Unemployment benefit deducted from fair compensation?

On 6 February 2026, the Supreme Court (in Dutch: ‘Hoge Raad’) ruled on a question that regularly arises; can potential unemployment benefits be taken into account when determining fair compensation? The Supreme Court ruled in favour of the employer, it is possible to take potential unemployment benefits into account when determining fair compensation and to deduct them from the lost wages.

Assessment framework: all circumstances of the case

This case concerned a situation in which the employment agreement was terminated due to serious culpable conduct on the part of the employer. In such cases, the employee may be awarded fair compensation. This compensation is intended to compensate the employee for the unlawful nature of the employer's conduct and is determined on the basis of all the circumstances of the case.<br><br>In its recent judgment, the Supreme Court considered that when the court takes into account the consequences of the premature termination of the employment contract in determining the fair compensation, it is obvious that it should not only consider disadvantages, such as the loss of wages, but also any advantages that are sufficiently related to this. These include, for example, the right to unemployment benefits or the possibility of earning other income.

Room for a case-by-case approach in practice

The extent to which these consequences affect the amount of fair compensation depends on the presence of other relevant circumstances. Among other things, consideration may be given to whether the employee is disadvantaged in terms of possible future rights to unemployment benefits. Ultimately, it comes down to an overall assessment of all circumstances, in light of what the parties have argued in this regard.<br><br>This ruling provides employers scope to argue that, if fair compensation is awarded, any unemployment benefits should be deducted from it. At the same time, the ruling emphasises that for employees, the argument remains valid that it is precisely the specific circumstances of the case that mean that unemployment benefits should not be deducted. Fair compensation remains a matter of individual assessment.