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    Receiving severance pay in 16 instalments

    Organizations affected financially by the coronavirus pandemic may be allowed to pay statutory severance pay in instalments, as ruled by the Court of Amsterdam.

    Restaurant

    The case in question dealt with a difference in opinion between an employee and his employer about the duration of the former’s employment contract. The employee, a chef for the restaurant, had been dismissed for economic reasons and could not reach an agreement with his employer about the amount in statutory severance pay he was entitled to. The employee claimed he started working for the restaurant in 1993, therefore he demanded statutory severance pay as calculated from that year. However, the employer had taken over the restaurant in 2017, therefore he claimed he only had to pay statutory severance pay as calculated from the year of the takeover. The employer nonetheless refused to pay any severance pay due to the poor financial situation of the restaurant.

    Severance Pay

    Evidence submitted to court revealed the employee had indeed worked for the restaurant since 1993. The judge therefore ruled that the years before the takeover had to be included in the calculation of the severance pay. Moreover, the poor financial situation of the restaurant was not deemed grave enough to waive the employee’s right to severance pay. However, the judge did agree that the poor financial situation was caused by the coronavirus measures and the employer himself could not be blamed for it. The ruling therefore was that the employer was allowed to pay the due severance pay in 16 instalments. Interesting, given that current rules state that severance pay can be paid in at most 6 instalments. Moreover, the economic crisis also made the judge decide to not further increase the amount in statutory severance pay, not even adding statutory interest as a result of litigation.

    Court of Amsterdam, May 6, 2021; ECLI (abridged): 2209

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