Both employers and employees benefit from knowledge about the legal compensations after dismissal of an employee. DAG explains you the basics.
The case
Mrs. Johnson- Singh* works for a large multinational in Eindhoven. Her employment contract started at the 1st of May of 2020. Mrs. Johnson- Singh is experiencing some difficulties with her superior, mister De Vliet. His sense of humor is demeaning, according to mrs. Johnson- Singh. He tends to make remarks of her ethnicity in a negative way. He often described her home country as a backward bunch of people living between heaps of trash. Mrs. Johnson- Singh addressed the issue several times. Mister De Vliet replied that she should be a sport. He added that he did not say anything that isn’t true. She should be happy that she is finally living in a sophisticated country now, he stated.
Mrs. Johnson- Singh felt she was being judged on her ethnicity and that mister De Vliet’s biases about her home country influenced his opinion of her merits. She achieved her yearly goals consistently, yet was denied a promotion. When asked for an explanation, mister De Vliet replied that she should be grateful she is not working in a tea stall as she would in her home country. Mrs. Johnson- Singh snaps. The many years of tolerating the demeaning remarks result in a rant. Subsequently, mister De Vliet decides to dismiss mrs. Johnson- Singh, taking the notice period in account, on the ground of a disturbed working relationship. Per 1st of November 2023, her employment contract will be terminated.
Mrs. Johnson- Singh does not want the employment contract to be repaired. She asks DAG to assist her in getting the compensation she is entitled to. DAG has negotiated for mrs. Johnson- Singh and achieved satisfying results for her.
Transition compensation
The legal expert at DAG makes an thorough analysis of the situation and assesses the legal position cases like that of mrs. Johnson- Singh. Our lawyers will explain to you whether you qualify for a transition compensation and how much that will be.
The transition compensation is a legal compensation for the employee after dismissal. The amount corresponds with the duration of the employment contract. The most recent gross monthly salary is used for the calculation. For each completed year calculated from the start of the employment contract, a third of a monthly salary is granted to the employee. The remaining months are calculated according to the formula:
(gross salary over the remaining months/ gross monthly salary) x (1/3 gross monthly salary/12).
For example, if you complete three full years and seven months and your most recent salary was € 4,500.00, that will add up to the following calculation. For the three completed years you will receive three times a third of your monthly salary. That is € 4,500.00. The remaining seven months result to the following formula: (€ 31,500.00/ € 4,500.00) x ( € 1,500.00/12) = 7 x 125 = € 875.00. The transition compensation is € 4,500.00 + € 875.00 = € 5,375.00.
The transition compensation is a legal right, so the employer is obliged to pay this amount to the employee.
Reasonable compensation
In case there are culpable circumstances which have led to the dismissal an option for an additional compensation comes to mind. In case of seriously culpable conduct by the employer, the employee could demand a so-called reasonable compensation. This reasonable compensation does not have a fixed formula. The amount of the reasonable compensation depends on the extent of the culpability. The amount can be agreed upon in negotiations or decided by a court ruling.
The reasonable compensation you can receive, needs to be decided in either negotiations or in court. The amount is not very easy to predict. Jurisprudence on this matter is highly depended on the circumstances of each specific case and does not provide enough general indications to hold on to in this regard. At DAG, we are specialised in negotiating for a maximum reasonable compensation. In case this does not work out, we are also experts at serving your interests in court.
Other emoluments and compensations
The aforementioned two compensations do not cover the whole array of possibilities for employees. The lawyers at DAG can take many more elements into account for the settlement agreement.
Your situation
The specialists at DAG are highly suited to help you out with any legal issue regarding your employment contract. Feel free to discuss your questions with us over a cup of coffee.