Cantonal Court Formula
After the employment termination notification, the parties should decide whether severance compensation will be paid, and how. In other words, will you receive a compensation to get out of this difficult situation or a compensation for damages? What will its scope be?
A monetary compensation called "golden handshake" is an amount of money that the employer gives you in case of employment termination. In many cases, it is paid to compensate the salary loss; for example, to supplement unemployment subsidy or a lower pay in your new job. Also, it can be used to compensate a difference in the retirement pension. Likewise, it may happen that the dismissal damages your reputation. Indemnification can be a means to make up for those damages. This type of compensation is known as "personal damage compensation".
The value of the economic compensation can be determined by the cantonal court or by mutual agreement between you and the employee. Starting on January 1, 1997, in order to estimate the cost of the indemnification, the court uses what is known as the cantonal court formula. According to this formula, the court estimates what is reasonable in each case.
The cantonal judge formula comprises diverse factors: years of service (a), monthly gross salary (b), and the special circumstances expressed in figures (c). Is bad performance attributable to the employer or the employee? Who spoiled the work relation? Does the employee have another job or prospects of having one? Why couldn't the employee be reinstated after an illness?
In case of dismissal, it is important to act quickly and meticulously. Never sign anything, because you could lose your rights. Request time to think about it, so you can contact a lawyer in time.
For further information about the cantonal judge formula, visit www.rechtspraak.nl