By Godelijn Boonman

Employment law in the Netherlands offers employees a number of protections against dismissals. Unfortunately, many internationals are unaware of their rights.

Permission

To start, employees with a permanent contract are given very strong protections by the law. An employee with a permanent contract cannot be dismissed without permission from either a judge or the Uitvoeringsinstituut Werknemersverzekeringen (UWV or Employees Insurance Agency.)

Furthermore it is not easy to convince a judge or the UWV to give permission. An employer needs to have reasonable grounds to dismiss someone and also needs to prove that they have tried to move the employee in another role in the company, possibly following retraining.

Fixed term contracts

Permanent or fixed term contracts must abide by the so-called 3/2/6 rule, unless there is a different collective bargaining agreement in place. Since this rule came into effect on 1 July 2015, employers can offer no more than three consecutive contracts, the total duration of these contracts cannot last for more than two years and any break in between the contracts of less than six months is considered continual employment. Any contract exceeding these limits automatically becomes a permanent one.

For example, these rules allow three consecutive fixed-term contracts of eight months each, or two one-year contracts. A period of over six months, e.g. six months and one day, is needed to “break the chain” and allow the parties to start afresh. .

Another change is that the employer must (though there are exceptions) inform a fixed-term employee in writing no less than one month before the end date of the contract about whether the contract is to be extended and, if so, under which conditions. The penalty for failure to give timely notice is monetary compensation equal to the salary for the unobserved period.

Eight grounds for dismissal

There are eight reasonable grounds that an employer can use to justify dismissing an employee on a permanent contract. They are:
1. headcount reduction for business reasons (redundancy)
2. long-term (more than two years disability)
3. frequent and disruptive absence relating to sickness
4. incapacity to perform the contractual work other than for a medical reason
5. serious misbehaviour
6. refusal to perform contractual duties for reasons of conscience (conscientious objections)
7. working relationship that has broken down, provided the impairment is so serious that the employer cannot reasonably be required to continue the relationship
8. other reasons that are of such a nature that it cannot reasonably be expected that the employer should continue the employment relationship.

This list of grounds for termination is exhaustive and the grounds cannot be combined. A judge who decides to terminate an employment contract must select one (and only one) of the eight possible grounds for termination.

Incapacity

The fourth reason for dismissal, incapacity to perform contractual work other than for a medical reason, can only be asserted if (i) the employer has informed the employee of the performance issue in good time; (ii) the employer has taken sufficient steps to enable the employee to improve the performance; and (iii) the underperformance has not been caused by insufficient efforts by the employer to train the employee or by poor working conditions.

Wrongful dismissal?

An employee who has been dismissed without consent in the absence of permission or in breach of a dismissal prohibition may ask the court to annul the dismissal or to award compensation. An employee who has been dismissed pursuant to a dismissal permit may apply to the court for reinstatement or compensation. It is also possible to appeal a court order.

Compensation

Under the new rules, every termination (other than following retirement or for serious cause) – including termination as a result of non-extension of a fixed-term contract that has lasted for two years or longer – will give rise to an obligation to take the applicable notice period into account and to pay the departing employee a transitievergoeding (transition compensation.)

The compensation is equal to 1/6 of the last-earned average month’s pay for the first twenty half-years of service and 1/4 of the last-earned average month’s pay for each additional half-year of service. However, employees aged 50 or above with no less than ten years of service are, until 2020, entitled to half a month’s salary for each half-year of service beyond the age of 50.

Certain expenses that the employer has paid during the final five years of employment with a view to increasing the employee’s employability may be deducted from the transition compensation. Only in extreme cases will the employee be able to claim an additional amount. The government has stressed, and it is widely accepted, that such additional awards should be exceptionally rare.

Negotiation

If an employer does not have a good case  for dismissal, then an employee can of course negotiate a higher transitional compensation. Employees who are facing a wrongful dismissal should take care to exercise this right.

Unemployment

An employee who loses their job is normally eligible for unemployment benefits, which are paid by UWV. The benefits equal 75% of last-earned salary for the first two months and 70% thereafter, in both cases calculated as a percentage of no more than the maximum base. The maximum duration of the benefits varies from three to 24 months, depending on how long the employee has been insured.

Godelijn Boonman is lawyer at GMW advocaten in The Hague.
e-mail: g.boonman@gmw.nl
tel.: +31 70 3615048
www.legalexpatdesk.nl

 

Recently Posted on XPat.nl

If you’re an expat living and looking for work in the Netherlands then there are some vital differences you should know about in regards to your job applications. In the Netherlands, as with most places in Europe, the norm is a CV rather than the resume which is commonly used in the United States amongst … Continue reading "The Difference Between a Resume and a CV"
Rising mortgage interest rates can have a significant impact on homebuyers and homeowners. The average interest rate for a fixed-rate mortgage in the Netherlands is currently around 4%. As interest rates increase, the cost of borrowing money to purchase or refinance a home also increases. This can make it more difficult for potential homebuyers to … Continue reading "Mortgage Interest Rates in the Netherlands in 2024"
It is that time of year again; the new and annually-updated version of The Holland Handbook is here and ready to be enjoyed! Not only that, but this is the 24th edition! More than twenty years ago, a modest group of three people sat around a table to discuss the possibility of creating a handbook … Continue reading "The Holland Handbook 2024"
Taxes are always complicated. If you have moved to the Netherlands from another country, they can be especially confusing! Many expats carry out business, and therefore earn an income, internationally. This makes what they get taxed on, and by whom, a complex matter. To figure out your own personal tax liability, your residency status and … Continue reading "Dutch Taxes"
The 30%-ruling is a tax advantage, created for employees who are posted or recruited from abroad, to work in the Netherlands. The purpose of this advantage is to cover all the various costs they incur, as a result of moving their lives oversees to. This can be a real blessing to expats! In order to … Continue reading "Dutch 30%-ruling Tax Facility"
Following the legendary previous 8 editions of The UnDutchables, the 9th edition of this all time best seller (more than 300,000 copies sold since 1999) is now available in the Netherlands. The UnDutchables takes an in-depth humorous look at Dutch life, quirks and character. With subjects varying from coffee drinking habits to child rearing, from … Continue reading "The UnDutchables 9.0"

Gift giving in the Netherlands-all ...

If you feel like skipping your birthday, you may be in for a challenge when ...

Tips and tricks for Daily Life in t ...

With the Netherlands being a very rainy country, you will automatically have the title of ...

10 things you will find in every Du ...

The Dutch are very fond of houseplants, the more the merrier! You will find the ...

Your guide to Indoor Plants in The ...

Gardening has become a popular hobby in the Netherlands. It's not surprising, considering how ...

What are the Benefits of Having Sim ...

When you have just moved to the Netherlands, you will have to take care of ...

Economical, Not Stingy

Most of the work I do consists of giving 1 or 2-day workshops and ... And to ‘ease’ the delegates into to the subject of culture, I start talking about ...

Getting Connected in the Netherland ...

There are several criteria that are important to consider when choosing a mobile phone service ...

The Media in the Netherlands

As an expat, you have a wide range of media outlets on offer to you ...

Dutch Gardens and Curtains

There are some specific and quintessential Dutch traditions, surrounding gardens and curtains in the Netherlands ...

Pets in the Netherlands

The Dutch truly love their furry friends, and have a unique way of treating them ...