Rush to layoff temp workers as social benefit deadline looms
Employers in small and medium sized enterprises have laid off hundreds of employees these last few days in an effort to avoid the new work and security law, and the severance pay it entails, which took effect today.
This is according to a survey done by the Volkskrant among lawyers whose information the paper got from benefits agency UWV. Last week the lawyers received a massive 1,450 dismissal application, more than double compared to previous weeks.
From today every employee, including temporary workers who worked at the same place for 2 years, will now receive a so-called transition allowance upon dismissal for economic reasons. That fee is a minimum of one third of the monthly salary for every year the employee worked. This makes dismissals more expensive, especially for the about 250 employers in small and medium sized enterprises. By requesting a dismissal before this date, they avoid the transition fee.
A spokesperson for the Ministry of Social Affairs told the Volkskrant that it was expected that employers would quickly figure out what is most advantageous, but the UWV will only give permission for a dismissal if there is a good reason. "If there is no work, the law can not prevent dismissal. But those who are dismissed must be treated fairly."
According to Pascal Besselink, labor lawyer at legal service DAS, this new law have forced small and medium businesses to reorganize early. "Companies that otherwise still would have waited, have decided to do it now before July 1st. Then it costs them nothing, while in October, November they sometimes would have had to pay hefty fees to staff employed with them for long."