In 2016, employment law in the Netherlands has been changed significantly. Therefore, we point out the new rules in this summary.
How to dismiss an employee under Dutch employment law?
There are three main ways to end an employment contract as an employer:
The employment contract can end by mutual consent, for example by using a so-called termination agreement.
Apply for a dismissal permit with the Employee Insurance Agency (also known as the UWV) in order to terminate the employment contract by giving notice.
Ask the Court to terminate the employment contract by dissolution.
Termination agreement; ending the contract by mutual consent in the Netherlands
In this situation, the employer and the employee both choose an amicable solution to end the employment agreement. Parties can make different arrangements relating to a termination of employment such as the end date, a severance payment, a financial compensation for legal aid and other important conditions like a non-competition clause.
Dismissal due to 2 years of sickness or economic reasons (reorganization)
If the employer wishes to end the employment agreement by giving notice, then the employer has to ask permission from the UWV in case of two reasons: 1) sickness after two years or 2) economic, organizational or technical circumstances. The employer has to file for a written application with the UWV based on special Guidelines of the UWV. The application must comply with all the criteria of the UWV and the employee has the chance to respond to the application of the employer. Then the UWV will grant a permit or not (if not, the employer can consider a dissolution procedure with the Court). The dismissal procedure will take four to eight weeks in general.
If the employer obtains a dismissal permit, then he can dismiss the employee by giving notice with respect of the notice period. Nowadays the employer is allowed to deduct the time of the dismissal procedure for the notice period (with a minimum of one month).
It is prohibited for the employer to give notice of termination in certain situations. These situations are called dismissal obstacles. The Dutch law mentions a few dismissal obstacles for example: during illness or pregnancy, if the employee is a member of a works council, or the termination is on account of the transfer of undertakings employer.
It is also good to know the employee is entitled to a certain financial compensation if the employee loses his/her job involuntary. This is known as the transition fee.
Dissolution by the Courts for other reasons, f.e. non-performance
The employer can ask for dissolution of the employment contract in case of the following grounds:
the employee is frequently ill;
the employee is incapable to perform his duties to the satisfaction of the employer;
serious misconduct of the employee (violence or theft);
the working relation is irretrievable damaged;
the employee refuses to work because of religious or conscious reasons;
The employer has to send a written application to the Court with a comprehensive motivation. This means, the employer has to make sure there is a file.
The Court also has the obligation to consider the legal notice period. The Court will take into account the notice period in the decision, except when he judges that the employee has been acting culpably. The duration of the procedure will be deductible as well. But the Court have to check if there are no dismissal obstacles.
In this case, the employee is usually entitled to a transition fee.
Contact us for further information
Before taking any legal steps it is wise to consult our office in The Hague (The Netherlands) in relation to a termination of an employment contract. The different routes of termination can be complicated and mistakes are easily made or overlooked. If you have any questions, please contact us non-committal. We have a lot of experience working for foreign companies, originating from more than 20 different countries.
Contact us: firstname.lastname@example.org or call us: +31 6 14545793.