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The transition payment is a statutory compensation for an employee who loses their job at the employer's initiative. In principle, you owe this payment upon any termination at your initiative, starting from the first working day. The amount depends on the salary and the duration of employment.
What is the transition payment?
The transition payment is a financial compensation for employees who lose their job. It helps the employee transition to new work so that they do not immediately face financial difficulties. The payment is regulated by law.
When do you owe that?
In principle, you owe the transition payment if the employment ends or is not continued at your initiative: in the event of termination or dissolution, but also in the event of the non-renewal of a temporary contract. The entitlement arises from the first working day; there is no longer a minimum duration of employment.
How is the height calculated?
The amount depends on the monthly salary and the number of years of service. In principle, the compensation amounts to one-third of a monthly salary per year of service, calculated proportionally over the exact duration. (The precise calculation and any statutory maximum may change; check the current rules.)
Exceptions
In some cases, there is no transition payment or an adjusted one, for example in the event of seriously reprehensible conduct by the employee, or in the case of termination by mutual consent (in which case you negotiate the payment yourself in a settlement agreement). For the dismissal of a long-term sick employee, a compensation scheme exists through the UWV under certain conditions.
Frequently Asked Questions
Do I always have to pay a transition payment?
In principle, upon any termination at your initiative, from the first working day, including the non-renewal of a temporary contract. There are exceptions.
How much is the transition payment?
In principle, one-third of a monthly salary per year of service, calculated proportionally over the exact duration. Check the current calculation.
When do I not have to pay?
Including in cases of seriously reprehensible conduct by the employee. By mutual agreement, you negotiate the compensation yourself.
Need help with dismissal and severance pay?
Our legal experts calculate the compensation and draft a settlement agreement . View our employment lawteam or schedule a free consultation.
