Severance payment (transition fee) Amsterdam: Dutch Labour Law


Amsterdam lawyer: severance payment severance pay, transition fee, redundancy payment or compensation and settlement agreement according to Dutch Law amsterdam

Amsterdam lawyer: severance payment and settlement agreement according to Dutch Law

Our Dutch lawyer Labour and Employment Law in Amsterdam, The Netherlands, is specialist employment solicitor advising foreign employees and expats on settlement agreements and severance payment (severance pay, transition fee, redundancy payment or compensation). We specialize in international and Dutch Labour & Employment law since 1997. According to Dutch Labour Law, severance payment is an important provision of a Compromise Agreement (Employment Exit Agreement, Employment Separation Agreement or Termination Agreement). The Amsterdam team of specialist Dutch Employment Law Solicitors have a vast amount of experience in advising expats on all Dutch (redundancy) situations. In many cases a mutual agreement to end the employment relationship with a termination agreement (exit package or compromise agreement, often including a severance payment) or court settlement is reached in or out of court.

Settlement agreement in The Netherlands

The settlement agreement outlines the terms of the deal and can contain the following information:

  • Severance pay (transition fee, redundancy compensation)
  • Date of termination
  • Continued payment of remuneration up to the end of the employment relationship
  • Release from work duties
  • Post-contractual items
  • Confidentiality
  • Reference
  • Final discharge.

Transition compensation: severance payment in The Netherlands

An important provision in the Dutch settlement agreement relates to the  ‘transition compensation’ (statutory severance payment, redundancy compensation or dismissal compensation). The transition compensation should compensate employees for their loss of earnings and costs such as costs for scholing or outplacement. This is available to all employees who have an employment contract that lasted for two years ore more. The amount of a transition compensation is calculated using a formula based on:

  • how long the employee has worked for the employer (length of service)
  • age;
  • monthly pay (gross monthly salary) including holiday allowance.

Maximum severance payment (transition fee)

The transition payment is capped at € 77,000, unless the employee’s salary exceeds that amount. Our Dutch attorney in Amsterdam can calculate your transition compensation (financial package). If our legal expert advises that the money offered is insufficient, we will negotiate on your behalf to ensure a fair compensation is paid. The transition compensation is considered to be wage subject to wage tax/national insurance contributions and the income-related healthcare insurance contribution.

Employees over fifty who have been working for more than 10 years for an employer, were until 2020 entitled to deviant transitional regulation.

Negotiations and legal advice on Dutch termination agreement

Some employers will be prepared to pay more than just the statutory severance payment in case of a settlement agreement. This may vary depending on the individual circumstances of the case. Outplacement costs may be deducted from the transition compensation.

Legal expenses and termination agreement

You are entitled to legal consultation regarding your settlement agreement in order to prevent subsequent discussions and legal proceedings.

The employee may at a later stage claim that he did not fully appreciate the legal consequences of the settlement agreement. To avoid later discussion about the mutual consent of the termination, most employers offer an allowance for legal expenses. Our Amsterdam lawyers always try to cover our fees by seeking payment from your employer rather than from you.

Other provisions in settlement agreement

A settlement agreement will be considered as the final arrangement of all the issues between the parties in relation to the employment, since the contract prevents or limits future disputes. The agreement will ensure finality in the ending of the relationship and will avoid a future employment dispute in court. It is a legally binding contract enforceable in a court of law.

Legal advice for employees and expats in Amsterdam

You can have your termination agreement checked by our experienced Dutch solicitor (lawyer) Employment and Labour Law in Amsterdam. Our Amsterdam lawyers will advise you fully on all the implications of the severance payment (transition fee) and signing the Settlement Agreement.

Amsterdam Amsterdam lawyer: severance payment and settlement agreement according to Dutch Law Contact Amsterdam solicitor advising on Dutch Law: severance payment and settlement agreements

Please contact our lawyer Dutch Labour and Employment Law in Amsterdam, The Netherlands, mr. P.Chr. Snijders for further information about severance payment (transition fee), settlement agreements and termination agreements: 0031 20 5221999.

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