If the employee has been employed for at least 24 months and the contract is ended, then the employer is obliged to pay the employee a transition reimbursement.
For the first 10 years that the employee was employed the reimbursement is 1/6 of a monthly salary per 6 months of service.
For the following years the reimbursement on top of the first 10 years is 1/4 of a monthly salary per6 months service.
The maximum amount is EUR 75.000 or an annual salary if that exceeds EUR 75.000.
Mind you, this is less reimbursement than if you go to court (!).
The transition reimbursement does not apply when:
– The employee terminates the contract him or herself;
– The employment contract is terminated in mutual consent, unless agreed differently;
– The employment contract is ended due to the pension date of the employee;
– The employee has cause a serious violation harming the employer;
– In case of bankruptcy/insolvention employer
For the period up to 2020 there is transition period for the transition reimbursement where the amount is more limited. A labour lawyer needs to assist here.
We recommend never to issue a 2 year contract, as that can result in a transition reimbursement. A 23 month contract can prevent such a reimbursement. Same goes for 3 consecutive fixed term agreements. We suggest to use e.g. 3 agreements of 7 months each.
The new rules have been introduced to make the rules less complex…