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Transition compensation
What is transition compensation?
The transition compensation is a compensation due from an employer to an employee when the employment contract is terminated, on the initiative of the employer. Since the introduction of the Balanced Labour Market Act (WAB) on 1 January 2020, employees are already entitled to a transition fee from the first working day, even in the case of non-renewal of a fixed-term employment contract or dismissal during the probationary period.
Exceptions to payment of transition compensation
In some situations, an employer does not owe a transition fee. This applies, for example, when:
- The employee himself resigns without the employer being seriously culpable.
- When terminating the employment contract by mutual consent (settlement agreement).
- The dismissal takes place because of seriously culpable behaviour by the employee.
- The employment is terminated because of a bankruptcy or suspension of payments of the employer.
Importance of engaging an attorney
Although the rules around the transition compensation have been simplified since 2020, there remain situations where legal assistance from a lawyer is valuable for both employers and employees. Here’s why:
1. Complexity in determining the amount of the transitional compensation
Transition compensation is calculated based on length of service and gross monthly salary, but there are often nuances that can affect it. Consider the following:
- Calculation of variable wage components, such as bonuses or overtime.
- Special situations such as long-term illness or partial disability. An attorney can help calculate these things accurately so that both employer and employee are not short-changed.
2. Conflicts or disagreements over grounds for dismissal
Not every dismissal is straightforward. Sometimes there is a conflict, where the employee and employer differ on the reason for dismissal. This can affect the right to a transitional compensation and its amount. I can help defend the employee’s rights or advise the employer on the right procedure to avoid further legal action.
3. Protecting rights and minimising risks
For employees, it is important that they receive the transition compensation they are entitled to. For employers, it is important that they apply the law correctly to avoid legal problems and potentially high costs. I make sure that both parties are well informed and that all procedures follow the rules.
Conclusion
The transition compensation provides employees with a financial cushion in case of dismissal, but employers should also handle this obligation carefully. Since the change in the law in 2020, the calculation has been simplified, but legal assistance can still be important in more complex situations. An attorney can help to calculate the transition compensation correctly, avoid potential conflicts and ensure that the rights of both parties are safeguarded. This can not only prevent a lot of uncertainty and costs, but also contribute to a smooth and fair handling of the dismissal.
The information on this page is for informational purposes only and should not be considered specific legal advice. For personalized advice, please contact Ok Legal. Please note that the content of this page may change without notice and Ok Legal is not liable for any inaccuracies and/or missing information.
