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

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.   The   same   applies   to   the   second   and   third   contract of   employment   for   a   definite   period   provided   that   the   total duration    of    all    such    contracts    of    employment    does    not exceed   24   months. The   second   and   third   contracts,   like   the original   contract,   terminate   by   operation   of   law   at   the   end of    the    respective    definite    periods.If    a    fourth    successive contract   of   employment   for   a   definite   period   is   entered into   or   the   two   year   /   24   months   limit   is   exceeded,   the fourth   or   last   contract   of   employment   is   then   considered to   have   been   for   an   indefinite   period   and   the   above   rule concerning    termination    by    operation    of    law    does    not apply    any    more.    If    the    time    span    between    contracts    of employment   for   a   definite   period   is   6   months   or   longer, however,    they    are    not    regarded    as    successive    but    as separate   contracts   of   employment   for   a   definite   period. 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

Contracts for an indefinite period

A   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 (see   1.)   during   the   trial   period,   (see   3.)   by   mutual   consent, (see   4.)   by   (justified)   summary   dismissal,   -   in   the   event   of bankruptcy   or   receivership      -   concerning   the   termination of   the   contract   of   a   managing   director,   bestuurder,   of   a limited    company    (ltd.),    besloten    vennootschap    (BV)    The labor   office   UWV-Werkbedrijf   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 - -