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The law on dismissal (for private-sector employees)

This section contains information for private-sector or public-sector employees who have been dismissed or given notice of dismissal. If you would like legal advice on your specific case, please call 0800-6687524 (toll-free in the Netherlands). We are available to assist you on workdays, from eight in the morning to eight at night!

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 civil servant if you are employed under a letter or instrument of appointment (aanstellingsakte), unlike private-sector employees, who work under a contract of employment. Public service law applies to government officials, local authority officials and military personnel, among others. All those in public service are employed under a letter of appointment and are therefore subject to public service law. This may also apply if you work for a university teaching hospital or for a school or institute of higher education.

If you are a public-sector employee and have been given notice of dismissal, you can find more information here about the law on dismissal and how you can fight your dismissal. 

Law on dismissal

Except in certain special cases, such as summary 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 to terminate the 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 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 a long-term incapacity to work, he or she needs to ask 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 a prolonged absence due to illness);
  • poor performance;
  • culpable conduct on the employee’s part;
  • the employee’s refusal for conscientious reasons to perform a particular job;
  • an impaired working relationship;
  • other grounds. Please note that this is not simply a residual category. The reason given for the employee’s dismissal must clearly not be related 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’.

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 UWV

Your employer can ask 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 because of a long-term incapacity to work. Once it has received all the necessary information from your employer, 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 UWV. Although you can do this yourself, we would recommend that you seek legal advice.

Depending on your defence, 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.

UWV will eventually decide whether or not to grant the dismissal permit requested by the 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, he or she is entitled to deduct the duration of the application procedure at UWV from this period, provided that at least one month remains. 

There are certain circumstances, for example a period of illness or if you are a member of the works council, in which the employer is not allowed to terminate your contract of employment, irrespective of whether or not UWV has given him or her permission to do so.

If 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, he or she is 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 grants the application for dismissal and the contract of employment is then terminated, you (i.e. the employee) 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 the 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 the assistance of a lawyer. 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 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 are 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’ 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 takes the view 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 amount 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, the 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.

Transition payment

Your employer is at all times liable to pay you a transition payment (transitievergoeding), irrespective of the application procedure that is followed.

All staff employed for at least two years (irrespective of whether they are employed under a permanent or temporary contract of employment) and 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 own part. This means that, even in a situation in which your contract ends automatically after exactly two years, you are in theory still entitled to a transition payment.

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 should start proceedings against your former employer within three months of the end of your contract of employment. The size of the transition payment is calculated as follows: 

  • one third of your monthly salary for each of your first 10 years of employment;
  • half your monthly salary for each year of employment thereafter;

subject to a maximum gross payment of either €75,000 or a year’s salary, whichever is higher.

If you have been employed under successive terms of employment, your years of service with the preceding employers are also taken into account.

Exception in relation to employees aged 50 and above

As far as the size of the transition payment is concerned, the law makes a temporary exception (i.e. until 1 January 2020) in relation to employees aged 50 and above at the time when their contract of employment ends. Until 2020, an employee who is aged at least 50 on the date of his or her dismissal and who has been in the employer’s service for more than 10 years is entitled to an extra month’s salary for each year spent in the employer’s service as from the age of 50. This measure was adopted in response to the relatively unfavourable position of this category of staff on the job market, and will remain in force until 2020. It does not apply to organisations with an average workforce of less than 25 staff.

The employer is not compelled to pay a statutory transition payment if the relevant collective agreement contains what is termed a ‘comparable provision’, i.e. some form of financial compensation or compensation in kind such as an outplacement service, exemption from certain duties or training facilities. 

Subject to certain conditions, the employer is entitled to deduct certain costs incurred during the course of the employee’s employment from the transition payment. These must be costs incurred to prevent the employee from becoming unemployed (such as an outplacement service) or to enhance the employee’s 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.

Settlement 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 need 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 was the employer who decided to terminate the employment contract.

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, at an affordable fee.

The law gives employees a 14-day cooling-off period. In other words, you are entitled to terminate (‘set aside’) a settlement agreement that 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, it is automatically extended to three weeks. The employee’s right to a period of time to think the matter over cannot be excluded or limited. 

Consent

If you (the employee) give your consent to the termination of your contract of employment, your employer is not obliged to take the matter to UWV or the court. If you do give your consent to the termination, you have a period of 14 days in which to retract. If you do subsequently withdraw your consent, you then remain in the employer’s service. Your employer is not obliged to ask for your consent.

If an employee gives his or her consent to the termination of his or her contract of employment by the employer, this does not constitute a form of ‘voluntary unemployment’ as it is assumed that the employer 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 to do and what not to do

Being told that your employer is planning to terminate your employment is often an emotional event, and generally comes out of the blue. As a result, many people find it hard to absorb all the information given during this initial meeting. 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 he or she wishes you to do so.

What can we do for you?

You can ask one of our lawyers to take a look at your situation by calling us on 0800-6687524 (toll-free in the Netherlands). During the first meeting, which is free of charge, we will tell you what you could or ought to do, and will also inform you about any following steps that need to be taken.

© 2019 RWV