Severance pay and golden handshakes

The reimbursement for a dismissal could involve transitional statutory compensation, fair compensation, the result of negotiations or a golden handshake.

Transitional compensation

In principle, anyone whose employment agreement will be terminated upon the employer’s initiative has the right to a transitional compensation. The amount depends on the salary and the duration of the employment and a maximum sum applies.

Compensation

In (exceptional) circumstances, the employee also has a right to an additional reimbursement upon dismissal, the so-called fair compensation. This is due, for example, if the employer has behaved in a seriously reprehensible way or has deliberately poisoned the employment relationship.

If the parties make a settlement agreement and terminate the employment agreement with mutual approval, they can agree to what they like. The right to the transitional compensation and the fair compensation lapses after the termination agreement has been concluded. Usually the employee will negotiate a reimbursement for the dismissal that is equal to or higher than the legally prescribed reimbursement for the transition.

Employment agreement & golden handshake

Finally, the parties in the employment agreement may agree on an (additional) reimbursement for redundancy. This contractual reimbursement for redundancy is also known as a golden handshake.

In agreements with members of the board of directors and top employees it is particularly common to negotiate a high sum for the compensation in a contract. In some cases however, such compensation may be capped [by the Senior Executives in the Public and Semi-Public Sector (Standards for Remuneration) Act].

More information

GMW lawyers will be happy to help you with all your employment-related legal issues. If you have any questions, please contact us directly using the enquiry form below or +31 (0)70 3615048. Our pension and employment lawyers will be happy to support and advise you.

More employment law related topics >

Lawyers

Amber Willemsen

Amber Willemsen

Read more about this lawyer
Godelijn Boonman

Godelijn Boonman

Read more about this lawyer
Prof. Hans van Meerten

Prof. Hans van Meerten

Read more about this lawyer
Roos van Zaltbommel

Roos van Zaltbommel

Read more about this lawyer

Looking for an employment law lawyer in The Hague?

GMW lawyers will be happy to help you with all your employment law issues. Our lawyers assist both employers and employees.

Do you have a question? Please feel free to contact us.

"*" indicates required fields

newsletter?

You might also like

Getting Started with the Future of Pensions Act as Works Council

22 July 2024

Getting started with the future of pensions act as works council

In this article, we provide some practical tips for the Works Council to have control over the complex pension dossier for the company and employees.

Read more

Read more about
Vakantiedagen tijdens ziekte afboeken van saldo of niet

8 July 2024

Vacation days during illness: deducting from balance or not?

A sick employee accrues vacation days in a normal manner. But does a sick employee always have to take days off when going on vacation?

Read more

Read more about
Do you require assistance with an employment dispute?

26 June 2024

Do you require assistance with an employment dispute?

Are you currently facing or anticipating an employment conflict? Employment conflicts can emerge in any workplace. Typically, such disputes can be resolved amicably.

Read more

Read more about
Making progress on the pay gap

19 June 2024

Making progress on the pay gap

Equal pay for men and women is a fundamental European right. In practice, however, there is a big difference between men's and women's pay. There are currently initiatives to reduce the pay gap through legislation in both the Netherlands and Europe.

Read more

Read more about
Ondernemingsraad 2024

17 June 2024

The Works Council in 2024

Companies with 50 or more employees are required by law to have a Works Council. In December 2023, the Minister reported that only 69% of such companies have established a Works Council.

Read more

Read more about
A second trial period: is that possible

27 May 2024

A second trial period: is that possible?

Many employers are in the understanding that a trial period can only be validly agreed upon in the first employment contract with the employee. However, this is not always the case.

Read more

Read more about
End of employment due to restructuring

13 May 2024

End of employment due to restructuring

You have your own business and employ up to 50 people. Unfortunately, for business economic reasons, you are forced to restructure and lay off some employees.

Read more

Read more about
The redeployment condition

1 May 2024

The redeployment condition: what can be expected from your employer?

An employment agreement can, in principle, only be terminated if the following conditions have been met:

Read more

Read more about
Changes to Dutch employment law some things to watch out for

24 April 2024

Changes to Dutch employment law: some things to watch out for

Dutch employment law is constantly changing. 2024 is no different with several interesting pieces of legislation are in the pipeline. Seliz Demirci from GMW Lawyers has the lowdown on the changes to Dutch employment law.

Read more

Read more about