Judges agree to cut redundancy payouts

Friday 31 October 2008

The traditional formula for determining how much cash an employee is entitled to if they lose their job is to be amended to give lower payouts to younger workers, various newspapers report on Friday.

The trade unions are furious at the decision, announced by the association of civil court judges on Thursday, says the Financieele Dagblad.

The timing of the change, in the midst of the financial crisis, is ‘completely unacceptable’ said the country’s biggest union federation FNV.

Under the current system workers are entitled to one month’s salary for every year of service for staff up to 40 years old with the amount increasing with the age of the employee. But as from January 1, employees under 35 will only get half a month’s salary per year and all the age categories will all be raised.

The changes will hit young workers the hardest and create a bigger gap between their rights and those of older staff, the paper says. Judges say younger workers' position on the labour market has greatly improved in recent years so they will find it easier to find a new job.

The position of the employer will also be affected under the new system. If a company’s annual report can prove that a particular redundancy package is too high, the judge wll have the power to lower it.

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© DutchNews.nl

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