Dismissal procedures and protections

Do you have a company in the Netherlands and do you want to dismiss staff? You must follow a dismissal procedure. In some situations you are not allowed to dismiss an employee, for example when you need permission for dismissal from the Employee Insurance Agency or sub-disctrict court and do not get it.

Reason for dismissal

In the Netherlands, you must have a valid reason for dismissing employees. Valid reasons are for example refusal to perform work, culpable conduct, excessive sickness absence, reorganisation, or company closure.

Employee agrees with dismissal

If your employee agrees with the dismissal, there are 2 options:

• Dismissal by mutual consent (in Dutch). This mean that you and your employee mutually agree to end the employment contract. You need to record the terms of the dismissal in a written settlement agreement (termination agreement). You do not have to pay a transition payment, but you do need to reach a final settlement, for instance on unused vacation days. An agreement on dismissal compensation or severance pay is an option. You must take into account the notice period.
• Termination with consent (in Dutch). This means you decide to end the employment contract and your employee agrees with this in writing. You do have to pay your employee a transition payment and take the notice period into account.

For dismissal by mutual consent and termination with consent you do not need approval by the Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV) or the sub-district court.

Employee reconsideration period

Your employee has 14 days to reconsider the dismissal. During this period, they can revoke their consent without giving a reason. You must clearly state the reconsideration period in your termination agreement. If you fail to do so, the reconsideration period will be automatically extended to 21 days.

Employee does not agree with dismissal

If your employee does not agree with the dismissal, you need the approval of the Employee Insurance Agency (UWV) or the sub-district court. The grounds for dismissal determine which of these 2 you need to ask for permission.

Permission for dismissal from the Employee Insurance Agency

You must request permission from the Employee Insurance Agency if the dismissal is:

• for economic reasons, such as bankruptcy or restructuring. You must request a dismissal permit for economic reasons (in Dutch)
• due to an employee's long-term incapacity to work. You must request a dismissal permit due to long-term incapacity to work (in Dutch)

If your request is for dismissal for economic reasons, you have to explain the reasons for the dismissal (in Dutch).

Without a dismissal permit, you cannot dismiss your employee. If you disagree with UWV's decision, you cannot file an objection with them. You will have to turn to the sub-disctrict court to start proceedings for termination of the employment contract.

Your Collective Labour Agreement (CAO) may provide for a (sector) dismissal committee that is independent and unbiased. If so, this committee will evaluate a dismissal for economic reasons rather than the Employee Insurance Agency.

Permission from the sub-district court

You have to apply to the sub-district court if there are other reasons for dismissal (in Dutch), such as unsatisfactory performance or conflict. The court will check if all the relevant legal criteria have been met.

To get permission from the sub-district court, you have to send a request for the termination of the employment contract (verzoek tot ontbinding van de arbeidsovereenkomst, in Dutch). Do you disagree with the sub-district court regarding a dismissal? Then you can appeal against the decision.

Are there several reasons why an employee does not perform well and therefore you want to dismiss the employee? And are these reasons separately not sufficient ground for dismissal? You can combine these reasons and ask the sub-district for dismissal on cumulative grounds (in Dutch). The court may tell you to pay your employee an extra sum on top of the transition payment (at most 50% of the transition payment).

Dismissal without permission

In some cases, you can dismiss an employee without approval for dismissal (in Dutch). You do not need permission for dismissal if the employee:

• has reached the state pension age (AOW-leeftijd)
• falls into a category where no permission for dismissal is required (for example, specific categories of domestic workers)
• is dismissed due to bankruptcy
• is still in the probationary period
• is dismissed on the spot (in Dutch)

Do you dismiss an employee without permission (dismissal permit) from UWV or the sub-district court and were you required to have this permission? Then the dismissal is not legally valid. The employee can then ask the sub-district court to undo the dismissal. The employment contract will continue to exist and you must continue to pay wages to your employee.

Notice period

As an employer, you must take the notice period into account. Dismissal procedures take time to go through UWV or sub-district court. You may subtract some of this time from the notice period. However, a notice period of at least a 1 month must be observed.

Dismissal of multiple employees (collective redundancy)

Do you want to dismiss more than 20 employees for economic reasons within a 3-month period and within 1 geographical work area? This is called collective redundancy. You have to report a collective redundancy with the UWV.

Dismissal of ill employees

You are only allowed to dismiss an ill employee in specific circumstances, such as during the probationary period or when you are facing bankruptcy. You are also allowed to dismiss an employee after 2 years of long-term illness.