In Amsterdam, where the labor market is vibrant with numerous startups and scale-ups in the Zuidas and the Jordaan, the transition compensation is a crucial right in cases of dismissal. However, there are important exceptions where employers are not required to pay. According to Article 7:673(7) of the Dutch Civil Code (BW), the right to transition compensation lapses in cases of dismissal due to seriously culpable conduct by the employee, such as theft or fraud—consider cases in Amsterdam’s hospitality businesses or tech startups.
In the event of bankruptcy or suspension of payments, often seen among vulnerable SMEs in East Amsterdam, the compensation is handled via the UWV trustee. This is not always paid in full, particularly given the numerous bankruptcies during the COVID-19 pandemic. For fixed-term contracts that expire naturally without termination—common in Amsterdam’s flexible gig economy—there is no entitlement to transition compensation.
Before 2020, special rules applied to employees aged 50 and over, but now the standard calculation is used, which is relevant for the aging workforce in Amsterdam-Noord. In reorganizations, such as those involving large employers around Central Station, a collective agreement may replace individual compensation, provided it is equivalent. Note: resignation at the employee’s own initiative, such as termination during illness, nullifies the right to compensation.
Employers in Amsterdam may offset the compensation through a settlement agreement, but only with explicit arrangements. While these rules will not change in 2025, it is advisable to check collective labor agreements (CAOs) in sectors such as real estate or the creative industry for local nuances. If you are uncertain about your situation, consult a law firm in the Negen Straatjes or the Amsterdam Legal Aid Office to prevent disadvantage and safeguard your rights.