Whining employee entitled to transition payment

In principle, an employee is always entitled to a transition payment upon dismissal, even if they do not request it themselves. Many employers use the so-called “whining system”: they wait until the employee “whines” for the payment themselves or until the statutory limitation period of three months has expired. While this is sometimes permitted, those who go too far may still be required to pay on the grounds of reasonableness, fairness, and good employership. In this article, you will read when the whining system is allowed and when it will actually cost you money.

What is the transition payment?

The transition payment is the statutory severance pay to which an employee is entitled if the employment contract ends or is not renewed at the initiative of the employer. The regulation is set out in the Dutch Civil Code (Article 7:673 BW). The right arises from the first working day, thus also in the case of short-term employment and the non-renewal of a temporary contract.

The payment is intended as compensation for the dismissal and to facilitate the transition to other work. As a general rule, the transition payment amounts to one-third of the gross monthly salary per year of service, calculated pro rata for remaining periods. A statutory maximum amount applies, which is indexed annually (in 2026 this is a maximum of €102,000 gross); if the employee earns more than that maximum per year, the upper limit is one gross annual salary.

When are you, as an employer, required to pay a transition payment?

• Upon termination of the employment contract by the employer (with the permission of the UWV or the employee).
• Upon dissolution of the employment contract by the subdistrict court at the request of the employer.
• If a temporary contract is not extended at the initiative of the employer.
• In certain cases where the employee resigns or requests dissolution due to seriously reprehensible conduct by the employer.

In a number of exceptional cases, you are not required to pay a transition payment, for example in the event of seriously reprehensible conduct by the employee or if the employment ends by mutual consent via a settlement agreement in which arrangements have been made regarding this.

The beeping system: waiting until the employee “beeps”

Some employers pay the transition allowance of their own accord. Other employers use the so-called " whisper system": they wait until the (former) employee requests the transition allowance themselves, or until the statutory limitation period has expired. The reasoning behind this is simple: if the employee does not whistle in time, their entitlement lapses and the money remains in the coffers.

The existence of this system is due to the strict statutory limitation period. However, as shown below, that period is less absolute than many employers think.

The three-month expiry period

To claim the transition payment, an employee must file a petition with the sub-district court within three months after the termination of employment (Article 7:686a of the Dutch Civil Code). Important characteristics of this time limit:

• It is a forfeiture period, not a limitation period. It cannot be interrupted or extended.
• The judge must assess the exceeding of the limit ex officio , even if the employer does not invoke it himself.
• If the time limit is exceeded, the request is in principle inadmissible, even if exceeded by a few minutes.

Case law shows that this can have harsh consequences: there are known cases in which a request failed that was submitted just a few minutes too late. Employers base the notification system on this strict line. Nevertheless, some perspective is in order.

Reasonableness and fairness can override the strict time limit

The strict limitation period does not mean that an employer may remain inactive indefinitely. If an employer goes too far, invoking the exceeding of the time limit may unacceptable according to standards of reasonableness and fairness . A striking example is the case of car service company Kwik-Fit.

Kwik-Fit had terminated an employment contract and was to pay a transition payment. In a letter, the company itself had promised to prepare a final settlement including the transition payment. However, the transition payment was not mentioned at all in the final dismissal letter. The employee called and wrote, but Kwik-Fit did not respond. Only after the expiration of the limitation period did the company state that the period had passed and the right to the payment had consequently lapsed.

The judge ruled that it was unacceptable, according to standards of reasonableness and fairness, to forfeit the right to the transition payment. The following factors were taken into account:

• There was no disagreement between the parties regarding the right to the compensation, nor regarding the amount of the transition payment.
• The employer had previously promised payment himself.
• Given that promise, the employee did not have to count on having to go to court.

In addition, it was taken into account that systematically passive behavior on the part of the employer can be at odds with good employership. An important signal, also for other employers.

Do not push the beeping system too far

There are plenty of examples where a judge has no problem with an alarm system. However, the Kwik-Fit case shows that, as an employer, you should not overdo it. A few practical rules of thumb:

• Waiting until the employee files a formal petition goes too far if you have already implicitly or explicitly promised payment, or if there is no dispute regarding the entitlement and the amount.
• Waiting until the employee simply “speaks up” (by phone or letter) seems more acceptable. Even a good employer may be reminded of the existence of the compensation.
• Do not make promises that you subsequently do not keep, and do not ignore letters or phone calls regarding the transition payment.
• If there is a genuine disagreement regarding the right or the amount, you are generally in a stronger position if the employee does not go to court in a timely manner.

In short: only when an employee never complains and there are no promises or special circumstances involved can you consider not paying the transition allowance. In all other cases, caution is advised.

Risks of an overly strict alarm system

Anyone who uses the time limit as a crowbar to avoid paying rightful compensation runs concrete risks:

• Payment of the full transition allowance after all, despite the expired period.
• Litigation costs and legal assistance if the case goes to court.
• Reputational damage and strained relationships, especially in small companies with a close-knit workforce.
• A precedent that other (former) employees are also seizing upon to file a claim after all.

Frequently asked questions about the transition payment and the warning system

Do I have to pay the transition payment if the employee does not ask for it?

In principle, yes: the right to the transition payment arises by operation of law in the event of a dismissal initiated by the employer. If the employee does not request it and does not file a petition within three months, his entitlement lapses in principle. However, if you have promised payment or go too far, the court can still compel you to pay.

How long does an employee have to claim the transition payment?

The employee must file a petition with the sub-district court within three months of the termination of employment. This is a strict limitation period that cannot be extended or interrupted, and which the judge reviews ex officio.

Is the beeping system allowed?

Waiting until the employee “squeaks a whistle” is not prohibited in itself. It becomes problematic when you have previously promised payment, fail to respond to requests, or deliberately allow the deadline to expire while there is no dispute regarding the right to do so. In such cases, invoking the limitation period may be unacceptable on the grounds of reasonableness and fairness.

What if the employee is just too late with his request?

The general rule is strict: even exceeding the time limit by a few minutes can lead to inadmissibility. Nevertheless, in exceptional circumstances, the judge may reject an appeal based on the time limit on the grounds of reasonableness, fairness, and good employership.

How much is the transition payment?

As a general rule, this is one-third of the gross monthly salary per year of service, pro rata for shorter periods. A statutory maximum applies, which is indexed annually; if the employee earns more than that maximum per year, one gross annual salary forms the upper limit. Have the exact calculation for your situation checked, as components such as holiday pay, bonuses, and fixed allowances may be included.

Does this also apply after the Balanced Labour Market Act (WAB)?

Yes. Since the WAB (2020), an employee accrues transition payment from the first working day. The three-month expiry period and the possible correction based on reasonableness and fairness remain fully relevant.

Have your dismissal file legally reviewed

Do you wish to use a warning system, or are you unsure whether you need to pay a transition payment in a specific case? One incorrect promise or ignored letter can cost you the full compensation plus legal costs. Our employment review your dismissal file, calculate the compensation, and advise on an approach that holds up legally.

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