What is Offboarding?
Offboarding
As an international employer with employees in the Netherlands, it's important that you understand offboarding. If you’re an expat working in the Netherlands, you might be wondering about it as well. Offboarding refers to the process of managing an employee's departure from your organization, whether due to termination, resignation, or the end of a contract. In this blog post, we'll look into the meaning of offboarding, highlight the differences with onboarding, and discuss the best practices for a smooth offboarding process.
What does offboarding mean?
Offboarding covers all the steps and procedures involved in an employee's exit from your company. This includes handling administrative tasks, transferring knowledge, and ensuring a positive departure experience for the employee. When an employee leaves, there are various options for managing their departure, and the entire process is collectively known as offboarding.
Onboarding vs Offboarding
While onboarding focuses on integrating a new employee into your organization, including administrative tasks, providing necessary equipment, and helping them adapt to the company culture, offboarding deals with the process of an employee's exit. Onboarding aims to set the stage for a successful employment relationship, while offboarding aims to ensure a smooth and compliant separation.
The Offboarding Process
In the Netherlands, terminating an employee's contract is not a straightforward process. There are specific scenarios in which termination is permissible:
1. Operation of law: The contract expires and is not renewed.
2. Settlement agreement: A mutual agreement between the employer and employee to end the employment relationship.
3. Approval from the court or UWV (Dutch Employee Insurance Agency): If a settlement agreement cannot be reached, the employer must seek approval for termination from the court or UWV.
Although every termination is different, we often find that a settlement agreement is the most advantageous option. It's advisable to draft the agreement with the assistance of a lawyer to ensure compliance with Dutch labor law.
Tranfser of employment
At Employor, we often encounter another form of offboarding called "transfer of employment." Many employers can directly hire the employee during our contract period once they become a recognized sponsor themselves. Employor offers the flexibility to terminate the contract early, allowing the employer to hire the employee directly. This means our clients are not bound by the full contract duration.
However, Employor does have certain conditions:
- A minimum contract duration of 3 months
- A one-month notice period. If the notice period is not observed, an additional service fee will be charged.
Administrative Matters
When offboarding an employee, consider the following administrative aspects:
1. Handling contract clauses: Review the employee's contract to determine if they are entitled to any bonuses or compensation that must be paid out before their departure.
2. Vacation days: Outstanding vacation days must either be taken before the end date or paid out to the employee. If your company directly hires the employee, you’ll have the option to transfer the vacation days.
3. Transition payment: In some cases, the employee may be entitled to a transition payment. The amount is determined by the contract duration and salary, typically equating to 1/3 of the monthly salary per year of employment. The payment is made if the employer terminates or does not renew the contract.
Offboarding Highly Skilled Migrants
When offboarding a highly skilled migrant (‘kennismigrant’ in Dutch), you must take additional steps. A highly skilled migrant requires a residence permit to work in the Netherlands, and only an employer recognized by the IND (Dutch Immigration and Naturalization Service) can apply for this permit on their behalf. If a highly skilled migrant loses their job, it affects their residence permit. You’ll have to deregister the employee with the IND and consider the impact on their legal status in the Netherlands. More information can be found on the IND website: Kennismigrant | IND.
Best Practices of Offboarding
1. Stay informed about labor laws and understand when you can legally terminate an employee's contract.
2. Keep track of the employee's vacation days to avoid having to pay out a large number of days at the end of their employment.
At Employor, we offer the flexibility to terminate the contract early once the client can directly hire the employee, a service not commonly provided by payroll providers. Our team includes a legal advisor with a masters degree in labor law who can assist with offboarding matters. We also partner with labor law attorneys for complex questions that we cannot address internally.
By implementing a streamlined process, Employer has tackled the challenge of offboarding hundreds of employees. Through a combination of systems and personal guidance, we ensure that each departure proceeds smoothly. Our approach includes timely communication, clear checklists, and support with administrative tasks, allowing both employers and departing employees to maintain a positive experience. This method enables us to handle even large numbers of employee exits professionally and with minimal disruption to business operations.
