The transition payment is an important benefit for employees who are laid off. But how exactly does it work? This blog post explains everything about the transition payment: from its background and terms to what you can do if you think you're entitled to it but don't receive it.
From subdistrict court formula to transition compensation
Before 2015, severance pay was often calculated using the subdistrict court formula. This calculation method considered:
- The number of years of service: the older you get, the more each year counts.
- The gross monthly salary: including holiday pay and any fixed allowances.
- The correction factor: This was adjusted depending on the culpability of the dismissal.
Although this method allowed for customization, it often also led to major differences in outcomes and uncertainty among employees and employers.
This changed with the introduction of the Work and Security Act (WWZ) on July 1, 2015. The statutory transition payment replaced the subdistrict court formula and introduced a more uniform and transparent system. This made severance pay more equal and predictable for all employees.
In 2020, this scheme was further amended by the Balanced Labor Market Act (WAB), which gave employees the right to accrue benefits from their first working day, even if the employment contract was short-lived.
What is the transition payment?
The transition payment is a statutory severance payment intended to support you in your search for a new job. It can be used for retraining, a course, or as a financial safety net. It's not only a form of compensation, but also an investment in your future.
When are you entitled to a transition payment?
You are entitled to a transition payment if:
- Your employer terminates or does not renew your contract.
- You get fired, after your probationary period.
- You are dismissed due to long-term illness.
The compensation applies to all employees with an employment contract, regardless of whether you have a permanent or temporary contract. This excludes freelancers and volunteers. You accrue entitlement from your first day of work, even if you've only worked for a few months.
Exceptions: when are you not entitled to a transition payment?
In some situations you are not entitled to a transition payment:
- In case of seriously culpable behavior: for example in the case of summary dismissal due to fraud, theft or other serious misconduct.
- If you resign yourself, unless this is due to seriously culpable actions or omissions on the part of your employer.
- In case of retirement or death: if the employment contract ends for this reason.
💡 Tip: If you disagree with your dismissal or the lack of compensation, you can challenge it in court. This must be done within three months of the end of the employment contract.
How is the transition payment calculated?
The compensation is calculated on the basis of:
- Your gross monthly salary: including fixed components such as holiday pay.
- The number of years of service: You receive 1/3 of a monthly salary for each full year worked. For partial years, the amount is prorated.
Example: If you worked for 2,5 years for a gross monthly salary of €3.000, the compensation is approximately €2.500. You can consult a legal advisor for a precise calculation.
The role of a social plan
In the event of collective layoffs, such as those resulting from a reorganization, a social plan is often drawn up. This is an agreement between the employer and employees (representatives) or union, in which supplementary provisions are made. A social plan can significantly improve your situation. Consider:
- Additional severance payments: often higher than the statutory transition payment.
- Retraining programs: assistance in finding other work or following a training course.
- Hardship clause: extra help for employees in special situations, such as when you are close to retirement.
A good social plan offers more security and better conditions than just the transition payment. It is therefore important that unions such as De Unie involved in the negotiations. De Unie helps its members to ensure that their interests are properly represented.
What can De Unie do for you?
As a member of De Unie you can count on professional support when you are dismissed:
- Legal advice: We help you understand your rights and assess your situation.
- Negotiation support: whether it concerns the transition payment or agreements in a social plan.
- Assistance with dismissal procedures: if your employer refuses to pay the compensation or if you disagree with the terms.
So…
The transition payment is an important support for employees facing dismissal. The history of this scheme shows how the system has improved, but also that there are still exceptions and pitfalls. Furthermore, a social plan can significantly strengthen your position, especially during a reorganization.
Are you unsure about your situation or want to know what your rights are? Contact us De Unie via sc@unie.nl or 0345 851 963. We are available every weekday from 8:30 AM to 17:00 PM. Our experts are ready to help you with expert advice and support.
