Right to Transition Compensation in Utrecht
Under Dutch employment law, the right to transition compensation provides essential protection for employees in Utrecht upon dismissal. This scheme compensates for lost income and supports the transition to new employment, which is particularly relevant in a dynamic city like Utrecht with its diverse economy. Employers in the region must comply with this compensation under specific conditions. This article outlines the rules, calculation method, and local practices, including tips for residents of Utrecht.
Legal Basis of Transition Compensation for Utrecht Residents
The transition compensation is governed by the Dutch Civil Code (BW), specifically in Article 7:673 BW, within Book 7, Title 10, Section 10.2, which covers dismissal procedures. Introduced through the Wet Werk en Zekerheid (WWZ) on January 1, 2012, and fully effective since July 1, 2015 for ongoing contracts, it replaced the old dismissal compensation and focuses on smooth transitions. For Utrecht residents, where many knowledge workers and startups operate, this is crucial.
The law guarantees every employee with at least two years of continuous service a compensation upon dismissal, except when the employee is responsible (such as in voluntary resignation or for cause). Collective labor agreements (CAOs) in Utrecht sectors, such as education or tech, may expand this, but never below the legal minimum.
Conditions for Transition Compensation in Utrecht
Not every dismissal situation in Utrecht automatically qualifies for transition compensation. Key criteria include:
- Length of service: At least two years of continuous employment with one employer in Utrecht. Shorter periods do not qualify unless through consecutive contracts.
- Reason for dismissal: The dismissal must not be solely the employee’s fault, such as in cases of misconduct without attempts at reassignment or voluntary resignation.
- Contract type and age: Applies to permanent and temporary contracts; for expiring fixed-term contracts without notice, it only counts in case of chain succession.
- No offsetting: The compensation cannot be deducted from other obligations, such as a non-compete clause, without explicit agreement.
Note: In case of bankruptcy or suspension of payments, the UWV (Employee Insurance Agency) pays the transition compensation (Article 7:673(7) BW). For advice in Utrecht, contact Het Juridisch Loket Utrecht.
Calculating Transition Compensation for Utrecht Residents
The compensation in Utrecht is determined based on the daily wage, multiplied by a factor derived from years of service. The steps are:
- Daily wage: Average daily income over the last three months, including vacation pay and fixed bonuses, but excluding overtime.
- Under 50 years: One-third of the monthly salary per year worked.
- 50 years or older: Half of the monthly salary per year worked.
- Cap: €89,000 (2023) or the annual salary if that is lower.
Use the UWV calculator for precise results. This article builds on our overview Transition Compensation Upon Dismissal – Calculation and Rights, with practical steps for Utrecht employees.
| Years of Service | Compensation per Year (Under 50) | Compensation per Year (50+) |
|---|---|---|
| 1–2 years | 1/3 of monthly salary | 1/3 of monthly salary |
| 3–10 years | 1/3 per year | 1/3 until age 50, then 1/2 |
| More than 10 years | 1/3 per year | 1/2 per year after age 50 |
Rights and Obligations Regarding Transition Compensation in Utrecht
Employees in Utrecht are entitled to compensation upon qualifying dismissals; employers must pay within one month after dismissal or in agreed installments. You can exchange it for outplacement services or a settlement agreement, but only with mutual consent.
Obligations: Employers must clearly explain the calculation. Employees must cooperate with transition plans, such as during illness. In case of disputes in Utrecht, you can turn to the District Court of Utrecht; the statute of limitations is two months after dismissal. The compensation does not affect your unemployment benefits and can be combined with them.
Practical Examples of Transition Compensation in Utrecht
Consider Marieke, who worked for five years at a Utrecht tech company with a gross monthly salary of €3,000. Her daily wage: €111 (based on 27 days). Upon economic dismissal, she receives 5 × (1/3 × €3,000) = €5,000, ideal for job applications in the region.
Or Rob, 52, with 15 years at a local education institution and a €4,000 monthly salary. First 10 years: 10 × (1/3 × €4,000) = €13,333. Last 5 years: 5 × (1/2 × €4,000) = €10,000. Total: €23,333. No right applies in case of voluntary resignation. In Utrecht, disputes often arise over fixed-term contracts in hospitality: after two years of chain succession, compensation applies even without notice.
Frequently Asked Questions About Transition Compensation in Utrecht
Do I qualify for transition compensation if I resign voluntarily?
No, unless there are compelling reasons, such as unpaid wages. Exception applies if the employer fails to meet obligations. For personalized advice, consult Het Juridisch Loket Utrecht.
What if my employer in Utrecht goes bankrupt?
The UWV will pay the transition compensation through the legal procedure (Article 7:673(7) BW). Contact the Municipality of Utrecht for additional unemployment support.