Public sector pays highest compensation
20 July 2007, THE HAGUE – The public sector and educational institutes last year had the highest expenditure on dismissals. Minister of Social Affairs Piet Hein Donner sent the outcome of the investigation carried out by the Hugo Sinzheimer Institute to Parliament on Thursday.
20 July 2007
THE HAGUE – The public sector and educational institutes last year had the highest expenditure on dismissals. Minister of Social Affairs Piet Hein Donner sent the outcome of the investigation carried out by the Hugo Sinzheimer Institute to Parliament on Thursday.
Earlier this week it had already been announced that the number of dismissal cases had declined by 25 percent. The total dismissal costs for employers amounted to between EUR 3.5 and 4 billion in 2006.
On average, apart from peaks and lows, employers in the private sector, paid EUR 17,000
per employee, while the public sector and educational institutes spent an average of EUR 33,400 per dismissal.
The costs include: compensation for the dismissed employee, salary paid while the employee has stopped working and the administrative and/or legal costs. The public sector and the educational institutes paid by far the most in compensation (an average of EUR 16,700 against EUR 6,000) and salaries paid (13,300 against 6,800 on average).
To dissolve the labour contract employers can either go to court or apply for a licence with the Centre of Work and Income (CWI). About 50 percent of the dismissal cases is settled via the CWI, and in about 50 percent of the cases employers need not compensate employees, according to the CWI. Approximately one in ten received a golden handshake after the case had been taken to court.
It is often cheaper for employers if dismissal cases are handled by the CWI. It appeared that the average compensation in monthly salaries is three times higher after a court ruling than in individual dismissals via the CWI.
Dismissal compensation increases drastically the higher the employee’s income. An individual with a monthly income up to EUR 2,700 was given two monthly salaries on average, those on an income between EUR 2,700 and 3,600 were paid three monthly salaries, whereas individuals with an income of over EUR 3,600 were paid 5.4 monthly salaries in compensation. Compensation increases the longer employees have been in employment.
[Copyright Expatica news + ANP 2007]
Subject: Dutch news