What can an employee do in case of termination of employment in the Netherlands?
If you have been terminated from your employment under Dutch law, and wish to challenge your dismissal in the Netherlands, there are two separate paths available.
Firstly, for dismissal due to economic reasons or long-term disability, the process is managed by the government agency UWV WERK (UWV).
Secondly, in cases where the dismissal has been given for personal reasons, such as a workplace conflict or inadequate performance of the employee, the employer must request the dissolution (termination) of the employment agreement from the district court, which is a local court dealing with civil and criminal cases.
Appeal against a court decision regarding termination of employment in the Netherlands
In the Netherlands, you can appeal a district court’s decision, meaning you can ask a higher court to review and potentially overturn the decision. If necessary, you can also file an appeal with the Supreme Court, which is the highest court in the Netherlands and has the authority to review and overturn decisions made by lower courts.
Summary dismissal in the Netherlands
Summary dismissal, a type of dismissal where an employee is terminated without notice or warning, is rare in the Netherlands.
This type of termination of employment in the Netherlands can only occur for compelling reasons, such as serious misconduct. This type of dismissal carries severe consequences for the employee, including loss of employment benefits and other compensations, referred to as “WW” benefits, which are unemployment benefits provided by the Dutch government. Strict conditions must be met for summary dismissal: there must be clear evidence of compelling reasons, the dismissal must be given “immediately” (without delay), and the employee must be informed in writing of the reasons at the time of dismissal.
An employee can challenge their summary dismissal by filing an appeal with the district court within two months, seeking to void (cancel) the dismissal.
Resignation with immediate effect by the employee
In the Netherlands, an employee can also resign with immediate effect, meaning they leave their job without providing notice. The same strict conditions that apply to employers in the case of summary dismissal also apply to the employee if they resign with immediate effect.
Termination of employment in the Netherlands by mutual consent – settlement agreement
Alternatively, both employer and employee can agree to terminate the employment agreement by mutual consent, which is done through a settlement or termination agreement.
This settlement contract outlines the end date of employment, any compensation amount, the conclusion of non-compete and/or non-solicitation clauses (which restrict the employee from working for a competitor or soliciting clients from the former employer), and the return of company property.
By reaching a neutral agreement and considering the (fictitious) cancellation period (a period used to calculate unemployment benefits), the employee’s “WW” benefits can be protected.
Severance payment under Dutch employment law
Severance payment, also known as a “golden handshake,” is the compensation an employee receives upon dismissal.
Since 1 July 2015, there are two legally recognized types of severance payments in the Netherlands: transition compensation and supplemental reasonable compensation.
Transition compensation in Netherlands employment law
Transition compensation is granted to employees with more than two years of service at the time of resignation. You can calculate the applicable amount using a calculation tool designed to help you determine the amount based on your specific situation. Employers and employees can also agree on the severance payment amount and include it in a termination agreement.
Supplemental reasonable compensation under Dutch law
Supplemental reasonable compensation is awarded when the employer is significantly at fault for their actions or lack thereof, meaning they have made serious mistakes or have been negligent in their responsibilities.