Overhaul of termination procedures
6 August 2007, THE HAGUE - A proposal has been drawn up by the Dutch government to establish a standard scale of compensation for employee termination.
6 August 2007
THE HAGUE - A proposal has been drawn up by the Dutch government to establish a standard scale of compensation for employee termination.
For employees under 40 years of age, the compensation would be one month's pay per year of service. This multiplier would rise to one and a half month's pay for those aged 40-50 and two months for those aged over 50. A ceiling of EUR 75,000 would be placed on total compensation (EUR 100,000 for older employees).
The introduction of the standard compensation scale would remove the necessity for employers to seek permission from the Centre for Work and Income or a court before dismissal can take place.
However, it would create a further obligation upon employers to retrain redundant staff to improve their chances of securing fresh employment.
The proposal has now been sent to the joint employer/union Foundation for Labour (STAR), which will issue its opinion on 1 September 2007. Changes in termination rules are unlikely to be acceptable to trade unions and it is doubtful whether the Dutch coalition government will have the strength of purpose to seek parliamentary approval in the face of union opposition.
Subject: Dutch news