Navigating the Labyrinth: Understanding Termination of Employment in the Netherlands

Facing potential job loss is among the worst fears for most of us. Being in a foreign country and staring dismissal in the eye can be an even more stressful event. 

However, termination of employment in the Netherlands isn’t an oversimplified case, in which a minor slip up will cause you your livelihood. The Netherlands is renowned for its robust employee protections and understanding the intricacies of termination of employment along with specific Netherlands firing requirements is crucial.

The Nuances of Getting Fired in the Netherlands

Losing your job isn’t simply a matter of hearing the words “you’re fired.” The dismissal process is a carefully regulated procedure, often with the involvement of Dutch legal bodies such as the UWV (Employee Insurance Agency) and the Cantonal Court.

Dutch employment law states that employers cannot simply fire their employees without valid reasons and following strict procedural requirements. In this respect, the law is designed to protect employees, their rights, giving a fair chance for everyone involved.

The Dutch Civil Code (Burgerlijk Wetboek) also governs employer and employee relationships. Book 7 of the BW specifically addresses work contracts, highlighting rules for basic principles, probationary time, agency work, long-term jobs, and contract terminations. \

There are also several types of termination that the law recognises in the Netherlands, and each brings its own set of implications and rules.

Mutual Consent

Mutual consent is often considered the most amicable option, which involves a termination or settlement agreement. This means that both parties agree and are fine with ending the employment contract. Mutual consents bypass the need for the involvement of local courts or the UWV but the employee still has a statutory right for a 14-day reconsideration period during which they can revoke their consent. 

In these cases, reading the termination agreement is highly advised as it’s not finalised until you sign it. If you have reasons to disagree with its contents, you always have the right to seek legal advice or help.

To be more specific, you should look for details such as:

• Dismissal reasons (if a conflict arose and you are held responsible, you may not be eligible for unemployment benefits if you sign).
• Payment of leftover bonuses, holiday leave, or other benefits
• Final salary and overall work duration
• Concurrentiebeding (non-competition clause) which may restrict you from offering your services to competitor companies for a specific amount of time.
• Severance payment or other compensations

If you do not agree with the terms of the dismissal, your employer must go to the UWV or the cantonal court for permission to terminate the work relationship.

Dismissal via UWV

If the reasons of the termination are related to specific business economic circumstances, such as collective redundancy, reorganisation, restructuring or long-term illness (after around two years of not showing up to work), the employer must ask for permission from the UWV to terminate your contract. The UWV then assesses the reasons behind the dismissal grounds and your adherence to the processes, and may give the green light if the reasons are valid.

The grounds of dismissal should be A-I grounds, or statutory dismissal grounds. These are specific, predefined reasons that make dismissal fair from the employer’s side. The grounds may vary but most often include capability, redundancy, conduct, and other substantial reasons.

Source: Pexels

However, without the approval of the UWV, employees cannot be dismissed. In those cases, they have the right to file objections and the decision-making period may last up to 12 weeks. If the UWV agrees to the employer’s request, the employee is served notice and may be entitled to transitional pay as a form of compensation.

Dismissal via the Cantonal Court

If the reasons behind the potential job termination are due to personal problems, such as misconduct, disrupted working relationship, underperformance, or any other urgent matter that isn’t under the jurisdiction of the UWV, the employer must reach out to the Cantonal Court to terminate (dissolute) the employment contract. 

The court must review the case carefully and ensure that all employer obligations have been met and sufficient effort was made to resolve the issue. 

Also, employers cannot simply dismiss someone due to poor work performance. First, employees must receive formal feedback, during a meeting or scheduled performance reviews. A verbetertraject, or performance improvement plan must be devised (in the form of additional guidance or training) and implemented in the following weeks or months to help the employee improve their performance. If the issues do not resolve and productivity does not improve over time, then the employer has solid grounds for termination. 

