Termination of employment agreement

Termination of employment agreement

Dutch employment law

The most notable feature of Dutch employment law is that employers require the approval of the court or a government agency before terminating an employment contract. This is only different in cases of gross misconduct or in case an employment contract is terminated by mutual consent.

Dismissal through the Dutch court

The employer can request the Cantonal Court judge to dissolve the employment agreement due to serious reasons (economic reasons or reasons of incompetence). The procedure before the court usually takes about two months and involves a written request, a written defence and a hearing. The court is not bound by notice periods. If the Cantonal Court decides that the employment agreement will be dissolved, she usually grants the employee a severance payment, based on the so-called Cantonal Court Formula. This severance payment is a lump sum payment, based on the age, length of service and salary of the employee involved.

Termination with permit: giving notice

If this is agreed on in an employment agreement, it may be terminated one-sided by giving notice to the other party. However, if the employer wishes to give notice of termination, he requires prior permission from a government agency, the so-called UWV Werkbedrijf (‘UWV’). The UWV will investigate the employers’ reasons for the requested termination of the employment agreement. If the UWV has the opinion that there are not sufficient grounds for termination, permission will be denied. This procedure takes about two months. After the dismissal permits have been issued, the employer should still give notice of termination of the employment agreements to the employees.

Redundancy payments

As described above, the Cantonal Court may grant severance payments if an employment agreement will be dissolved. The UWV does not decide on such severance payments. If the employer doesn’t offer a severance payment or only a small severance payment, and the dismissal permit is issued by the UWV (and is used by the employer), the employee may begin litigation at the Cantonal Court to obtain damages on the basis of ‘manifestly unreasonable dismissal’.

Dutch law firm for labour 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 labour lawyer in The Netherlands.