Dismissal law

There are essentially six ways in which the employment agreement can come to an end:

  • Resignation by the employee;
  • Expiry of a fixed-term employment agreement;
  • With mutual consent;
  • Dismissal through notice given by the employer:
  • With permission of the Employee Insurance Agency (UWV);
  • During the probation period;
  • Instantly because of an urgent cause;
  • Dissolution of the employment agreement by the sub-district court;
  • Death of the employee.

 

Limited Grounds for Termination

Pursuant to Dutch law, dismissal is only allowed if (i) there is a reasonable ground for dismissal, and (ii) it is not possible or reasonable to reassign the employee to a suitable alternative position, either with the help of training or education.

These reasonable grounds entail:

  • Business economic reasons;
  • Long-term incapacity to work (>24 months);
  • Repeated absenteeism due to illness;
  • Underperformance;
  • Imputable acts by the employee;
  • Refusal of work due to conscientious objections;
  • Damaged working relationship; or
  • Other circumstances that create a situation in which the continuation of the employment agreement cannot be demanded.

 

Mandatoy Dismissal Routes
An employment agreement cannot be unilaterally terminated by the employer without a preventive test of the dismissal, except during the probation period or due to an urgent cause.

Dutch law dictates a mandatory route per ground of dismissal. Dismissals due to economic reasons or long-term incapacity to work – the so-called A and B grounds – require permission from the Employee Insurance Agency (UWV).

For dismissals on grounds C to H, the employer must bring proceedings before the sub-district court in order to have the employment agreement dissolved.

 

Termination by mutual consent

Employers will often try to negotiate a settlement agreement in order to prevent proceedings with the UWV or the court.

The termination should be confirmed in writing in a settlement agreement between parties which, in principle, ensures the employee’s entitlement to unemployment benefits as much as possible. The employee must be given 2 weeks to consider the settlement, during which period he may unilaterally dissolve the settlement agreement.

 

Instant dismissal because of an ugent cause

Pursuant to Dutch law, the employment agreement may be terminated with immediate effect and without any preventive test because of an urgent cause, such as fraud, theft or other very serious misconduct. The law provides for a non-exhaustive list of acts that are considered to be an urgent cause. The termination should be enacted as soon as possible after the employer becomes aware of the urgent cause, and the employee must be notified as soon as possible about the dismissal as well as the reason(s) for the dismissal. The employee may dispute the dismissal before the sub-district court within 2 months.

 

Appeal

The Civil Law Code allows the possibility for appeal and appeal in cassation for both dismissal routes.

 

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