Termination of the employment contract in

Holland | Dismissal

The termination of employment contracts differs markedly from most foreign legal systems, in particular with respect to the well evolved degree of protection against dismissal. There are five ways in which contracts of employment may be terminated under Dutch law: 1. During the trial period; 2. By notice; 3. By mutual consent / termination agreement; 4. By summary dismissal; 5. By judicial termination.

Termination of the employment contract -

5 modes

1. Termination during trial period - proeftijd

During the trial period, proeftijd, either party may terminate the contract of employment at will. Termination is with immediate effect and without prior notice. A contract for a definite period of 1 year has a maximum trial period of 1 month. The trial period with a contract for an indefinite period may not exceed 2 months. However, a collective labour agreement (CAO) may stipulate otherwise.

2. By notice - voorafgaande opzegging

With respect to termination by notice, opzeggen van de arbeidsovereenkomst, there are contracts for a definite period and contracts for an indefinite period.

Contracts for a definite period | temporary contract

A contract of employment for a definite period, arbeidsovereenkomst voor bepaalde tijd, terminates by operation of law at the end of this period without prior notice. Neither the original nor extended term of a contract for a definite period may be terminated by notice before the expiry of the period, unless agreed to by parties otherwise. However, a contract for a definite period may still be terminated by mutual consent, summary dismissal or judicial termination. Since January 1, 2020, a temporary contract will automatically change into a permanent contract if an employee has received more than 3 consecutive temporary contracts. Or if an employee has had several temporary contracts with his employer for more than 3 years. (Unless there are other rules in the collective labor agreement / CAO ).

Contracts for an indefinite period | permanent

employment contract

An employee automatically receives a permanent employment contract when: • there are several temporary contracts with the same employer for more than 3 years. Or for the same type of work with successive employers. (example; started work through an employment agency and later directly at the employer with a temporary contract); • a maximum interval of 6 months between the contracts. For temporary recurring work (not limited to seasonal work) that can be done for a maximum of 9 months per year, there may be a maximum of 3 months between the contracts. This must be included in the collective labor agreement/CAO; • There are no other conditions in this regard in the collective labor agreement CAO. The agreements in the collective labor agreement take precedence. A permanent employment contract / contract for an indefinite period (arbeidsovereenkomst voor onbepaalde tijd) as "indefinite" implies, does not expire on a particular date but continues indefinitely until terminated by notice, or by one of the other methods discussed in this section.Before notice may be given, permission from the labor office UWV-Werkbedrijf must be obtained. Without UWV-approval, the notice is void. However, approval is not required in case of: • termination • during the trial period, • by mutual consent, • by (justified) summary dismissal, • in the event of bankruptcy or receivership of the employer The labor office UWV will only grant a permit if the proposed termination is deemed objectively reasonable. The employer must therefore indicate the grounds on which his request is based while the employee against whom it is made may submit a defence, verweerschrift. Thus, permission is not granted automatically as a simple posterior formality. The whole procedure normally lasts eight weeks although in practice it may take longer if a hearing is scheduled or further documents are requested as evidence. This can be the case if the proposed layoff, redundancy or downsizing is based on business economic reasons, called ontslag wegens bedrijfseconomische omstandigheden. Then the employer must provide a financial report by an accountant that proves that there has been a dowturn in business for the past 3 fiscal years and that downsizing the workforce is the most cost effective measure.

3. Termination agreement - beëindigingsovereenkomst

Contracts of employment for definite and indefinite periods may be terminated by mutual consent, beëindiging met wederzijds goedvinden. No notice is required. Case law has established strict requirements with respect to the validity of the termination by mutual consent since this often has detrimental consequences for the employee (for example, if the statutory notice period hasn't been observed loss of entitlement to unemployment benefits for the duration of said period, called fictieve opzeggingstermijn). In order for it to be held valid, the employee's consent must have been given explicitly and unequivocally. Termination is therefore usually in the form of a written agreement, beëindigingsovereenkomst or vaststellingsovereenkomst. A good criterium is that the employee must not be at a disadvantage (financially) when compared to a regular termination by notice.

4. Summary dismissal - ontslag op staande voet

If an urgent cause exists, an employer may summarily dismiss an employee. It's known as ontslag wegens een dringende reden or ontslag op staande voet. In such a case, the contract of employment is not terminated by notice but with direct effect. Consequently the provisions which apply to termination by notice do not have to be observed. An urgent cause consists of a situation which is such that the employer cannot reasonably be expected to allow the employment to continue. Clear examples are theft, fraud, embezzlement or divulging confidential information to third parties.In most cases, however, an urgent cause depends on the specific circumstances of the case. If an employer is hesitant in effecting a summary dismissal - such as instant removal from the workplace - it will be void regardless of whether an urgent cause did actually exist.

5. Judicial termination - ontbinding door de kantonrechter

Both employers and employees may request that the tribunal - the cantonal judge kantonrechter - terminate a contract of employment on the grounds of "serious cause". It's known as gewichtige reden. A serious cause will be deemed to exist if either: I. the circumstances are such that they would have amounted to an "urgent cause" for summary dismissal if the contract had been terminated instantly; or, II. there is a change of circumstances of such a nature that the contract should in all reasonableness be terminated instantly or on short notice. The employee may submit a written defence, verweerschrift. If the court deems that serious cause does indeed exist, it will terminate the contract. If it is granted on the basis of serious cause due to a change in circumstances, the court may award the employee compensation in an amount which it deems reasonable. Compensation is calculated using a formula called transitievergoeding Compensation is calculated according to the transitievergoeding. Contact us for more information. -

Restrictive clauses of the employment contract

non-compete / non-competition clause. Click the button for more information - -