Under Dutch law, an employment contract can be terminated in various ways, depending on the reason for termination.
If the employer wishes to terminate the employment agreement on the basis of a reasonable ground for dismissal, such as underperformance, culpable action or failure to act, or a disrupted working relationship, he may apply to the subdistrict court. The subdistrict court can only grant a request for termination if the legal conditions have been met. The subdistrict court is bound by the grounds for dismissal, the termination- and the discrimination prohibitions.
If the employer wishes to terminate the employment agreement on the grounds of dismissal on economic grounds and long-term disability, he should apply for dismissal to the UWV (Employee Insurance Agency). The UWV assesses the substantiation and reason for dismissal and the efforts to redeploy the employee.
The employee has the right to defend himself against the dismissal in both the subdistrict court and the UWV proceedings.
Employer and employee can jointly agree to end the employment contract, so-called "termination by mutual consent". The parties then lay down the terms of termination in a termination agreement. These include the severance payment, the (fictitious) notice period, the end date, any costs for legal assistance and, for example, continuation or expiry of the non-competition clause. If the reason for termination is correctly described, the employee also retains entitlement to unemployment benefit.
The employer may only terminate the employment contract if the reasonable grounds for dismissal are sufficiently substantiated and it is not possible to reinstate the employee in another suitable position within a reasonable period of time, even with the help of training. The employer must make an active effort to redeploy the employee before dismissal.
An employee whose employment is terminated at the employer's initiative is entitled to transition payment (“transitievergoeding”). This right arises on day 1 of the employment contract so that even temporary employees are entitled to this at the end of their employment. The amount of this severance payment depends on the salary and the duration of the employment. The calculation method for the transition payment can be found : .
A transition payment is not payable if:
The transition payment can, under special circumstances, be supplemented by an additional payment (“billijke vergoeding”). In calculating the transition payment, the employer's culpable behavior is not taken into account. Therefore, the legislator has offered the possibility of an additional payment in case of serious culpable acts or omissions by the employer. This includes, for example, discrimination, giving a false ground for dismissal, violating reintegration regulations, etc. The amount is determined by the court.
It could happen that the employer wants to terminate the employment because of an urgent reason. For example, the employee has stolen, committed fraud or refuses to work without good reason. In such cases, the employer may proceed directly with dismissal. The employer must immediately inform the employee and communicate the reason for the dismissal to the employee. The employee must also have been heard. The employee must have been given the opportunity to tell his or her side of the story. The requirements for a valid urgent dismissal are strict under Dutch law, so it is wise to seek legal advice at an early stage.
If you have any questions about dismissal or related matters, please contact our employment law attorneys here.