Transit compensation in settlement agreement

3 minuten mr. Mariëlle Ducaat arbeidsrecht voor werkgevers 31 januari 2023 2025

Transit compensation:

Upon termination of the employment contract, employer grants employee, in replacement of lost or to be lost wages, a gross compensation worth the transit compensation

The dismissal compensation is in almost all cases an important part of a settlement agreement. In another contribution about the dismissal compensation in a settlement agreement we have already explained that the transit compensation is taken as (minimal) starting point in many of the cases.

Since July 1, 2015, with the entry into force of the Work and Security Act (WWZ), employees have been entitled to a transit compensation upon dismissal (at the initiative of employer). The compensation is on the one hand intended as compensation for the dismissal and on the other hand intended to simplify the transition to another job. However, not all employees were entitled to a transit compensation. Under the WWZ, namely, only employees who had been in service with their employer for at least 24 months were entitled to a transit compensation. If you had only been in service for 22 months with your employer, and your employer wished to say goodbye to you, then under the WWZ your employer owed no transit compensation for that. With the entry into force of the Balanced Labor Market Act (WAB) per January 1, 2020, however, the transit compensation applies from the first day of the employment. So even if you were dismissed during your probationary period, for example, under the WAB you are entitled to a transit compensation.

Height transit compensation

The height of the transit compensation depends on the duration of the employment and the height of the monthly salary. For each year that the employment contract has lasted, the transit compensation amounts to one third monthly salary. For each remaining part of the employment, or if the employment has lasted less than a year, the transit compensation is calculated pro rata. Which salary components MUST and must not be included in the calculation of the transit compensation is determined in the Decision wage concept compensation notice period and transit compensation. It is always advisable to check well whether ALL relevant parts of your salary are included in the calculation of the transit compensation. Our jurists can help you with that.

Deduct costs from transit compensation?

Under conditions, it is allowed to deduct certain costs from the transit compensation. These are so-called transition and employability costs. Transition costs are costs made in connection with (impending) dismissal. Costs for retraining or outplacement fall under this, for example. Also a period of exemption can be regarded as transition costs.

Employability costs are costs already made earlier during the employment to increase the employability of an employee. It then concerns the employability of an employee outside the own organization. Think for example of a coaching course that an accountant would like to follow, while his current position gives no reason for it.

For employers, it can be interesting to make arrangements about this already at the start of the employment with the employee. Our jurists gladly help you with that!

mr. M.S. (Mariëlle) Ducaat

Jurist arbeids- en ontslagrecht

Mariëlle adviseert en procedeert namens zowel werkgever als werknemer bij arbeidsrecht gerelateerde onderwerpen. Hierbij kunt u denken aan ontslag (al dan niet middels een vaststellingsovereenkomst) maar ook disfunctioneren en ziekte. Mariëlle maakt zich graag hard voor uw belang. Bij vragen en/of opmerkingen kunt u haar bereiken via ducaat@wolderwijd-juristen.nl of 036 522 7007.

Transit compensation in settlement agreement?

Transit compensation in settlement agreement

3 minuten mr. Mariëlle Ducaat arbeidsrecht voor werkgevers 31 januari 2023 2025