Working in the Netherlands

Working in the Netherlands

Dutch Labour Law for Managers: Transitional Allowance, Dismissed Employees

Dutch Labour Law. Be prepared and informed.

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An employee who’s employment was ended by the employer, requested a transitional allowance from the employer.  The employment lasted exactly 24 months.

According to Section 7:673 subsection 1 of the Dutch Civil Code an employee has the right to a transitional allowance if the employment relations lasted at least 24 months.

In this Dutch Labour Law case, the employer interpreted Section 7:673 subsection 1 of the Dutch Civil Code as that the employment relation must have lasted longer than 24 moths and the employee is not entitled to a transitional allowance.


The judge found in the Dutch Labour Law case that the employer misinterpreted the stipulations of  Section 7:673 subsection 1 of the Dutch Civil Code. The article stipulates that the employment relation must have lasted at least 24 moths and that the employer is entitled to a transitional allowance.

Good to know

  • Until 1 July 2015, the amount of the redundancy package was calculated with the so-called kantonrechtersformula. Transition allowance was introduced for employees who were employed for at least 2 years by the employer for whom the employee was working.
  • The transition allowance is calculated as follows: on the first 10 years of employment, the employee receives 1/6 of the monthly salary per 6 months. With an employment relationship that is longer than 10 years, the employee receives 1/4 of the monthly salary per 6 months. Employees older that are 50 years or older and at least 10 years employed by the company will receive 1/2 of the monthly salary for each period of 6 months after you reached the age of 50. The maximum transition allowance is € 77,000 (figure 2017) or 1 annual salary if that is higher. For the calculation, the employment period is rounded down on 6 months.
  • In the case of very serious culpable act on the part of the employer, the Court can award the employee an additional compensation.




Case: 5664602 AZ VERZ 17-8

Finding: 09-03-2017

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Link to case:

Tags:  Dutch Labour Law, transitional allowance, Section 7:673 1 of the Dutch Civil Code





Andre Beukes LLM

Andre Beukes LLM

André Beukes is an EU Management Consultant to international companies doing business in Europe. He provides clients with practical business support that makes a real difference doing business in the EU. “Put simply, I am here to help you meet your challenges. I believe in the importance of doing things correctly, meaning risks are reduced and problems are avoided.”

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