Thirteenth month salary under Dutch law
A thirteenth month salary (dertiende maand) is an additional month's pay that some employees in the Netherlands receive, usually at the end of the calendar year. Unlike the holiday allowance, the thirteenth month is not a statutory right under Dutch law. Whether an employee is entitled to it depends on the employment contract, the applicable collective labour agreement (CAO), or an established company practice.
Many Dutch employers in sectors such as banking, insurance, government, and professional services include a thirteenth month in their compensation packages. Where a CAO applies, the obligation to pay a thirteenth month is binding on all employers covered by that agreement. Even where no written obligation exists, an employer who has paid a thirteenth month consistently over several years may be bound by an implied term (verworven recht) under Dutch case law. thirteenth-month payments as gratuities (gratificaties) within the meaning of Article 7:618 of the Dutch Civil Code: where payment is obligatory they constitute remuneration, but where the employer retains discretion they do not. The Hoge Raad has held that spontaneous payment over a number of years creates a protected expectation - abrupt discontinuation requires a compelling reason; at most the employer may phase out such payments gradually or buy them off.
Calculation and pro rata entitlement under Dutch law
The thirteenth month typically equals one month of the employee's base gross salary. If the employee did not work the entire calendar year - for instance, because they started mid-year or the contract was terminated - they are generally entitled to a proportional (pro rata) share, unless the contract or CAO provides otherwise.
Employers should be aware that the thirteenth month forms part of the employee's salary for the purpose of calculating transition payments, pension contributions, and social security premiums. Failing to account for it in dismissal proceedings can lead to a higher settlement amount. In employer insolvency, a pro-rata thirteenth month falls within the broad concept of "pay" recoverable from the General Unemployment Fund (Algemeen Werkloosheidsfonds) under Articles 61-68 of the Unemployment Benefits Act, covering up to 13 weeks of pay preceding termination.
Can the employer discontinue the thirteenth month under Dutch law?
If the thirteenth month is laid down in a CAO or employment contract, the employer cannot unilaterally abolish it. If it has become an established practice (verworven recht), the employer may only change it with the employee's consent or through a unilateral change clause combined with a pressing business interest. The works council may also have a right of consent under the Works Councils Act (Wet op de ondernemingsraden).