. When determining the working hours, the period that you performed work for the employer through a temporary employment agency should also be included.

In the situation where the employer may terminate the employment contract with the permission of the UWV or the subdistrict court, you cannot negotiate about the transition fee. Then the right to the transition fee calculated according to a fixed formula arises automatically.

However, you can negotiate the severance pay and other conditions in case the employer offers a settlement agreement. The settlement agreement can include a higher or lower transition compensation (= severance pay).

If the employee terminates the employment contract himself, then he is not entitled to transition compensation. There are also exceptions to the right to transition compensation.

1. If the dismissal is the result of seriously culpable actions (summary dismissal)
2. If the employee is younger than 18 and works a maximum of 12 hours per week
3. If the employee reaches retirement age
4. In case of bankruptcy or suspension of payments of the employer

In these 4 cases, the employee is not entitled to the transition compensation.

The statutory transition compensation is composed of three calculations.

1/3 monthly salary for all full years of service
1/36 monthly salary for the remaining full months of service
1/1095 monthly salary for the remaining days
After 2 years of illness, the employer may terminate the employment contract after receiving permission through the UWV or may choose to enter into a settlement agreement. In both cases, the employee can claim the statutory transitional compensation.

In the blog sick leave and transition compensation, you can read all about what rights an employee has when he leaves employment sick.

The employer does not have to pay a transition fee if the employee gives notice himself. Not even in the situation where the employee is summarily dismissed due to seriously culpable actions. If the collective bargaining agreement contains a substitute provision that replaces the statutory transitional compensation, the employer does not have to pay any transitional compensation either. You can read more about the substitute provision as an exception to the transition compensation in our blog on this topic.

An employee may also be entitled to a transition allowance in the event of partial termination of the employment contract, with or without a settlement agreement. In case the working hours are structurally reduced by at least 20%, the employee may be entitled to a proportionate partial severance payment. We provide more information on this in the blog partial termination transition compensation.

If the employee leaves employment sick then the employer can apply for compensation for the transition allowance. Even if the employer of a small business stops working because he himself retires or dies, he can ask for a compensation of transition compensation. With the compensation transition compensation scheme, the employer can get the transition compensation back from the government. Also, some costs incurred by an employer are deductible from the transition compensation.

In 90% of cases, we can achieve better terms and higher severance pay. In principle, it does not have to cost the employee anything because we will ask the employer to cover the costs. The first analysis of your case is completely free. We can then determine together whether we can be of added value.