Posted on: 26-02-2020

Transition Payment Bonus counts

Written by:

Hein Kernkamp

But does every bonus count?

The principles for the calculation of the amount of the transition payment are laid down in the Decree that regulates the calculation method for the transition payment to be paid by the employer at the end of the employment contract.
This yields the following components:

  • The gross monthly salary
  • Holiday allowance
  • Agreed fixed wage components in the last 12 months (such as commission and piece wages)
  • Agreed variable wage components in the last 36 months (such as a profit distribution)

Transition fee; Bonus usually counts

A bonus should fall in the third category (if it has the bonus character of a commission), or in the fourth category (if it is a profit payout). As a rule, the employer simply counts the average agreed bonus for the past three years in determining the basis for the transition payment.

Exception

A bonus can also fall outside the wage definition. In the explanatory memorandum to the decree, the minister writes that a distribution of profit does fall under the wage definition, but a gratification or voluntary gift fall beyond the definition. So if the employer is nice and gives out some extras, then that should not have any consequences for the amount of the transition payment in case the employment contract ends.

transition payment bonus counts

The non-agreed bonus

As a consequence of this rule an employee who had received a bonus in recent years fell outside the boat. Both the sub-district court judge Zeeland-West-Brabant and the Gerechtshof Den Bosch did not include this bonus in determining the amount of the transition payment. The subdistrict court judge based his decision on the fact that it had not been stated or proved that there was an agreed variable wage component.

The Court of Appeal also ruled that the annual bonuses that were paid out could not be regarded as an agreed variable salary component, because the bonuses had not been agreed. Here the bonus was simply regarded as something like a gift from the boss.

Information

We regularly advise on termination of employment and the consequences thereof. We can support you in the negotiation process, or negotiate on your own. If you have any questions, please contact us. Our motto is not for nothing: your problem, our concern.

More information?

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