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Termination of Employment in the Netherlands by Zelena Kasim LL.M

Termination of Employment in the Netherlands by Zelena Kasim LL.M

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Published by zelena_kasim
Dismissal in the Netherlands
This whitepaper gives a general overview on the termination of an employment contract in the Netherlands. It can be used as a guide to give you a first impression of what can be expected when a question on terminating a Dutch employment contract arises.
Dismissal in the Netherlands
This whitepaper gives a general overview on the termination of an employment contract in the Netherlands. It can be used as a guide to give you a first impression of what can be expected when a question on terminating a Dutch employment contract arises.

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Published by: zelena_kasim on Jul 06, 2011
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Whit_p[p_r
Dutch Employment Law Series - # 1
June 2011
Kasim Legal The Netherlands www.kasimlegal.nl
Page | 1
TTeerrmmiinnaattiioonnoo eemmpplloo y  y mmeenntt 
 Author: Zelena Kasim LL.M 
1. Introduction
This whitepaper gives a generaloverview on the termination of anemployment contract in theNetherlands. It can be used as a guideto give you a first impression of whatcan be expected when a question onterminating a Dutch employmentcontract arises.
2. Dutch employment contracts
In The Netherlands there are two typesof employment contracts:1.
 
Temporary employmentcontract; and2.
 
Permanent employmentcontract.
Temporary employment contracts
Temporary employment contracts willterminate automatically by law on theagreed ending date. A dismissalprocedure is not required. Prior noticehas to be given if this is a requirementof the employment contract.
 A different situation occurs if one (or bothparties) wants to end the employmentcontract before the agreed ending date. Inthis case, the option for termination of thecontract before the ending date has to bepart of the employment contract. If theemployer wants to end the contract beforethe date agreed, the employer must follow a legal dismissal procedure.If more than three temporary contracts with the same employer have been agreed within less than a three-month break  between each contract, the latestemployment contract will becomepermanent. This means that the rules for apermanent employment contract will startto apply.
 
 Permanent employment contract 
 A permanent employment contract isone concluded for an indefinite periodof time.
 A permanent employmentcontract has no ending date.
 A permanent employment contract isterminated by notice. Such a noticerequires authorization from theEmployment Office (UWV- WERKbedrijf). This is a governmental body.
3. Termination of employmentcontract
 An employment contract can beterminated in four ways:1.
 
By mutual consent;2.
 
By operation of law;3.
 
By notice;4.
 
By judicial rescission;
4. Termination by mutualconsent
 An employment contract may beterminated by mutual consent. Thetermination must be confirmed in a written document signed by bothparties. Termination by mutualconsent is possible at any time. It isimportant for the employer to check if the employee has understood theconsequences of termination and isreally willing to terminate theemployment contract. Should this not be the case, a judge may conclude thatthe employee has been dismissedunilaterally.
 
Whit_p[p_r
Dutch Employment Law Series - # 1
June 2011
Kasim Legal The Netherlands www.kasimlegal.nl
Page | 2
The legal consequences of atermination by mutual consent are that both parties will lose the right to cancelthe dismissal and the right to claim for wrongful or manifestly unfairdismissal. Parties will not be able toclaim for compensation on thesegrounds.
5. Termination by operation of law 
 As I have noted above, a temporary employment contract will terminateautomatically on the agreed endingdate. A dismissal permit is not requiredand the prohibitions to dismiss do notapply. A notice is only required if it isagreed.Employments contracts may terminateautomatically when the employeereaches the statutory retirement age, which is no set at the age of 65. Anemployment contract will alsoterminate when the employee dies.Please note that an employmentcontract will not necessarily terminate with the death of the employer.Employment contracts may containclauses which bring about anautomatic end to the contract if acertain event occurs. An employmentcontract may not end automatically due to a marriage or pregnancy of theemployee.
6. Termination by notice
 Notice of termination of a permanent employment contract 
Notice by the employer of terminationof the employment contract requires apermit from the Employment Office. Any notice given to an employee without the permit is null and void.Thus, it does not terminate theemployment contract. A request for dismissal by an employercan be justified if it is based on:1.
 
Incapability of the worker;2.
 
Redundancy;3.
 
Other substantial reasons; suchas very bad relationship between the employer and the worker.The Employment Office will issue thepermits on average within six weeks.Once the permit has been granted,notice of termination may be given tothe employee. Please not that it is notpossible to give notice to employees who fulfill certain requirements or for whom certain conditions apply. Thismeans that an employee who ispregnant or ill may not be given notice.If notice is given under suchcircumstances, the dismissed employeemay nullify the notice by writing aletter to that effect. An employee, who disagrees with thegranting of the permit, can turn to thecivil judge and complain aboutmanifestly unreasonable dismissal. If the judge agrees, he may reinstate theemployee or grant the employeefinancial compensation. Reinstatementcan be opposed by the employer. Inthis case the judge will increase thefinancial compensation.
Trial period 
The trial period is a very common partof a (temporary) employment contract with the employer. A trial period willapply for both parties and needs to beagreed in writing. If the duration of thetemporary employment contract is lessthan two years, the maximum trial
 
Whit_p[p_r
Dutch Employment Law Series - # 1
June 2011
Kasim Legal The Netherlands www.kasimlegal.nl
Page | 3
period is one month. The legalmaximum trial period is never any longer than two months. During thetrial period, either party may terminatethe employment contract without priornotice and without a permit from theEmployment Office. Termination may take place with immediate effect.Termination during a trial period doesnot give any party any claim on the basis of obviously unreasonabledismissal.
Obviously unreasonabledismissal 
The employee may seek redress incourt if the termination of employmentcontract is obviously unreasonable.The employee may claim severancepayment or request reinstatement. If the request for reinstatement isgranted by the judge, the court may berequested to establish a lump sumpayment to buy off the reinstatement.Obviously unreasonable dismissal may the case if:
 
no (motivated) reason for thetermination is given;
 
if the hardship endured by theemployee is disproportionate tothe interest of the employerconsidering the financialarrangements made for theemployee and his prospect of finding a new job;
 
termination deviates from aseniority rule in the particularcompany.
Termination for urgent cause
 An employment contract may beterminated without notice and withimmediate effect if an urgent causeoccurs. A permit of the EmploymentOffice is not required in this case.Examples of an urgent cause for theemployer:
 
Misleading or false statementsmade in the application foremployment;
 
Intimidation;
 
Serious lack of competence inperformance;
 
Theft, fraud, or other crimes.The employee may also have an urgentcause to terminate the employmentimmediately. Examples for an urgentcause are:
 
The wage is not received timely;
 
Due to illness, the employee isnot able to execute theemployment contract;
 
Continuation of the employmentcontract causes serious harm tolife, health, morality or goodname;
 
The employer gravely insults orthreatens the employees or hisfamily.The cause must be serious andsufficiently urgent to warrantimmediate termination. The causemust also be communicated as soon aspossible to the employee or theemployer. Any delay in thecommunication will be regarded asevidence that the cause was not urgent.

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