The law on dismissal (for employees)
This section contains information for private-sector or public-sector employees who have been dismissed or given notice of dismissal.
All sorts of questions are bound to arise if you hear that your employer is planning to terminate your contract of employment. These include:
- Can I be dismissed just like that?
- Am I entitled to severance pay?
- Am I entitled to unemployment benefit?
- What should I do?
- What should I not do?
These and other questions are answered below.
The rules are different for public-sector employees (civil servants)
You are classified as a public-sector employee (or civil servant) if you are employed under a contract of employment or a letter of appointment (aanstellingsakte), whether you work for the central government, a local authority or a government agency such as the UWV (Employee Insurance Agency) or the CBR (the Central Office for Motor Vehicle Driver Testing). Public-sector employees are subject to special rules, for example on outside activities and conflicts of interest.
Public Servants (Standardisation of Legal Status) Act (or WNRA)
A number of important changes were made on 1 January 2020 with the entry into force of a new act known as the Public Servants (Standardisation of Legal Status) Act (or WNRA). On 1 January 2020, the unilateral letters of appointment applying to most public-sector employees were automatically replaced by bilateral employment contracts. Public-sector employees are now subject to the rules on civil-law employment contracts, including the law on dismissal.
A small number of public-sector employees have retained their public-law employment status, however, and for this reason are exempt from the provisions of the WNRA. Click here to read whether this applies to you. These employees continue to be employed under the terms of a letter of appointment and remain subject, even after 1 January 2020, to the law of administrative procedure and to the rules on dismissal applying to public-sector employees employed under a letter of appointment.
The law on dismissal
Except in certain special cases, such as summary dismissal (i.e. on-the-spot dismissal) or dismissal during a trial period, an employer needs to obtain permission to terminate your contract of employment. The employer can choose from three options:
1. The employer can submit an application for dismissal to the Employee Insurance Agency (UWV) or can ask the court (kantonrechter) to terminate your contract of employment.
2. The employer can ask you to consent to the termination of your contract of employment by signing a ‘settlement agreement’.
3. The employer can ask you to consent to the termination of your contract of employment.
Whether your employer is obliged to submit an application for dismissal to the UWV or the court depends on the purported grounds for dismissal. In other words, the reason for your intended dismissal determines the procedure that is followed.
If your employer is applying for your dismissal on account of the organisation’s financial position or because of your long-term incapacity to work, they need to ask the UWV for permission to do so.
Where other grounds for dismissal apply, the employer will have to apply to the court for permission to terminate your contract of employment. These other grounds are as follows:
- frequent absence due to illness (which is not the same as a prolonged absence due to illness);
- poor performance;
- culpable conduct on the employee’s part;
- the employee’s refusal to perform a particular job on conscientious grounds;
- an impaired working relationship;
- other grounds. Note that this is not simply a residual category. The reason given for the employee’s dismissal must be clearly unrelated to any of the foregoing grounds for dismissal. Imprisonment or the absence of the requisite work permit (subject to certain conditions) are two examples of ‘other grounds’;
- a combination of two or more of the grounds referred to above, such that the employer cannot reasonably be expected to allow the contract of employment to continue. This is sometimes referred to as the ‘cumulative ground’. A combination of poor performance and an impaired working relationship is an example of a cumulative ground for dismissal.
Employees wishing to terminate their contract of employment themselves other than by giving notice of termination are free to ask the court for permission to do so. In order for the court to give its permission, the circumstances must be such that it is reasonable for the contract to be terminated either immediately or at short notice.
Submitting an application for dismissal to the UWV
Your employer can ask the UWV in writing for permission to terminate either your own employment contract or the contracts of a number of staff, either on account of the organisation’s financial position or on the grounds of your or their long-term incapacity to work. Once it has received all the necessary information from your employer, the UWV will send you a copy of the application for dismissal and will invite you to respond. You must submit your defence in writing to the UWV. Although you can do this yourself, we would recommend that you seek legal advice.
Depending on your defence, the UWV will then decide:
- whether a decision can be taken on the application for dismissal;
- whether you and your employer should be given another opportunity to respond to each other's standpoints.
The UWV will eventually decide whether or not to grant the dismissal permit requested by your employer. Only once this permit has been granted may your employer terminate your employment contract. Although the employer is still required to give the relevant period of notice, they are entitled to deduct the duration of the application procedure at the UWV from this period, provided that at least one month remains.
If the UWV rejects the application for dismissal, your employer is free to submit a further application to the court. Should the court rule against the employer, they are entitled to appeal (in the first instance to the Court of Appeal and in the second instance to the Supreme Court) against the ruling.
If UWV the grants the application for dismissal and your employer then terminates your contract of employment, you are entitled to ask the court to order the employer to reinstate the contract. You are also free to apply to the court for an additional (reasonable) payment if your employer is deemed to have committed a ‘grievous culpable act or omission’.
Applying to the court to terminate an employment contract
The court procedure starts with the submission of a written application for dismissal, known in Dutch as an ontbindingsverzoekschrift. After receiving this request, the court will set a date for a hearing, at which you and your employer will be invited to appear. You will be invited to submit a written response (the ‘defence’) to the court before the date of the hearing, in principle by no later than 10 days before the date of the hearing. Although you can do this yourself, we would advise you to seek legal advice.
