The purpose of the Nomination of Top Income Act (hereafter: WNT) is to prevent excessive remuneration and severance payments at institutions in the (semi) public sector. Based on the WNT, a maximum compensation of EUR 75,000 can in principle be paid in the event of termination.
This summer, however, the Court of Appeal of ‘s-Hertogenbosch has ruled that an employee to whom the WNT applies is entitled to a higher severance payment because of the fixed compensation for irregular termination. Read below to find out how the court came to its decision.
What was involved here?
Since January 1, 2016, the employee concerned has worked as a statutory director of a foundation that aims to help clients to improve or maintain their own lives as much as possible. In mid-2021, the foundation’s finances begin to deteriorate, and criticism of the director’s performance starts to appear. On April 12, 2022, the director receives a letter informing him that his employment will be terminated effective May 1, 2022.
The director believes that he is entitled to fixed damages of €101,228.88 because the agreed six-month notice period was not observed. The employer, on the other hand, argues that he is only entitled to a maximum amount of €75,000 under the WNT, as this compensation is related to the termination of the employment agreement.
Decision of the Court of Appeal
The Court of Appeal is of the opinion that the director is in fact entitled to a fixed compensation in the amount of € 101,228.88. Although the WNT provides for a maximum severance payment of EUR 75,000, there are exceptions for payments based on a general provision of a collective bargaining agreement or a statutory provision. The fixed compensation in the event of irregular termination is based on a statutory provision and is therefore an exception to the fixed maximum of EUR 75,000. It is important to note that in this case, the court considered that there was no trick to avoid the WNT, as there was a clear case of conflict between the employer and the employee.
Source: Court of Appeal ‘s-Hertogenbosch, August 10, 2023, ECLI:NL:GHSHE:2023:2603.