As opposed to earlier presumptions, the Supreme Court has ruled that when determining reasonable compensation (billijke vergoeding), the consequences of the termination for the employee should be taken into account.

According to the Supreme Court, what the (former) employee would have earned if he/she were reinstated instead of terminated can play a role. The (hypothetical) duration of the employment contract in that case would depend on the specific circumstances of the case. For instance, whether the employer could have terminated the employment contract lawfully ‒ and if so ‒ what the applicable notice period would have been. When assessing if and to what extent the pay the employee would have received if the termination were declared void, the following circumstances could be of importance:

• the level of culpability attributed to the employer

• whether the reason the employee did not request reinstatement can be attributed to the employer

• whether the employee has already accepted a new job, and what his/her income is

• the income that the employee can reasonably earn in the future

• the transition payment paid

Unfortunately, this decision does not yet provide a fixed formula for determining the reasonable compensation. It merely provides a list of factors that could play a role in determining the reasonable compensation. We will keep you informed of further developments.