Dismissal Procedures and Protections

Dismissal Procedures and Protections

Employers in the Netherlands are only permitted to dismiss their employees if they have a valid reason for doing so, such as unavoidable economic circumstances or long-term illness or disability, and when a dismissal does occur, there are specific legal procedures the employer is required to follow. There are also laws in place in the Netherlands that protect employees from dismissal under certain circumstances. Whatever the conditions of your employment in the Netherlands, whether your employment contract is temporary (fixed-term) or permanent (indefinite-term), it is imperative that you have a clear understanding of Dutch dismissal law and procedures, to ensure that your legal rights are protected throughout the duration of your employment and after. For more information about Dutch labor and employment law, contact our experienced dismissal law attorneys today.

Grounds for Dismissal in the Netherlands

If you have a permanent employment contract in the Netherlands, your employer can only dismiss you on certain grounds. Under the former Dutch law, there were eight limited grounds, known as the “a-h” grounds, on which an employer could base a request for dismissal. These were:

• Redundancy due to economic circumstances,
• Long-term disability (more than two years),
• Frequent absence due to illness or disability,
• Damaged working relationship,
• Poor performance,
• Serious conscientious objections to work duties on the employee’s part,
• Improper conduct on the employee’s part, and
• Other reasons that make it so that the employer cannot be reasonably expected to continue the employment relationship.

However, a new law came into force on January 1, 2020 that affects Dutch dismissal procedures and protections, known as the Labor Market in Balance Act (Wet arbeidsmarkt in balans in Dutch, or WAB). The WAB added one new ground to the list of reasonable grounds for dismissal, known as the “cumulative” ground, or the “i” ground. This makes it possible for Dutch employers to request a dismissal from employment on a combination of grounds which, when combined, form a compelling case for dismissal.

Dutch Dismissal Procedures

There are certain legal procedures an employer in the Netherlands must follow in order to properly dismiss an employee. Under Dutch labor and employment laws, your employer is only permitted to dismiss you:

• If he or she obtains a dismissal permit from the Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen in Dutch, or UWV),
• If he or she goes to court to dissolve the employment contract,
• With your consent,
• During your trial period, or
• In the case of summary termination.

The specific reason for dismissal will determine what kind of permission your employer needs to dismiss you, if any. For instance, if the dismissal is for economic reasons or long-term illness, your employer will need permission from the UWV to dismiss you. If the working relationship is damaged, however, the employer will have to go to court to dissolve the employment contract. In the case of summary termination, the employer can terminate the employment contract with immediate effect, without permission from the UWV.

Dismissal of Temporary Employees

Temporary and permanent employees have different rights and legal protections in the Netherlands. When it comes to temporary employees, a fixed-term contract can be terminated either on the agreed upon end date or during a trial period. In either case, there is no dismissal procedure. However, if the employment contract is for six months or longer and the employer does not plan to renew the contract, he or she must notify the employee in writing at least one month before the contract’s end date. If the employer fails to comply with this notice requirement, the employee may be entitled to compensation according to the following:

• If the employer gives no notice, the amount of compensation the employee can recover is equal to one month’s gross salary.
• If the notice is given late, say by one week, for instance, the employee can recover compensation in the amount of one week’s gross salary.

Notice Period

Prior to terminating an employment contract in the Netherlands, notice should be given. Any time an employer terminates a permanent employment contract, the length of the notice period depends on the duration of the employment contract. For instance, if you worked with the employer for less than five years, the required notice period is one month. If you worked for between five and 10 years, the required notice period is two months. If you worked for between 10 and 15 years, the required notice period is three months. And if you worked for 15 years or longer, the required notice period is four months. If the employer and employee have agreed to a shorter or longer notice period, the specific terms of the notice period must be stated in the employment contract. There are some situations in which notice is not required. For instance:

• In cases of summary dismissal due to gross misconduct on the part of the employee,
• During the employee’s trial period, or
• When the employee resigns with immediate effect.

Collective Redundancy

Redundancies are a type of dismissal that occurs fairly often in the Netherlands. The term “redundancy” is used in employment law to describe a situation in which an employer reduces his or her workforce because a position is no longer required. A “collective” redundancy, or collective dismissal, occurs when a Dutch employer dismisses more than 20 employees for economic reasons within one geographical work area, within a three-month span of time.

Obligation to Inform and Consult

Before proceeding with a collective redundancy, Dutch employers are required by law to report their intentions to the UWV. They must also consult with the trade unions to discuss ways to avoid redundancies, keep the number of dismissals to a minimum, and limit the impact on the affected employees. After reporting their intention to the UWV and consulting the trade unions, employers must wait one month before terminating the affected employees’ employment agreements. If an employer fails to comply with the duty to report, the dismissals may be annulled.

Obligation to Look for Alternative Employment

It is also required by law that employers in the Netherlands who are considering a collective dismissal look for alternative positions within the company, or with the company’s subsidiaries, if applicable. Employers must determine whether there are suitable positions that are currently vacant or that will become vacant in the near future that the affected employees may be able to fill.

Protection Against Dismissal

There are certain specific situations in which an employee in the Netherlands is legally protected against dismissal. For instance, Dutch employment law prohibits employers from dismissing an employee who is pregnant or on maternity leave or an employee who is ill, unless the employee has been ill for more than two years. Employers are also prohibited from dismissing an employee for the following reasons, known as prohibition conditions (ontslagbescherming, ongeldige redenen voor ontslag, in Dutch):

• Because the employee joined a trade union,
• Because of the employee’s religious or political affiliation, or
• Because the company is being taken over.

If your employment contract has been terminated and you believe the dismissal is in violation of a prohibition condition, you have only two months after your dismissal to ask the court to nullify the dismissal or order the employer to pay proper compensation.

When is Transition Pay Required?

In many cases, when an employment relationship in the Netherlands is terminated, the employee is entitled to compensation in the form of transition pay. Transition pay is required any time a Dutch employer dismisses an employee on his or her own initiative or does not extend the fixed-term employment contract of an employee. Under the Labor Market in Balance Act, transition pay in the Netherlands is calculated based on one-third of the employee’s gross monthly salary for each full year of service, plus a pro-rated payment for each additional month or day of service short of a full year. If a Dutch employee resigns from his or her job because of seriously culpable conduct on the part of the employer, the employer may be required to pay transition compensation plus an additional fine. There are certain situations in which transition pay is not required, such as:

• If the employee has reached retirement age,
• If the company is facing bankruptcy,
• If the dismissal is due to the employee’s culpable behavior,
• If the employee is under the age of 18 and has only worked a maximum of 12 hours on average per week, or
• If the dismissal is for economic reasons and a different arrangement has been outlined in the collective labor agreement.

Contact Our Knowledgeable Dismissal Law Attorneys for Legal Help

Understanding the ins and outs of Dutch employment and dismissal law can be complicated and confusing, which is why we always recommend hiring an attorney when dealing with a dismissal from employment or any other key labor issue in the Netherlands. Our lawyers are skilled in all areas related to temporary and permanent employment contracts, termination of employment, collective redundancies and transition payments, and we can help you recover the compensation you deserve following a layoff or job loss.