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Netherlands - Severance pay and redundancy payment


Severance pay and redundancy payment - Netherlands - 2019    

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Severance pay:
Remarks:
  • - An obligatory severance payment, called “transitional remuneration”, is regulated in Art. 7:673 CC
    - Employees are eligible for the severance payment, when they have worked for the employer for at least 24 months and have been terminated by the employer, the employment relationship has been terminated on mutual consent at the employer’s initiative, a fixed term employment contract has not been renewed by the employer or when the employee has terminated the employment relationship due to misconduct of the employer.
    - The payable amount must be 1/6 of the monthly wage of the employee for each 6-month period, which the employee has worked for the employer, plus ¼ of the monthly wage for each 6-month period worked above 10 years. Though, the severance pay can never be higher than 77,000 EUR, or one annual wage, if the annual wage is higher than 77,000 EUR. In enterprises with more than 25 employees, the severance pay for employees, who are 50 or older and who have worked for the employer for at least 10 years, must be equal to half their monthly wage for each 6 month period they have worked for the employer, Art. 7:673a CC.
    - Under special circumstances, based on the principles of fairness and taking into account negligent conduct of either the employer or the employee prior to the termination, the court can decide to increase or lower the severance pay.
    - A different entitlement to severance pay can be set by collective agreement (Art. 7:673b CC).
  • tenure ≥ 6 months: 0 month(s)
  • tenure ≥ 9 months: 0 month(s)
  • tenure ≥ 1 year: 0 month(s)
  • tenure ≥ 2 years: 0.66 month(s)
  • tenure ≥ 4 years: 1.32 month(s)
  • tenure ≥ 5 years: 1.65 month(s)
  • tenure ≥ 10 years: 3.33 month(s)
  • tenure ≥ 20 years: 8.33 month(s)
Redundancy payment:
Remarks:
  • No specific redundancy payment. Severance pay covers economic (individual and collective) dismissals
  • tenure ≥ 6 months: 0 month(s)
  • tenure ≥ 9 months: 0 month(s)
  • tenure ≥ 1 year: 0 month(s)
  • tenure ≥ 2 years: 0.66 month(s)
  • tenure ≥ 4 years: 1.32 month(s)
  • tenure ≥ 5 years: 1.65 month(s)
  • tenure ≥ 10 years: 3.33 month(s)
  • tenure ≥ 20 years: 8.33 month(s)

Notes / Remarks
“Transition remuneration” is statutory severance pay. There is no distinction anymore between the type of dismissal (redundancy or for personal conduct): the “transition remuneration” also counts as redundancy payment. Social plans can establish higher amounts. However, based on the CC the employer has to pay the “transition remuneration” anyway.