The bill ensures that only small employers, under certain conditions, are compensated for the paid transition allowance in case of dismissal due to long-term incapacity for work. Whether an employer is large, medium, or small is determined anew each calendar year.
Limiting the compensation for a transition allowance after dismissal due to long-term incapacity for work to small employers is a financial agreement made at the start of the cabinet. This will structurally save 380 million euros.
Employees who are dismissed or whose contract is not renewed are entitled to a transition allowance. The transition allowance is intended as compensation for dismissal and to facilitate the switch to another job. The amount of the transition allowance depends on the monthly salary and the duration of employment.
The bill is being considered in the House of Representatives and the Senate. If they agree, the aim is to have the bill come into effect on July 1, 2026.
