Employment termination law concerns the rules regarding the end of the employment agreement. The agreement between the employer and employee can end in a range of ways. It is possible that the employment agreement was entered into for a definite period of time (temporary contract). These contracts usually end by law. An employment agreement entered into indefinitely (permanent contract) does not end by law, and thus requires further action. Sometimes further action is required for temporary contracts, too. For example, if this has been agreed upon, or if a party wishes to end the agreement early. Employment termination law regulates how this should be handled.
As indicated below, there are various ways to end the employment agreement. Whether it concerns a termination agreement or immediate termination, JPR's employment lawyers are glad to be of assistance. They have extensive experience with dismissals and will be able to provide excellent advice.
Are you looking for a lawyer that specialises in the field of employment termination law? Please contact JPR. We are glad to be of assistance.
An employer cannot simply end the employment agreement. With a few exceptions, this requires prior permission, which will only be granted if there are reasonable grounds for dismissal. Article 7:669 determines the grounds for an employer that are flagged as reasonable. To obtain permission for a dismissal, it must be certain that reassignment is not possible. If it is possible to train an employee in a short period of time to allow for reassignment, then this must take place (first). However, reassignment will not be a requirement for misconduct or a damaged working relationship.
Procedures for redundancy
In practice, there are two procedures for redundancy, or dismissal. Dismissal via the subdistrict court, or dismissal via the UWV. Since the introduction of the Work and Security Act, the procedure that needs to be followed is fixed.
In case of a dismissal for economic reasons, or a dismissal after long-term sickness, the employer must contact the UWV with a request for permission. Since the introduction of the Work and Security Act, there is a digital procedure that uses forms that must be submitted via an employer portal. Naturally, the reasons for dismissal will need to be substantiated. The UWV's goal is to make a decision within four weeks.
The dismissal due to long-term sickness will concern a single employee, but dismissal for economic reasons usually concerns several employees. This is called collective dismissal. For more information about dismissing several employees, see the heading 'collective dismissal'.
The procedure for redundancy via the UWV will lead to a situation in which the employer will need to end the employment agreement themselves with the acquired permission. You can read more about this below under 'ending the employment agreement’.
In the other cases, the subdistrict court is authorised to make a ruling on the employer's dismissal request. Think of, for instance, an employee's inadequate performance, but also misconduct, a damaged working relationship, a frequently sick employee, or an employee in detention. Dismissal via the subdistrict court is indicated as a termination. For more information about ending the employment agreement, see the heading 'ending the employment agreement'.
For both dismissal by the employer, the employer not extending the employment agreement, and termination, the employee has a right to transition payment. This is a statutory right. You can read more under the heading 'Severance pay'.
In some cases, the employer and employee agree on the dismissal. In such a case, the UWV or the subdistrict court do not need to approve the dismissal. The legislators have created two possibilities for this situation.
Firstly, there is the option to enter into a so-called termination agreement. This is also called a dismissal with mutual consent. The employer and employee negotiate the terms of the end of the employment agreement. In case of a termination agreement, de transition payment does not apply; it is up to the parties to negotiate all conditions. After entering into a termination agreement, the employee has a fourteen-day, or three week grace period. You can read more about the rules regarding dismissal with mutual consent under the heading 'termination agreement'.
Dismissal with assent
Secondly, the law contains the option for dismissal with the employee's assent. In theory, the employer can suggest to the employee to end the employment agreement. The employee can then agree in writing with this termination. For this situation, there is a transition payment. In practice, such a proposal from the employer will probably lead to negotiations and still end in a termination agreement, which means this possibility will see little use. Dismissal with assent also have a fourteen day, or three week reflection period.
Old age pension
The law includes the option of dismissal due to reaching pensionable age. Upon or after the day the pensionable age is reached, the employment agreement can be ended. If other written agreements have been made, then this does not apply. If the employment agreement is ended due to reaching pensionable age, then the transition payment is not owed.
In case of the death of the employee, the employment agreement ends by law. As such, it is not a dismissal situation. The employment agreement does not end due to the death of the employer, unless other agreements have been made in this respect in the employment agreement.
A special situation is created by the immediate termination. Both the employer as employee are authorised to immediately and without prior permission terminate the employment agreement if there is an urgent cause. The law determines what can be urgent causes for both the employer and the employee. On the part of the employer, this could include theft. On the part of the employee, this could include intimidation by the employer.
Immediate termination is a heavy tool and should not be used lightly. The dismissal must meet a range of formal requirements. A court that must assess immediate termination will do so taking into account all circumstances. The employee's personal circumstances are included in this assessment. As a result, immediate termination is not as certain as the name makes it sounds. We strongly urge you to get legal assistance in time for this reason.
In the Netherlands, an employer cannot simply dismiss an employee. To do so, the employer requires the permission of the UWV or the subdistrict court. There are some exceptions, however. For example, immediate termination or dismissal during the trial period require no permission. A contract for a definite period ends by law without requiring the permission of a third party.
By law, dismissal requires reasonable grounds. The law determines the reasonable grounds for dismissal. In order to acquire permission for dismissal, it must be certain that reassignment is not possible. The law also determines the procedure for the dismissal. For example, the UWV is authorised for economic dismissals, but the subdistrict court has authority for unsatisfactory performance.
If you are confronted with dismissal and would like advice, then do not hesitate to contact us.
Dismissal must be the last resort. Not after all options for job retention have been exhausted by the employer and the employee, should dismissal be an option. In practice, this means that the steps taken to prevent dismissal must be properly recorded. Only a thorough file will grant you permission for dismissal by the UWV or the subdistrict court. A good file structure is thus important. Naturally, we can provide guidance and/or advice, in particular due to our practical experience with the manner in which courts handle the requirements set for dismissal, even after the introduction of the Work and Security Act.
In case of an intended collective dismissal, the employer will have to comply with the additional regulations. For instance, there will be an assessment to see if it concerns a collective dismissal in the sense of the Collective Redundancy (Notification) Act. If this is the case, then the employer will need to meet with the union and Works Council.
For an intended collective dismissal, employee participation will also need to be taken into account. Participation involves employees in the organisation's decision-making process, including the intended dismissal of part of the workforce. You can find more information under the headings 'employee participation' and 'Works Councils Act'.
Dismissal is a collective name for various methods of ending the employment agreement. The heading 'employment termination law' discusses more about the mentioned topics. Based on legal precedence and legislation, we can provide advice for the dismissal of personnel. We recommend contacting us at an early stage to ensure you are on the righ path. Naturally, we will be glad to contact you, if you so desire. Moreover, you can subscribe to our (free) newsletter to stay up-to-date on the developments in the field of employment law in general and dismissals in particular.