The Way To Calculate Transition Compensation (Transitievergoeding Berekenen) Under Dutch Labor Market

It is usually the organization that represent the employer party who will have to calculate transition compensation (transitievergoeding berekenen) for those employees that are working in the organization. Transition payment or compensation is total money that an employee is entitled to from his employer at the point his employment contract is terminated.

In Netherlands, there is transition payment scheme that was introduced for the first time in year 2015 whereby employers of labor were mandated by law of Dutch Work and Security Act. The law stated the need for employees whose appointment have been terminated after working for two or more years with same employers to be compensated. This means that every employer will start to calculate transition compensation (transitievergoeding berekenen) of every staff after he might have worked diligently for two years.

However, in year 2020, there was another law promulgated in the name of Balance Act. Here, the transition payment law of earlier time was altered in such a way that it really favors the employees this time around. So now, anyone that is employed under Labor market of the Dutch will be eligible to be paid for transition right from the first day he has spent and worked with an employer.

This translates to the fact that every organization will start to calculate transition compensation (transitievergoeding berekenen) for any staff who has spent one day in its office. It does not matter if the said employee is still undergoing probational or trial period in the organization. The transition payment will start to count on his first day.

Before the introduction of the Balance Act law, the transition payment of an employee is computed based on his;

1.       Age.

2.       Monthly salary or wage.

3.       Years of service.

For the first ten (10) years that an employee has spent in a company, he is entitled to one-sixth of his gross monthly pay or salary. This will be paid at every six month he is still in active service. The way to calculate transition compensation (transitievergoeding berekenen) after ten years the employee has been working will be a quarter of his monthly pay. But to those staff who are already more than fifty years of age and have spent in the least, ten years in active service in an organization, their transition payment will be different. They will be compensated by a half of their monthly salary.

What the Dutch Labor Market in the Balance Act did was to remove both the age as well as the length of active service an employee has spent in an organization. Based on this new Balance Act, every staff will be entitled to one-third (1/3) of his gross monthly pay for every year of his active service.

This is not only what will be used to calculate transition compensation (transitievergoeding berekenen) for the employee. But also, holiday allowances and other bonuses will be included as well. Click here to know more about #https://www.wesseljuristen.nl/transitievergoeding-berekenen/.