The Decree on Compensation for the Transition Payment on Closure of Business Activities took effect on 1 January 2021.
When an employer retires, they will first try to find a successor, by transferring the business to someone within it or by selling it. If the employer dies, their heirs will try to continue or sell the business. Where this does not succeed and the business closes, the employer must dismiss all employees and pay each of them a transition payment. A small business owner cannot be expected to plan far in advance for a situation where no one takes over the business. That employer can therefore request compensation from the UWV for the transition payment paid due to the ending or non-continuation of an employment contract, resulting from the business closing due to retirement or death.
A number of cumulative conditions apply:
- The jobs were lost as a result of the business closing;
- The employer has fewer than 25 employees; and
- The employer must have reached retirement age or have died.
Only transition payments paid on or after 1 January 2021, following dismissal due to business closure through retirement or the employer’s death, can be compensated.
For the full Decree, click here (in Dutch).
Questions about the above? Please contact one of Sørensen Advocaten’s employment lawyers. Call: +31 (0)10-2492444
