Business owners in the Netherlands that wish to dismiss employees should know that the dismissal procedure is likely to take some time and regardless of the reason for termination it should be done according to the Dutch legislation.
Employment contracts in the Netherlands can be terminated according to the type of contract and by observing the mandatory notice period.
Ways to terminate a work contract in the Netherlands
Employment contracts in the Netherlands can be fixed term or indefinite term. The legal procedures for dismissal are more complicated for indefinite term contracts, although the employer is entitled to terminate the collaboration with the employee.
Fixed term contracts or employment contracts concluded only for specific projects end upon the expiration of the contract, generally after the completion of the project. In this case there is no need for a notice.
Indefinite term contracts can be ended in one of the following ways:
- the employer gives a notice to the employee, after receiving permission form a governmental organization;
- following certain court proceedings;
- by mutual consent between the two parties;
- by dismissal because of an urgent reason;
- if the employee gives a termination notice.
How to terminate a work contract
If the employer chooses to terminate a work contract with an employee and gives him/her a notice regarding this issue, he must first receive permission (a dismissal permit) from the Work Placement Branch of the Employee Insurance Agency (UWV WERKbedrijf). A dismissal permit will be granted only if the employer has a valid reason to dismiss the employee. Generally, it takes approximately three months to receive the aforementioned dismissal permit form the authorities. Without the permission, any notice of termination is considered null and void.
According to the Dutch law, the notice periods for contract termination are as follows:
- one month if the employee has worked for less than five years;
- two months for more than five years but fewer than ten years of employment;
- three months for ten or more years but fewer than 15; and
- four months for 15 or more years of employment.
Because of the substantial amount of time needed to obtain the dismissal permit from the authorities, the employer is allowed to reduce the notice period with one month (provided that there is at least one month of notice for the employee).
Generally, an employee cannot be dismissed during a maternity leave or during sick leave.
Our law firm in the Netherlands can help you with all of the legal aspects regarding work force management or general issues regarding business management in the Netherlands. Please contact our attornes in the Netherlands for a personalized offer.