23 Mar 2021 Calculation of the transition payment for 'standardized' public servants
The WNRA and the partial transition payment
In the event of partial termination of the employment contract, for example due to illness, employers usually also owe employees a partial transition payment. In a recent judgment, however, this worked out differently for a former civil servant.
In a case submitted to the Haarlem subdistrict court (link) it concerned an employment contract of a public servant of the municipality of Haarlem. Since 1 January 2020, his legal position has been 'standardized'. This means that - on the basis of the Public Servants (Standardization of Legal Status) Act (in Dutch: WNRA) - the municipal public servant became subject to regular civil employment law. Previously, the legal position of public servants was governed by the Central and Local Government Personnel Act (in Dutch: Ambtenarenwet), which contains rules that differ from regular employment law.
The municipality of Haarlem terminated the employment contract of the public servant in question. He had been employed since 1977, for 36 hours a week. In September 2016, the public servant became ill. After two years of illness, a WIA benefit was awarded, based on 50% occupational disability. Because the public servant was therefore still able to work for 50%, his appointment was reduced from 36 to 18 hours per week as of 1 January 2019 (in the third year of illness). In January 2020, the appointment was converted into a regular employment contract on the grounds of the WNRA. Hence, the public servant became a ‘regular’ employee, to whom the rules of the Dutch Civil Code apply.
In June 2020, the municipality terminated the employment contract due to the employee’s illness. The municipality paid a transition payment, based on the last earned salary, for 18 hours per week. This led to a transition payment of €40,459.15 gross.
The employee disagreed and claimed a transition payment of €79,299.94 gross. He argued that his appointment had been reduced to 50% in 2019 during the third year of illness, and at that point he had not already received his transition payment in part (pro rata). Therefore, the employee claimed that he is still entitled to a full transition payment on the basis of a 36-hour working week.
The Subdistrict Court ruled as follows. The so-called 'wage definition' has been elaborated in the Decree concerning Wage Definition relating to Compensation for Notice Period and Transition Allowance (in Dutch: Besluit loonbegrip vergoeding aanzegtermijn en transitievergoeding). This Decree stipulates in article 2 about the wages and the working hours (as a basis for the calculation of the transition payment) that it concerns:
the gross hourly wage multiplied by the agreed working hours per month, or, if no or varying working hours have been agreed, the gross hourly wage multiplied by the average number of hours worked per month:
a) in the twelve months preceding the termination of the employment contract; or
b) if the duration of the employment contract was less than twelve months, for the duration of the employment contract.
a) in de twaalf maanden voorafgaand aan het moment waarop de arbeidsovereenkomst eindigt; of
b) indien de duur van de arbeidsovereenkomst korter was dan twaalf maanden, gedurende de duur van de arbeidsovereenkomst.
As mentioned earlier, the public servant's appointment was reduced to 50% in the third year of illness, when he became entitled to a 50% WIA benefit. However, this was before the WNRA came into effect, which meant that the public servant did not yet fall under regular labour law but under the Central and Local Government Personnel Act. Here, it is crucial to note that, based on case law, a ‘regular’ employee, not being a public servant, would probably have been entitled to receive partial transitional compensation (pro rata) in the event of a reduction of the working week to 50%. This case law is known as the Kolom decision.
However, because the public official still had public servant status at the time, these rules of employment law did not (yet) apply to him. The servant argued that it is contrary to the principles of reasonableness and fairness that he now receives only 50% of the transitional allowance. The Subdistrict Court, however, did not go along with this argument: (very) heavy demands are made, when it comes to deviation from the statutory provisions on the grounds of reasonableness and fairness. The judge must exercise great restraint in this respect. The (former) public servant was therefore only entitled to receive the transitional allowance on the basis of 18 hours, even though he had always worked 36 hours before.
Do you also have questions about the (partial) transitional compensation, the Public Servants (Standardization of Legal Status) Act or termination of an employment contract during illness? The experience employment lawyers of SPEE advocaten & mediation will be happy to assist you.