Termination of employment agreement

Termination of employment agreement

Have you been fired and do you wish to contest your dismissal in the Netherlands? Then you can do this via two differing routes. Dismissal due to economic conditions and dismissal in the event of long-term disability are processed via the government agency UWV WERK (UWV). In the event of dismissal for personal reasons, such as a conflict at work or improper functioning, the employer must request dissolution of the employment agreement from the district court.

Appeal and cassation in redundancy proceedings

In the Netherlands, one can appeal a district court’s decision and, if necessary, lodge an appeal with the Supreme Court.

Summary dismissal

Summary dismissal in the Netherlands is quite rare. Employees can be dismissed summarily only for compelling reasons. This carries serious consequences for the employee. For example, his entitlement to employment benefits and other compensation, the so-called “WW”, lapses in the event of summary dismissal. For these reasons, stringent conditions are placed on summary dismissal: there must be demonstrable evidence of compelling reasons, the dismissal must be given “immediately” and the party must be informed immediately and in writing of those compelling reasons at the same time as the dismissal.

Contesting summary dismissal

The employee can contest his summary dismissal by lodging an appeal with the district court within two months for the voiding of the summary dismissal.

Employee resigns with immediate effect

Otherwise, an employee in the Netherlands can himself resign with immediate effect. The same stringent conditions that apply to the employer in the event of summary dismissal also apply to the employee if he/she resigns with immediate effect.

Resignation by mutual consent

The employer and the employee can also terminate the employment agreement by mutual consent. This is done by means of a settlement agreement, also called the termination agreement. In such agreements, the end-date of the employment is agreed, along with the amount of any compensation and agreements about the end of any non-compete and/or non-solicitation clauses, for example, and the acquisition of any company property. In principle, by concluding a settlement agreement on neutral grounds and by taking the (fictitious) cancellation period into account, the employee’s “WW” benefits are safeguarded.

Severance payment

Severance payment, sometimes referred to as a “golden handshake”, is the amount that an employee receives from his employer upon dismissal. Since 1 July 2015, there are two legal types of severance payments in the Netherlands, namely: transition compensation and supplemental reasonable compensation.

Transition compensation

An employee is entitled to transition compensation if he was employed for more than two years at the moment of his resignation. Calculate the amount of the transition compensation applicable in your situation using our calculation tool. The employer and the employee can also establish the amount of severance pay in mutual consultation and record this in a termination agreement to be concluded.

Reasonable compensation

Reasonable compensation is supplemental compensation that can also come about if the employer can be said to carry considerable blame for acts or omissions.

Dutch law firm for employment law

Law firm AMS is based in Amsterdam, The Netherlands. The attorneys have gained a broad experience in advising and litigating for (international) companies and individuals. The attorneys are highly involved with their client’s interests and offer a sharp and transparent fee structure. Should you require more information on Dutch labour law, or should you have any question with respect to litigation, please feel free to contact our employment lawyer in The Netherlands.