In the event of a partial termination, the employee is entitled to a partial transition fee if the conditions set by the Supreme Court in 2018 in the Kolom decision are met. It is possible that an employee is re-employed into a position with a substantial loss of income, without there being any reduction in working hours. In that case, is there also an entitlement to a partial transition fee?
Kolom decision
The Supreme Court ruled in 2018 in the Kolom decision on the entitlement to a partial transition fee. Where circumstances compel a substantial and structural reduction in the employee's working hours, such an entitlement exists. For example, if the working hours of a long-term ill employee is reduced due to his medical limitations, or if positions will lapse due to commercial circumstances. There is a substantial reduction in working hours if the reduction is at least 20%.
In 2018, the question remained unanswered as to whether the employee is also entitled to a partial transitional fee when there is a substantial loss of income due to re-employment, while the working time has remained the same. Recently, the Supreme Court provided more clarity.
The Facts
The employee, a teacher, was ill since January 2013. Before she became ill, she worked full time (100%). Two years later, the UWV declared her to be more than 48% unfit for work. After two years of illness, she remained for 80% employed in the lower-paid position of teaching assistant. The Court of Appeal of The Hague had ruled that the employee was in any case entitled to a partial transition fee in connection with the reduction of her working hours by 20%.
In addition, the Court of Appeal submitted preliminary questions to the Supreme Court in connection with the entitlement to a partial transition fee because of the salary reduction associated with the change of position.
The Supreme Court
The Supreme Court considered that the employer owes an employee a transition fee if, in brief, the employer terminates an employment agreement. Termination is a condition for entitlement to a transition fee.
According to the Supreme Court, it is not compatible with this statutory system to be entitled to a partial transition fee in the event of loss of income due to re-employment into a position with a lower salary. Re-employment without loss of working hours does not qualify as termination but precisely a way of preventing the employment agreement from being terminated. Re-employment into a position with a lower salary is also not in line with a partial termination as under discussion in the Kolom decision.
If there is a reduction in income of at least 20% caused by both a structural (but not substantial) reduction in working hours and a reduction in salary, there is also no entitlement to a partial transition fee. A transitional fee is therefore only due if there is a structural and substantial reduction in working hours.
To conclude
In this judgment, the Supreme Court provided more clarity on the interpretation of the Kolom decision. Re-employment into a lower-paid position cannot be put on a par with a partial termination of the employment agreement. A reduction in salary does not give entitlement to a transition fee.
