No. There are situations in which you will not receive a transition payment, for example if the dismissal is due to fault or if you have already agreed on another form of compensation. In most cases, however, you can count on a transition payment. It is therefore important to know your rights and obligations as an employee well, so that you know where you stand in the event of dismissal.

The transition payment is a statutory severance payment. The regulation transition payment is included in Article 7:673 of the Civil Code. The purpose of the transition compensation is to financially facilitate the employee's transition (transition) to other work. The transition payment is also a compensation for dismissal. The employee can use the compensation for the cost of training or support to other work.

The difference between these compensations is that the transition payment is regulated by law. Severance pay is not regulated by law. The transition payment 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 pay (or termination payment) may be based on the outcome of the legal transition payment but it does not have to be. The severance payment agreed upon by the parties can be higher or even lower than the legal transition compensation.

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

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

The statutory transition payment 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 payment. In our blog sick leave and transition payment, you can read all about what rights an employee has when he leaves employment sick.

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 payment. Then the right to the transition payment, which is 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 may include a higher or lower transition payment.

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 serious culpable actions. If the collective bargaining agreement includes a substitute provision that replaces the statutory transition payment, the employer does not have to pay any transition compensation either. You can read more about the substitute provision as an exception to the transition payment in our blog on this topic.

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