Fair compensation: 4,252 rulings analyzed. Part 1: The amount.

I used AI to analyze 4,252 court rulings on fair compensation. The results surprised me: the average is €42,243, but the median is only €15,000. The prevailing view is too optimistic.

How much in equitable compensation can the parties expect? What factors determine whether the amount will be €5,000 or €100,000? To answer these questions, I used AI to analyze all published rulings on equitable compensation since the Work and Security Act took effect on July 1, 2015. In this first part: the figures. In Part 2: the factors that determine the amount.

1. Research Design

Using the Open Data API on rechtspraak.nl, I collected all court rulings from district courts and courts of appeal from July 1, 2015, to March 29, 2026, filtered by the legal category of civil law (labor law), in which the term “fair compensation” appears or in which reference is made to the relevant statutory provisions. This yielded 4,252 rulings. To the best of my knowledge, this makes it the most comprehensive empirical study on the amount of fair compensation since the Wwz came into effect.

Fair compensation in connection with non-compete clauses and mass layoffs has been excluded from consideration. Similarly, Article 7:682(4) and (5) of the Dutch Civil Code did not yield sufficient case law to warrant a separate analysis. Case law based on the old dismissal law in effect prior to July 1, 2015, has also been excluded.

For each ruling, I extracted the legal basis, the amount claimed and awarded, the salary, the duration of employment, the employee’s age, the transition payment, and the factors the judge considered in determining the amount. The extraction was validated by manually checking 100 rulings. The core factual fields (amounts, basis, outcome) were correct in approximately 94% of cases. For the considerations (which factors the judge took into account and in what direction), the accuracy was around 85–90%.

Decisions by the Supreme Court (183 in total) have been excluded: the Supreme Court does not issue budget estimates itself but establishes legal principles. One decision involving an amount in foreign currency has also been excluded. The years 2015 and 2026 contain 13 and 28 rulings, respectively; these numbers are too small to yield reliable averages and are excluded from the trend analysis.

Of the 4,252 rulings, 1,044 awarded equitable compensation in an amount greater than zero. After excluding the ruling in foreign currency, 1,043 awards remained. For 1,022 of these, the legal basis could be determined. The analyses by legal basis are based on those 1,022 rulings. The total figures are based on all 1,043 rulings.

In this study, I have included not only the average but also the median. The median is the middle value: half of the fair compensation amounts awarded are above it, and half are below. When it comes to fair compensation, that distinction is relevant. The distribution is skewed: many relatively low amounts and a small number of very high outliers. Those outliers pull the average up, while the median provides a more realistic picture of what the average employee actually receives. To illustrate: the average of all fair compensation awards in our dataset is €42,243, the median €15,000. Existing legal literature generally reports only averages, which, in my view, paints a rosier picture than the reality for most employees.

2. The trend: average annual compensation (2016–2025)

Over the period examined, the average fair compensation awarded ranged from €21,000 to €60,000. The median is more stable, ranging from €10,000 to €23,000. This difference tells an important story: a relatively small number of high outliers significantly skew the average upward, while the typical fair compensation is considerably lower.

The number of awards is growing steadily: from 51 in 2016 to 139 in 2025. This does not necessarily mean that judges are awarding fair compensation more often; in any case, there is more published case law available.

3. What are the benefits of each approach?

The legal basis makes a big difference. In the case of a voidable termination (Art. 7:681 BW), typically an unjustified summary dismissal, the median is €7,500. In the case of serious culpable conduct by the employer upon termination (Art. 7:671b(9)(c) BW), the median is €31,000. Directors (Art. 7:682(3) BW) receive a median of €95,000.

The explanation makes sense. Under Article 7:681 of the Dutch Civil Code, the employer has often been able to terminate the employment contract through other means, thereby limiting the loss of income. In addition, the fixed compensation acts as a deterrent. Under Article 7:671b of the Dutch Civil Code, the starting point is the loss of income over the expected remaining term of employment, which can amount to a substantial sum in the case of long-term employment. For executives, higher salaries and longer notice periods play a role.

The two largest categories are termination subject to annulment (502) and gross misconduct on the part of the employer (392). Together, they account for approximately 87% of all equitable compensation awards. The appeals category (68) constitutes a middle group.

The "g" ground (deterioration of the working relationship) is by far the most common ground for dismissal in cases where fair compensation is awarded due to serious culpable conduct. In the vast majority of cases involving a voidable termination (Section 7:681 of the Dutch Civil Code), the termination is a summary dismissal that is found to be invalid.

4. By years of service and salary

The length of employment is closely linked to the amount awarded. For employment lasting 0 to 2 years, the median amount is €6,800. For 20 years or more, this rises to €45,000. This is consistent with the principle that loss of income serves as the benchmark: the longer the period of employment, the greater the expected remaining duration of employment—and thus the greater the loss.

The average for 5–10 years of service and 10–20 years of service is at a similar level (approximately €55,000). This is explained by the fact that the composition of each group differs. The median, however, shows a gradual increase: from €25,000 to €27,500. If we look exclusively at termination cases due to serious culpable conduct, the trend is clearer: from a median of €37,866 for 5–10 years to €50,000 for 10–20 years.

Salary shows an even stronger correlation. For a gross monthly salary below €2,500, the median fair compensation is €5,418. For a salary above €10,000 per month, the median is €101,055. This, too, can be explained by the loss of income model: higher salaries mean higher monthly losses over the same remaining duration.

5. Relationship to the transition payment

In 787 rulings, both the equitable compensation and the transition payment are specified. The average ratio is 6.1 times the transition payment, but the median is 2.4 times. In other words, in half of the cases, the equitable compensation is less than 2.5 times the transition payment, but outliers push the average up to more than 6 times.

The picture varies by case. In cases of voidable termination (Section 7:681 of the Dutch Civil Code), the average is 8.6 times the transition payment, but the median is only 2.7 times. The high average ratio under Section 7:681 of the Dutch Civil Code is explained by the fact that the transition allowance in these cases is often low (short-term employment, low salaries), while the equitable compensation is relatively increased.

The average ratio is 3.9 times for gross negligence and 6.5 times for directors. The median is lower, at 2.2 times and 4.5 times, respectively, because a number of cases involving very low severance payments skew the average upward. The median provides the most realistic picture for the average case.

6. The age effect

For 605 of the 1,043 fair compensation awards granted, the employee’s age is known. The picture is clear: the older the employee, the higher the fair compensation. The median amount rises from €5,000 for employees aged 18 to 30 to €36,014 for employees aged 60 and older.

This confirms the findings of Horstman [2], who observed that judges tend to assess labor market prospects as less favorable for individuals aged 45 and older, and that fair compensation through retirement age is primarily awarded to employees aged 60 and older. Our data quantifies both effects on a large scale for the first time. The tipping point in the assessment of labor market position does indeed lie around age 45: for younger employees, the judge rules in approximately 70% of cases that the position is favorable, while for those aged 55 and older, this figure drops to less than 35%. The retirement age as a limit on damages plays a role for 25% of those aged 60 and older and is virtually nonexistent among those under 45. The difference in the amount between an employee aged 18–30 and one aged 60 and older is a factor of 7 for both the average and the median.

Please note: age is not a standalone factor. Older employees typically have longer tenures and higher salaries, and their position in the labor market also plays a role.

7. Continued

In Part 2 of this study, I examine which factors judges most frequently consider when determining fair compensation and what effect each factor has on the amount awarded. Which combination of circumstances leads to the highest compensation awards? And which defenses raised by the employer are most effective?