All sorts of questions are bound to arise if your employer is planning to terminate your contract of employment. Can I be dismissed just like that? Am I entitled to severance pay? Am I entitled to unemployment benefit? What should I do?

Law on dismissal

No, your employer can not end your contract just like that according to Dutch employment law. Of course however, the first question to be answered is which law is applicable.

The question of the applicable law is to be determined on the basis of private international law. Dutch dismissal law might be applicable, even if foreign law has been declared applicable. A Dutch court will always check if a choice of law does not result in depriving the employee of the protection of the law of the country which would have been applicable in the absence of a choice.

According to Dutch employment law, apart from dismissal during a trial period or instant dismissal based on an urgent cause, your employer needs to have a reasonable ground for your dismissal. And if he does he will either need permission of the Employee Insurance Agency (UWV) or of the court to end your contract.

Reasonable grounds for dismissal

The Dutch Civil Code holds several reasonable grounds for dismissal. These grounds are as follows:

  1. deteriorated economic conditions/reorganization;
  2. long-term (over 2 years) incapacity to work;
  3. frequent absence due to illness (which is not the same as long-term illness);
  4. poor performance;
  5. culpable conduct on the employee’s part;
  6. the employee’s refusal for conscientious reasons to perform a particular job;
  7. an impaired working relationship;
  8. other grounds not related to any of the foregoing grounds (imprisonment for instance)
  9. and since January 2020 also: “a combination of circumstances referred to in two or more of the grounds in sections c to e, g and h, such that the employer cannot reasonably be required to continue the employment contract.”

Ground for dismissal determines dismissal procedure

The ground for dismissal determines the dismissal route to be followed by your employer (UWV or court).

If your employer wants to terminate your contract due to business conditions/reorganization (ground a), or because of your long-term (over 2 years) incapacity to work (ground b), he will need to ask the UWV for permission to give notice.

Where other grounds for dismissal – grounds c to i - apply, your employer will have to ask the court to dissolve your contract of employment.

Severance pay: transition payment, fair compensation and/or additional payment

In case your employer ends your contract you are in principle entitled to the statutory transition payment (transitievergoeding). The statutory transition payment equals 1/3 of a monthly salary including holiday allowance and fixed wage components for each fully worked year, and pro rata part for a part thereof. The only exception to this entitlement is the situation in which there is serious culpable behavior on your part as an employee.

If, on the other hand, the termination of your employment contract is the result of seriously culpable acts or omissions on the part of your employer, then you as an employee are entitled to fair compensation.

And finally, the court may grant you an additional severance payment up to half of the transition payment, in case the court dissolves your employment contract based on ground i (the combination ground) as described above.

Termination of the employment contract by mutual consent

Because the court and the UWV demand a solid dismissal file, in practice employers often try to end the employment contract by mutual consent. The end of your employment will then be documented in a termination agreement. Of course in negotiating the terms of such an agreement it is important to know what the alternatives are for your employer. In other words: does he have a reasonable ground for dismissal and which level of compensation is appropriate?

Changes upon changes

In the last couple of years the Dutch dismissal law has changed rapidly. This also goes for other parts of Dutch labor law. Examples of other changes: the period after which successive temporary employment contracts (a maximum of 3) change into a contract for an indefinite period of time, is extended from 2 to 3 years. Also the rules for on-call workers (oproepkrachten) have changed dramatically.

Should you have any questions about the complex Dutch employment and dismissal law, please feel free to contact me and I will be pleased to help you.