If there is an urgent reason, the employer may immediately terminate the employment contract and no notice period has to be observed. The procedure for firing someone without notice has to be interpreted by the letter and is a delicate operation. If mistakes are made during this phase, it can cost the employer a lot of money later on, such as wages in arrears, statutory increases and perhaps a high fair compensation. The cancellation including its reason must take place immediately. The obligation to furnish facts and the burden of proof are on the employer. The situation and the reason for the instant dismissal must be so unsustainable that it cannot be expected of the employer to continue the employment contract any longer.
What could entail an urgent reason to lay off an employee without notice?
There will not be a dismissal without notice if an urgent reason misses. Urgent reasons for an employer are such actions, properties or behavior of the employee that as a result it cannot be reasonably be required of the employer to continue the employment contract. The most obvious reasons are among others: theft, fraud, cheating, sexual harassment, drunkenness, insulting the employer or colleagues, destruction. This could also include refusal to comply with reasonable orders (one can think of the definition of reasonable) and the absence due to illness (in which illness is disputed by the employer) or unauthorized absence. The case law is very casuistic in nature.
The employee however, can also resign without notice. This is clearly less common. If only because the employee with such a resignation loses his right to unemployment benefit and will not immediately have a new job.
What is a transition fee?
The law provides for three types of termination benefits: the transition fee, the fair compensation and the compensation for premature termination of the employment contract. An employee whose employment contract has terminated by the employer is entitled to a transition fee by operation of law. This compensation is firstly intended as compensation for the (consequences of) the dismissal and secondly to provide the employee with financial resources to facilitate a transition to another job. This compensation is due both if the employment contract is terminated by the employer and if its dissolved at the request of the employer. This compensation is also payable if the employer decides not to extend a fixed-term contract.
The amount of the transition fee over the first ten years of the employment contract is equal to one sixth of the monthly salary for each 6-month period that the employment contract lasted and equal to one quarter of the monthly salary over each subsequent 6-month period. Thus: a third monthly salary per year of service for the first 10 years and half a monthly salary for those after that.
What is a fair compensation for the dismissed employee?
In certain cases, the judge grants a fair compensation to the employee in addition to the transition fee. Granting such additional compensation to the employee requires that the employer is guilty of seriously culpable conduct. This only appears in exceptional cases. Situations where a fair compensation needs to be provided, are: if the employer has discriminated the employee or made the employee incapacitated for work or if he has disrupted the working relationship due to the his behavior.
The amount of the fair compensation and how it should be calculated is not provided by the Dutch law. The legislator leaves that to the court. In the recent years case law has been developed in order to determine which facts and circumstances can be of relevance to decide if an employee has the right to obtain a certain compensation.