Termination of employment in the Netherlands
What should an employee do in case of termination of employment in the Netherlands?
In the event of employment termination in the Netherlands, individuals seeking to contest their dismissal under Dutch law can pursue two distinct avenues.
Initially, if the termination of employment is due to economic reasons (for instance a collective redundancy) or long-term disability, the government agency UWV WERK (‘UWV’) oversees the process.
Conversely, when termination of employment in the Netherlands occurs for personal reasons, such as workplace conflicts or subpar employee performance, the employer is required to petition the district court for dissolution (termination) of the employment agreement. This local court handles both civil and criminal cases.
Appeal against a court decision regarding
In the Netherlands, appealing a district court’s ruling is possible, allowing a higher court to examine and potentially reverse the decision. If needed, an appeal to the Supreme Court can also be made, as it holds the highest authority in the Netherlands and the power to review and overturn lower court judgments.
Summary termination of employment in the Netherlands
Summary dismissal, a rare form of termination of employment in the Netherlands without notice, occurs only under compelling circumstances, such as severe misconduct. This type of termination leads to significant consequences for the employee, including the loss of employment benefits and “WW” benefits, which are Dutch government-provided unemployment compensation. For a valid summary dismissal, clear evidence of compelling reasons, immediate action without delay, and written notification to the employee are essential.
Employees can contest their summary dismissal by submitting an appeal to the district court within two months, aiming to nullify the termination.
Resignation with immediate effect by the employee
In the Netherlands, employees can resign with immediate effect, leaving their job without giving notice. The stringent conditions applicable to employers for summary dismissal also apply to employees who choose this immediate resignation route.
Termination of employment in the Netherlands by mutual consent
Another option involves both parties agreeing to terminate the employment contract through mutual consent, typically via a settlement or termination agreement.
This document specifies the employment end date, compensation amount, resolution of non-compete and/or non-solicitation clauses (restricting employees from joining competitors or poaching clients), and the return of company property.
A mutually agreed-upon settlement, factoring in the (fictitious) cancellation period (used to calculate unemployment benefits), safeguards the employee’s “WW” benefits.
Severance payment in case of termination of employment in the Netherlands
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 awarded to employees who have served over two years upon resignation. A calculation tool can be used to determine the appropriate amount tailored to your specific situation. In any case, an employment lawyer in the Netherlands can assist you with this. 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 granted when the employer’s actions or inactions, such as severe mistakes or negligence in their responsibilities, are significantly at fault.
