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    Statutory severance pay is quite a burden

    Fewer and fewer organizations have enough money at their disposal to pay statutory severance pay in the event of a dismissal, as found in a survey by BNR News Radio. Parties that provide employers with legal advice notice that (often small-sized) organizations are in financial problems and therefore make the decision to dismiss employees. However, the right of employees to receive statutory severance pay then makes it difficult to actually continue with the dismissals. Yet, not dismissing them will not solve the financial problems and may even cause bankruptcy. The situation thus calls for good discussions to be held between employers and employees. Many hope that the government will pre-finance statutory severance pay and that the bill can be settled at a later stage, when the economic situation has improved. The Cabinet of the Dutch government has stated that they do understand the problem, but that they will not ‘participate’ in dismissals by pre-financing statutory severance pay.


    There aren’t many option to avoid having to pay statutory severance pay, unless your organization is declared bankrupt or a deferral of payment is in effect. However, under certain conditions there is the possibility to spread the payment of severance pay over a number of instalments. Spreading as such is allowed over a period of six months at most.

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