Sometimes it cannot be avoided that a company has to let go off staff. This may be due to economic reasons, a labour conflict or poor performance. Our team of lawyers has extensive experience in the rules governing dismissal. Together with you, we will look at the various options for parting with an employee.
When you need to dismiss an employee, we will first discuss the matter with you. There are different (dismissal) options depending on the situation.
There are also different routes you can take to terminate an employee’s employment. These include concluding a settlement agreement, going to court, or starting a procedure at the UWV. However, before resorting to these steps, we will look into whether the parties may be able to find a solution through mediation. Is there no other way than going to court or starting a procedure at the UWV? In that case, we will handle this diligently for you.
Grounds for dismissal
An employer can dismiss an employee when there are ‘reasonable grounds’ for dismissal. A requirement is that relocating the employee is not possible (the exception is when the employee is guilty of culpable conduct). Article 7:669 of the Dutch Civil Code (BW) sets out the grounds on the basis of which an employment contract can be terminated. In the Netherlands, the law governing dismissal is a closed system. This means that the termination of an employment contract can only take place in a way regulated by law. In addition to dismissal for economic reasons, about which more can be found under the topic reorganisations, the most common grounds for dismissal are: poor performance, culpable conduct, impaired working relationship, difference of opinion, long-term incapacity for work, and cumulative grounds (i-ground).
Settlement agreement (VSO)
The employer and employee can enter into a settlement agreement. In the settlement agreement, the employer and employee can negotiate the terms of the termination of employment. The parties can reach agreement in the settlement agreement on more than just the reason for dismissal and the date by which the employment contract ends. Examples include agreements on: severance pay, relieving the employee of all work responsibilities, final settlement, non-compete clause and/or full acquittal. Also, the parties can formulate the agreements in the settlement agreement in such a way that the employee can claim an unemployment benefit.
When entering into a settlement agreement, it is important that the terms are clear and agreed on in full. After all, it would not be beneficial for the parties to argue about the interpretation of the provisions after the settlement agreement has been concluded, or to get into a dispute with the UWV about the unemployment benefit. It is therefore recommended to use a settlement agreement that was drawn up or reviewed by a specialist in labour law and employment law. In this regard, it is also recommended to advise the employee to have the settlement agreement checked by an employment law specialist.
If the employee starts to have doubts, the employee can dissolve the settlement agreement within two weeks. This grace period must be included in the settlement agreement, otherwise a period of three weeks will apply. If an employee makes use of this grace period, the employment contract will simply continue.
Subdistrict court
In the remaining cases, when termination of the employment contract is not possible through a settlement agreement or through the UWV, it will have to be handled through the subdistrict court. The judge will look at whether any of the grounds under (a) to (i) apply for dismissal.
Culpable conduct
An employer may, for example, be able to invoke the e-ground if the employee regularly arrives at work late, or refuses to carry out reasonable tasks. In such cases, the employee is guilty of culpable conduct or is culpably negligent. Behaviour that is of such a culpable nature that it is unreasonable for the employment contract to continue may count as grounds for dismissal due to culpable conduct.
Poor performance
If you want to dismiss an employee because of poor performance, you can invoke the d-ground. In this case, you will have to prove to the subdistrict court why your employee is not suitable for his job. There must be a good, provable reason for this. This will require building up a record. The compiled record will in any case have to demonstrate the following:
- What are the job requirements and why does your employee not meet them?
- You must have given the employee (a reasonable) opportunity to improve his/her performance (an improvement process)
- You have no other suitable work for the employee within the organisation
Furthermore, you need to make sure that the reason for dismissal is not illness, disability, or due to working conditions or the employee’s training.
In practice, we often see that building a record turns out to be difficult, but it is necessary when you want to part with an employee because of poor performance. If the employer has been trying to help the employee improve his performance for over a year, but has not documented this in writing, a dismissal on the basis of poor performance will be difficult. As a result, such cases often fail due to the lack of written agreements on the improvement process. While documenting the agreements can actually be beneficial for both the employee and the employer. It will ensure that an employee clearly knows what improvements are expected of him and, the employee can also make agreements on what resources he needs from the employer to be able to improve.
Would you like to adapt or expand your HR policy regarding this topic? Or do you need to get your HR department and/or all line managers up-to-date on the possibilities regarding the improvement process/record building? We will be happy to help you with this. We give training to HR staff and/or line managers on record building and improvement processes. We can also provide you with standard formats for improvement processes. Would you like more information? Call our Team Labour Law.
Impaired working relations
A labour dispute arises when the working relationship is impaired to such an extent that it cannot be restored. An example of an impaired working relationship is when your employee does not respond or responds improperly to orders given by you within reason. Dismissal can be requested when the working relationship is irreparable. This can be justified on the basis of the following questions:
- What is the reason that has caused the working relationship to be impaired?
- What have you, the employer, done to improve this relationship?
- Is there no alternative solution to this conflict, such as relocation?
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