What compensation do I have to pay to my employee in case of dismissal?

Transition compensation

When an employment contract is terminated upon your initiative, you must pay the employee transition compensation. The transition compensation depends on the length of service and the employee’s salary. In some cases, however, you do not need to pay transition compensation at all or a reduced compensation. In other cases, you must pay higher transition compensation.

Reasonable compensation

If the dismissal is attributable to serious culpable acts or omissions on your side, the court can grant the employee a reasonable compensation on top of the transition compensation. The amount of the reasonable compensation will be determined by the court.

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Related questions

  • 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.

  • Can a temporary contract be terminated prematurely?

    Premature termination of a temporary employment contract is only possible if this has been agreed in writing:

    Premature termination clause

    If a premature termination clause has been agreed upon, for the employer the “normal” rules for termination apply. In other words: You can only terminate an employment contract prematurely with permission from the UWV, via a request for dissolution to the subdistrict court, or with the employee’s agreement. You must also observe the period of notice for termination. Your employee can also terminate the employment contract prematurely, provided that he or she observes the period of notice for termination.

    No premature termination clause

    If no premature termination clause has been agreed upon, in principle, the employment contract cannot be terminated prematurely. If the contract is still terminated, the non-terminating party can claim damages before the subdistrict court. In the event of wrongful premature termination by the employer the employee can also request the annulment of this termination before the subdistrict court.

    Without a premature termination clause, a temporary employment contract can be terminated prematurely: