From the first day of the employment contract, every employee starts accruing a transition payment ('transitievergoeding').
This payment is meant as compensation for dismissal and applies to permanent and fixed-term contracts. Sometimes, an employee has no right to a transition payment, for example, when an employee is dismissed due to seriously culpable acts ('ernstig verwijtbaar handelen').
The law dictates how the transition payment should be calculated: the length of the employment contracts translated directly into the size of the payment. But what if the employee had several consecutive employment contracts with employers closely affiliated with each other?
The facts of the case
The employee in the case before the District Court The Hague claimed a higher transition payment following the termination of her latest employment contract. In the course of almost ten years, she had been working in similar roles for two employers who were closely affiliated with each other. She, therefore, argued that her employment for both companies should be seen as continuous and successive employment, leading to a higher transition payment.
The court's decision
The court, however, did not agree. According to Article 7:673 paragraph 4 under b of the Dutch Civil Code (DCC), one or more previous employment contracts, which have followed each other at intervals of no more than six months, are added together for calculating the transition payment. This also applies if the employee has been successively employed by different employers who, irrespective of whether there is an understanding of the employee's capacity and suitability, must reasonably be regarded as each other's successors concerning the work performed.
Termination by the employee
Based on the legislative history, there is no question of successive employment within the meaning of Section 7:673(4)(b) of the DCC if the employee terminated the previous employment contracts with the affiliated employers on his/her own initiative. In this case, the employee had terminated the employment contracts on her own initiative, so the court dismissed the employee's claim for a higher transition payment.
This ruling emphasizes the importance of distinguishing between voluntary employment terminations and successive employment in transition payments under Dutch labour law.