In the Dutch jurisdiction, employment contracts can end in various ways, such as by concluding a termination contract, by giving notice or by operation of law, when the agreed fixed term has expired. In addition, the law offers an alternative option; the dissolution of the employment contract by means of a dismissal procedure.
In the Netherlands, a dismissal procedure is a court procedure where the subdistrict court is asked to dissolve the employment contract. A petition to that effect can be filed by the employer or the employee and should be supported by evidence of the relevant dismissal ground. If the subdistrict court grants the request, the employment contract ends on a date determined by the judge in the decision.
At the employee's request, the subdistrict court may dissolve the employment contract due to circumstances which, as stated by law, are such that the employment contract should be terminated immediately or after a short period of time, for reasons of equity.
This really concerns exceptional cases, because an employee who wants to terminate the employment can of course also simply give notice. An important difference is that the subdistrict court judge can grant a fair compensation to the employee in the event of dissolution, if the dissolution of the employment contract is the result of serious culpable acts or omissions on the part of the employer, such as in the case of a labor conflict intentionally caused by the employer.
In the case of employee requests of this kind, the stake is often the fair compensation. Case law shows that the judge is not quick to assume that there has been serious culpable conduct, but in appalling cases, the employee's request is an option to both terminate the employment and get satisfaction for the culpable behavior of the employer.
At the request of the employer, the subdistrict court may dissolve the employment contract on grounds of dismissal stated in the law, which are named after the letter used in Article 7: 669 paragraph 3 of the Dutch Civil Code:
This ground for dismissal occurs if the employee is unable to work regularly due to illness or defects with unacceptable consequences for business operations, provided that the inability to regularly perform the stipulated work is not the result of insufficient care by the employer for the working conditions of the employee.
This concerns the employee's inability to perform the stipulated work, other than as a result of illness or defects of the employee. A requirement is that the employer has timely informed the employee of the poor labour performance and has given him sufficient opportunity to improve functioning. Another requirement is that the unsuitability is not the result of insufficient care by the employer for training the employee or for the working conditions of the employee.
This ground for dismissal occurs in the event of culpable acts or omissions on the part of the employee, such that the employer cannot reasonably be expected to continue the employment contract. So it concerns fairly serious missteps of the employee. These grounds usually also arise in the case of summary dismissal.
This concerns the refusal of the employee to perform the stipulated work because of a serious conscientious objection, provided it is plausible that the stipulated work cannot be performed in an adapted form. This ground for dismissal is not often applied.
This must involve a disturbed employment relationship, such that the employer cannot reasonably be expected to continue the employment contract. A point of attention here is that the employer who himself causes the disturbed employment relationship will not easily get dissolution on the basis of this ground for dismissal.
According to the law, this concerns circumstances other than those referred to above that are such that the employer cannot reasonably be expected to continue the employment contract. Quite soon after the introduction of the Work and Security Act in 2015, it turned out that this really is a residual category and that it is not a substitute for an otherwise unjustified ground for dismissal.
The Dutch legislator met the legal practice by adding the I ground in 2020 when the Labor Market in Balance Act (WAB) came into force. Based on the I-ground the employment contract can be dissolved, if there is a combination of circumstances mentioned in two or more of the other grounds, such that the employer cannot reasonably be expected to continue the employment contract.
Finally, the employer can request termination of the employment contract for economical reasons, if the Dutch employment agency UWV has refused to grant the required permission to give notice, or if there is an agreement that cannot be terminated prematurely, so that applying for a termination permit is pointless.
In principle, the employee is entitled to the transitional payment if the employment contract is dissolved at the request of the employer, so it is often awarded in the decision. If the employment contract is dissolved on the I-ground, the judge has the option of granting one and a half times the transition compensation. An employee is not entitled to a transition payment if the dismissal is the result of his serious culpable acts or omissions.
The subdistrict court judge can grant the employee fair compensation on top of the transition payment if the dissolution of the employment contract is the result of serious culpable acts or omissions on the part of the employer.
Those who disagree with the decision of the subdistrict court can appeal to the Court of Appeal within three months. An appeal can be lodged with the Supreme Court against the decision of the Court of Appeal.
Our lawyers regularly advise and litigate on termination of employment contracts. The vast majority of cases are settled because neither employers nor employees have an interest in a three-instance procedure. We like pragmatic solutions and are happy to assist you. Call us to make an appointment for a non-binding informative meeting, in which we can indicate what we can do for you. It is not without reason that our motto is: "Your problem, our concern."
Hein Kernkamp will gladly help you further.