The Court’s Role

If the improvement plan fails, the employer, as mentioned, can reproach the district court to get approval for terminating the contract of the employee. The court’s duty is to check whether the dismissal meets all legal criteria before granting permission to the employer.

The employee also has the right to contest the court’s decision if it sides with the employer. Even then, the cort will issue a notice at the end of the notice period and the contract gets terminated. Employees may be entitled to compensation, based on the dismissal’s grounds.

Summary Dismissal

This is the most severe form of job termination, only reserved for more extreme cases and instances of gross misconduct or urgent cause, such as serious insubordination, or theft. Summary dismissal allows for immediate contract termination without issuing a notice period. However, the burden of proof for an urgent cause is high, and the employee can challenge it in court.

Employees who are fired this way are not entitled to get unemployment benefits.

Other Forms of Dismissal

Getting fired in the Netherlands isn’t a straightforward process, however, there are instances where getting dismissed may not have to involve any legal bodies. This also pertains to instances when resigning in the Netherlands doesn’t have to involve any third parties.

Constructive Dismissal in The Netherlands

This refers to a situation when an employee feels forced to leave due to the employer’s breach of contract and making working conditions intolerable. From unsafe environments to harassment to significant changes to job duties, the employer may pressure you to leave your role. 

While this concept isn’t defined explicitly in Dutch law, authorities will treat these cases as  improper dismissal (onrechtmatig ontslag) or a forced resignation. This means that you have the right to take legal action. You may also be eligible for compensation and unemployment benefits, but you will need to present strong evidence. 

Most often, these cases are resolved through legal counsel or mediation, making documenting and reporting any workplace issues even that more important.

Dismissal/Resignation During Probationary Periods

The law doesn’t mention any conditions for probationary period employment termination. This essentially means that both the employee and the employer have the right to terminate the contract without any notice period or the involvement of the UWV. Also, the employee doesn’t need to tell the reason for their resignation. 

These cases are much more straightforward than indefinite contract termination cases in the Netherlands.

Temporary Contract Expiration

Since these work arrangements already have predefined end dates, there’s not much legal action employees can take if the employers choose not to renew the contract. 

However, these contracts cannot be terminated early, unless in cases of mutual agreement (or otherwise agreed upon in the contract). The employer must also tell the employee in advance whether the contract will be renewed or terminated. If the employer fails to inform the employer at least a month in advance, they have the right to remind them.

These contracts automatically become permanent if the employee had at least three temporary contracts with the same employer or had been temporarily employed for more than two years. Dismissal in such a situation means that the employer must go through the same dismissal process like in the case of permanent contracts.

Source: Pexels

Dismissal Without Permission

In specific cases, employers may dismiss employees even when the latter don’t agree, and without the district courts or the UWV’s permission. These cases are:

• When the employee has reached pension age.
• If the employee works in a piston where no dismissal permissions are required (specific domestic worker categories)
• Dismissal due to bankruptcy

Key Considerations in the Dismissal Process

Regardless of the type of dismissal, there are consistent elements in every job termination according to Dutch dismissal law:

• Notice Period: If you aren’t on a probationary period or facing summary dismissal, your employer must issue a notice period. Its length depends on your service, ranging from one to four months.
• Transitievergoeding or Transitional Payment: This is a crucial aspect of Dutch labour law. This severance payment is mostly always due to the employee when the dismissal is initiated by the employer and the employee is not at fault. The pay is a form of compensation for terminating the employment contract and helping the employee transit to a new job or unemployment benefits.
• Documentation: During the dismissal process, the employer must provide detailed documentation. For instance, if the reason behind dismissal is alleged underperformance, the employer must provide a clear history of feedback, evaluations, warnings, and improvement opportunities 
• Employee Rights: Unfair dismissal is a serious violation in the Netherlands and employees have the right to objection, legal counsel, and challenging the termination in court. Trade unions and works councils also play a significant role in collective redundancy situations as they have Collective Labor Agreements (CAOs) with the employers.
• Post-Termination Support: Beyond severance, unemployment benefits and outplacement support are often included in the employee’s exit package.

