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.