During the hearing, you and your employer will be invited to explain your positions and to respond to each other's standpoints. Should it not prove possible to reach an amicable settlement during the hearing, the court will in principle take a decision within four weeks.
If the court decides to terminate the employment contract, it will set a date for this. The basic principle here is that the relevant term of notice is taken into account, starting from the date of the court ruling. However, the duration of the court proceedings is deducted from the term of notice, on condition that at least one month remains. If the court decides that your contract should be terminated, your employer no longer needs to give you notice of dismissal.
The court may also (but is not obliged to) state whether or not you are entitled to severance pay and if so, how much.
Because the right to a ‘transition payment’ (transitievergoeding) is enshrined in the law, the court is not obliged to award such a payment. At the same time, the court may rule, at the employer’s request, that you should not receive a transition payment if it takes the view that you have committed a ‘grievous culpable act’.
The court may rule, at your request, that your employer is also bound to pay you a reasonable additional sum if it believes that the termination of your contract of employment is due to your employer having committed a ‘grievous culpable act or omission’. The court is responsible for fixing the size of this additional, reasonable payment.
If you are employed under a fixed-term contract of employment that does not provide for the possibility of termination prior to its expiry, the court may also award a payment no larger than the amount of pay that is due for the remainder of the contract.
If the court denies the request for termination, your employment contract remains in force.
Either party is entitled to appeal (in the first instance to the Court of Appeal and in the second instance to the Supreme Court) against a court ruling.
Your employer is at all times liable to pay you a transition payment, irrespective of the application procedure that is followed.
All staff whose employment is terminated against their wishes are entitled to a transition payment, unless the termination or non-continuation of the contract is due to a ‘grievous culpable act’ on their part. This means that, even if you have been employed for no more than a month or even just a week, you are still entitled to a transition payment if it is the employer who has taken the initiative to terminate the employment contract.
Because the right to a transition payment is enshrined in the law, the court is not obliged to award such a payment. At the same time, the court may rule, at the employer’s request, that you should not receive a transition payment if it takes the view that you have committed a ‘grievous culpable act’.
If your employer fails to pay the transition payment, you are entitled to start proceedings against your employer within three months of the end of the contract of employment.
The value of the transition payment is one-third of the monthly salary for each year of service, with the amount payable in respect of part of a year of service being calculated on a pro rata basis. The maximum gross value of the transition payment is either €81,000 or a year’s salary, whichever is higher.
If you have been employed under successive terms of employment, your years of service with previous employers are also taken into account.
The temporary scheme applying to employees aged 50 and above has been discontinued with effect from 1 January 2020. Under this arrangement, employees aged 50 and above who had been employed for more than 10 years were entitled to a higher transition payment. In the new situation applying since 1 January 2020, however, the transition payment is calculated in the same way for all staff and the law no longer makes any exceptions.
Subject to certain conditions, your employer is entitled to deduct certain costs incurred during the course of your employment from the transition payment. These must be costs incurred to prevent you from becoming unemployed (such as an outplacement service) or to enhance your employability. The deduction of such costs is subject to strict conditions, one of which is that the employee involved must give his or her written consent. This latter point does not apply, however, if an arrangement for the deduction of costs has been made in the relevant collective agreement.
You and your employer may reach a mutual agreement about the termination of your employment contract. This requires both parties to sign a document known as a ‘settlement agreement’ (beëindigingsovereenkomst). If you agree to a proposal to terminate your employment by signing a settlement agreement, this does not affect your entitlement to unemployment benefit (WW). However, the arrangement must meet a number of conditions.
A settlement agreement must state, for example:
- the date on which the employment contract is to be terminated;
- the ground for termination;
- that it is the employer on whose initiative the employment contract is to be terminated.
If you receive a settlement agreement from your employer, you are advised to have it reviewed by a legal expert. Our lawyers will be pleased to do this for you, for an affordable fee.
The law gives employees a 14-day ‘cooling-off period’. In other words, you are entitled to terminate a settlement agreement you have already signed within a period of 14 days of the date on which you signed it. If the settlement agreement does not mention this cooling-off period, the period is automatically extended to three weeks. Your right to a period of time to think the matter over cannot be excluded or limited.
If you (i.e. the employee) give your consent to the termination of your contract of employment, your employer is not obliged to take the matter to the UWV or the court. If you do give your consent, you have a period of 14 days in which to retract. If you do subsequently withdraw your consent, you then remain in your employer’s service. Your employer is not obliged to ask for your consent.
If an employee gives their consent to the termination of their contract of employment by the employer, this does not constitute a case of ‘voluntary’ or ‘culpable’ unemployment as it is assumed that it is the employer who has taken the initiative to terminate the contract of employment. Here too, the employee retains the right to unemployment benefit (WW), provided that the contract has not been terminated on urgent grounds.
What should you and shouldn’t you do?
Hearing that your employer is planning to terminate your employment is often an emotional moment that may well come out of the blue. Not surprisingly, many people find it hard to absorb all the information they receive in this first stage of the process. So always ask for written confirmation.
On no account should you immediately accept your dismissal. Instead, you should ask for a reasonable period of time in which to think about the situation and take legal advice.
The fact that you have been given notice of dismissal does not in itself mean that your contract of employment has already been terminated. In other words, you should continue to work even after you have been given notice, unless your employer exempts you from this obligation or suspends you on full pay. If there is any uncertainty about this, be sure to write to your employer, stating that you are willing to return to work as soon as they ask you to do so.
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