An employee who is made redundant is usually entitled to a transition payment. Are you also entitled to this payment if you are not made redundant but your employer reduces your hours (part-time redundancy)?
Transition allowance
The law does not specify this. The rules governing the transition payment are based on the full termination or dissolution of the employment contract.
If the employee has been in service for two years or more and the employment contract is terminated by the employer, the employee is entitled to a transition payment. The reason for the dismissal is irrelevant in this respect. The employee is not entitled to the transition payment only in the event of (justified) summary dismissal, serious culpable conduct on the part of the employee, the employer’s bankruptcy, or dismissal in connection with the employee’s retirement.
The maximum transition payment is €79,000. For each of the first 10 years of employment, the employee receives one-third of a month’s salary, and thereafter half a month’s salary for each year.
Part-time redundancy
The Supreme Court has recently ruled that, in the event of a partial redundancy, an employee may also be entitled to a portion of the transition payment. It does not matter how the working hours are reduced:
- partial termination of the employment contract;
- full redundancy, followed by a new employment contract with fewer hours;
- (unilateral) amendment to the employment contract.
Of course, the transition payment is not payable if the working hours are reduced at the employee’s request.
A partial transition payment may be payable in the event of a reduction in working hours due to commercial reasons or partial incapacity for work. Furthermore, the reduction in working hours must be 20% or more, and the reduction must be expected to be permanent.
It is not clear how to proceed if, following a reduction in working hours, the number of hours is increased again (for example, because the company’s financial situation has improved) and full redundancy is eventually implemented. The Supreme Court will certainly be asked to rule on this matter again in due course.