Managing Workplace Conflicts

Disagreements at work are bound to happen. Workplace conflicts, such as harassment, discrimination, aggression, or inappropriate behaviour may also occur. If you cannot resolve a dispute with your employer or colleague, then it might be necessary to involve an impartial third party to mediate the issue.

Arbowet

The Arbowet or Working Conditions Act obligates companies in the Netherlands to protect their employees from such hardships. This is why many companies have confidants or counsellors (vertrouwenspersoon). These experts are ready to deal with these conflicts in a supportive and helpful manner.

However, if there is no counsellor in the company, then contacting P&O (HR) or the Works Council (OR) is the next step. If you are a vakbond (union) member, you can talk to a representative. An employment lawyer may also be able to help, or you can turn to a government service that provides free legal help, called the Het Juridisch Loket.

More On Transitional and Severance Pay

Dismissed employees in the Netherlands are often entitled to severance pay or transition pay, depending on the details of the contract termination. Some people may use these two terms interchangeably, but it’s good to know that there are differences between them.

Transitional pay

As the name suggests, this compensation acts as a source of income while the worker transitions to a new job. In order to receive transitional pay, you must have worked for the given company for at least two years. 

Other things that may entitle you to transitional pay:

• You had a fixed-term contract which was terminated
• Your contract has been terminated and the UWV or the district court approved it
• Your contract has been terminated because of the employer’s gross misconduct.

On the other hand, you are not entitled to this compensation if:

• The contract was terminated as a result of mutual agreement
• You were dismissed because of gross negligence or serious culpability
• The company is going bankrupt
• You have reached retirement age

The actual amount of money you receive is based on your age, years of service, and gross monthly salary.

Severance Pay

You will most often receive severance pay if the contract has been terminated as a result of mutual agreement. Usually, the amount is higher than in the case of transitional pay because it does not require the involvement of any legal bodies. There’s no fixed amount, but it often includes a settlement for things like bonuses and unused holiday days.

Source: Pexels

Unemployment Benefits

Depending on how long you have worked at your job and the causes for dismissal, you may be entitled to get WW-uitkering or unemployment benefits. However, to get it , you must apply within a specific timeframe at the end of the contract. Sometimes, this is before the final date that’s covered by your salary, so it’s highly advisable to understand the requirements as soon as you can.

Finishing Thoughts on Termination of Employment In The Netherlands

As you can see, job termination in the country isn’t a one way street. Both parties, and often even impartial bodies have to be involved to determine whether the grounds of dismissal are valid. Job stability is a cornerstone of a healthy economy and of a healthy life. :People in the Netherlands take this concept seriously and impose labour laws that protect employees from arbitrary dismissal, encourage fair employer practices, and ensure that every termination follows due process.

Working in such an environment can be a game-changer for most. If you want to take advantage of such comprehensive job security, don’t hesitate to browse Robin’s latest vacancies in the Netherlands. 

Termination of Employment In The Netherlands FAQs

1. Can you terminate an employee for looking for another job?

Generally, no. In the Netherlands, employees have the right to seek other employment without fear of dismissal. Unless it directly interferes with their current job duties (e.g., using company time or confidential information), looking for another job is not a valid reason for termination.

2. Can you get fired for a verbal argument at work?

It depends on the severity and context. A single verbal disagreement is unlikely to be grounds for dismissal. However, if the argument involves threats, discrimination, or repeated disruptive behavior, an employer may have a case—especially if prior warnings were issued.

3. What are valid grounds for dismissal in the Netherlands?

Valid reasons include long-term underperformance, misconduct, redundancy due to business reorganization, or a damaged working relationship. In most cases, employers must go through either the Employee Insurance Agency (UWV) or the subdistrict court to get approval before ending a contract.