What are the exceptions to the transition compensation?

Sometimes, you do not have to pay transition compensation or you have to pay a lower or higher transition compensation amount:

No transition compensation

You need not pay a transition compensation if:

  • The employee is under 18 and works less than 12 hours per week
  • The employment contract ends upon or after reaching the pensionable age
  • The end of the employment contract is due to serious culpable acts of the employee (mostly in the event of dismissal with immediate effect)
  • You have been declared bankrupt, granted moratorium or may participate in a debt management scheme for natural persons
  • The collective agreement contains an equivalent provision for transition compensation; or
  • Your employee has been given a new temporary contract before his or her temporary contract has ended, and the new contract will start within 6 months after the end of the previous employment contract

Transition compensation scheme

You can apply for compensation from the UWV for transition compensation paid in the event of dismissal of an employee who has been ill for more than two years.

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Related questions

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  • How to dismiss a statutory director?

    statutory director is dismissed by the general meeting of shareholders (AVA) or the Supervisory Board (RvC).

    Often the director is also an employee of the company. In that case he has a ‘dual legal relationship’, a relationship under employment law and corporate law. The dismissal of the director under corporate law by the general meeting of shareholders or the Supervisory Board then also entails the dismissal under employment law.

    Thus, all that is needed for the dismissal of the statutory director is a valid decision by the general meeting of shareholders or Supervisory Board. Make sure that all corporate law rules are complied with! If these rules are not complied with, the dismissal decision may be null and void or can be cancelled. In addition, there must be a reasonable ground for the dismissal. Otherwise, the director can claim a reasonable compensation.

    Please note: If the director has been appointed within a group of companies as a statutory director of one company and has concluded an employment contract with another company, the aforementioned does not apply. In that event the dismissal under corporate law does not result in dismissal under employment law.

  • My employee’s temporary contract is about to end. What do I have to do?

    In principle, a temporary contract ends automatically – without a need for prior notice – on the agreed end date.

    You must inform the employee about the continuation of the employment relation no later than one month before the end of the contract (‘notification obligation’). You must notify your employee in writing whether or not the employment contract will be continued and if so, under what conditions. What if you do not notify the employee (on time) whether or not the employment contract will be continued? In that case you are obliged to pay the employee a compensation. If you do not fulfil the notification obligation and the contract will be continued, the contract will be deemed to be continued for the same time (but for a maximum period of one year) under the same conditions. You do not have a notification obligation in the case of a temporary contract in which the end date is not set on a calendar date or which has a duration of less than six months.

  • How can I terminate my employee’s employment contract?

    You can terminate your employee’s employment contract in different ways: