Dismissals cost employers EUR 4 billion a year

8th January 2008, Comments 0 comments

According to a study of 2006 data it costs employers in the Netherlands around EUR 4 billion each year to dismiss employees.

8 January 2008

AMSTERDAM - According to a study of 2006 data carried out by the Hugo Sinzheimer Institute, it costs employers in the Netherlands around EUR 4 billion each year to dismiss employees. It was found that each dismissal cost on average EUR 17,000 euros in the private sector and EUR 33,400 in the public sector. The principal cost elements were the severance package itself, payment of ongoing salaries until a court hearing or Centre for Work and Incomes (CWI) decision, administrative overheads and legal fees.

Average redundancy packages amounted to EUR 6,000 and ongoing salaries EUR 6,800. Around half of all dismissals were carried out via the CWI and in about half of these cases employers did not have to pay any redundancy compensation. In cases that went to court for dissolution, 90 percent of employees received compensation. The average compensation received by an employee via a court was three times higher than individual dismissals via the CWI.

Higher-paid employees also tended to gain more generous severance packages than lower-paid employees. On average, an employee made redundant with a monthly income of up to EUR 2,700 received two months' salary. Between EUR 2,700 and EUR 3,600, this rose to three months' salary, whilst those on monthly salaries over EUR 3,600 received 5.4 months' salary.

[Copyright: FedEE Services Ltd 2008]
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Subject: Dutch news

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