Things to consider when confronted with dismissal

Godelijn Boonman

Even though the Dutch economy is growing again, many companies are still dismissing employees. When confronted with dismissal, these are the top 8 things to consider:

1. Contract: An employer cannot terminate a permanent contract without your agreement. Nor can he or she terminate a temporary contract prior to its scheduled date of completion. Only the UWV or the cantonal court can give permission to end a contract if parties are unable to reach an agreement.

2. Compensation: if you have in employment for two years or more, an employer must pay compensation for the dismissal. This is known as the transitional statutory allowance. During the first ten years of employment, this amounts to 1/6 of the monthly salary per every six full months of employment. After 10 years, the compensation increases. The compensation is then 1/4 of the monthly salary per every six full months that the contact continues after the initial ten years.

Since January 1, 2017 the maximum transitional allowance is €77.000,00 gross or, if more, the total of one yearly salary. There are a few exceptions for employees older than 50 and working for the bigger companies or companies with less than 25 employees.

3. Reasonable grounds: an employer must have reasonable grounds to end the agreement and must also have tried to find another suitable position within the company before suggesting termination. If both are not the case, and you do want to agree to a proposed dismissal, be sure to negotiate a higher compensation than the transitional allowance. It is likely that your employer will be willing to pay more because the UWV or a court will not grant permission for dismissal.

4. Period of notice: an employer must take the notice period into account when ending an agreement. The notice period depends on how long you were employed:

  • Less than 5 years: one month notice;
  • Between 5 and 10 years: 2 months notice;
  • Between 10 and 15 years: 3 months notice.
  • For 15 years or longer, you must be given four months notice. The employment agreement should not end until that period has been taken in to account. The notice period commences on the date the parties reach an agreement.

5. Garden leave: try to agree upon garden leave during the notice period. Garden leave entails that you continue to receive your salary without working. You then also have time to look for other work.

6. Make sure a non-compete or a business relations clause is waived in the agreement.

7. Vacation days: employers tend to not want to pay outstanding vacations days so be careful!

8. Dissolve: finally, an employee has the right to dissolve the agreement within 14 days.

Advice

We advise to seek legal advice when confronted with dismissal. Do not be too afraid of legal fees. Most employers are willing to compensate at least part of these fees and our lawyers know whether an employer stands a chance in court. The wording of the termination agreement itself is also important to ensure entitlement to unemployment benefits.

Please do not hesitate to contact us.

Update article: December 2017. 

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