NETHERLANDS Law and Practice Contributed by: Friederike Henke, Ingrid Cools, Philip ter Burg, IJsbrand Uljée, Suzan van de Kam and Epke Spijkerman, BUREN
Unlike employers, employees do not require a permit from the UWV nor have to go to court to terminate their employment contract. The statutory notice peri - od for employees is one month. The statutory notice period for employers is between one and four months, depending on the duration of the employment rela - tionship. Deviating contractual notice is possible to some extent. Several dismissal prohibitions apply. For example, sick employees are protected against termination of employment during the first two years of their sick - ness and also pregnant employees benefit from dis - missal protection. Both fixed-term contracts and indefinite contracts can be terminated by mutual consent between the employer and the employee. Employers usually offer financial compensation, based on (at least) the “tran - sition payment” (see below), and it is common to confirm the termination in a settlement agreement, by which the parties grant each other full and final discharge. Indefinite contracts and fixed-term contracts longer than six months may include a probationary period during which each party may terminate the employ - ment contract with immediate effect, without the prior permission of the UWV or the court. Employment contracts may be terminated with imme - diate effect and without prior permission from the UWV or the court if there is an “urgent cause” to do so. The DCC provides a non-exhaustive list of acts that may qualify as an “urgent cause”, such as fraud and theft. Employers are required to make a “transition pay - ment” to employees if one of the following applies: • the employment contract is terminated by the employer by giving prior notice of termination; • the court terminates the employment contract at the employer’s request; or • the employer decides not to renew the employ - ment contract after the expiration of the agreed fixed term.
Transition payments are equal to one third of a monthly gross salary for every full year of employment, regard - less of the employee’s age or years of service and cal - culated pro rata, depending on the exact duration of employment. The payment never exceeds EUR98,000 (as of 2025), or one annual salary for employees earn - ing more than EUR98,000. Only employees who are seriously culpable for termination are not entitled to a transition payment. If the court rules that an employer has demonstrated serious culpable behaviour towards an employee the court can grant the employee addi - tional severance. Employers who intend to dismiss at least 20 employ - ees within a period of three months (in one region) are subject to the Collective Redundancy (Notification) Act. Under that legislation, employers must notify the UWV and the relevant trade unions of the intended dismissals, and must first discuss the proposed deci - sion and its social consequences with these trade unions. 4.5 Employee Representations Under the Dutch Works Council Act (WCA), companies employing at least 50 persons must establish a works council for the purpose of consultation with and repre - sentation of the employees. The employees elect the members of the works council directly from amongst themselves. The number of members depends on the number of employees within the company, and varies from a minimum of three to a maximum of 25. The WCA provides a number of rights for the works council, including the right to advise on certain matters and the right of approval. Companies must request the prior advice of the works council on certain deci - sions (and their implementation) about significant business matters, such as the transfer of control over the company or any part thereof, the establishment, takeover or disposal of control over another company, or the termination of operations or a substantial part thereof. In addition, companies must request the prior approval of the works council in respect of certain decisions concerning the introduction, modification or repeal of “social” regulations within the enterprise, such as regulations on: • pension schemes;
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