Working in the Netherlands - End of Employment

An employment contract can be terminated in various ways: by expiry of the agreed term (temporary contract), the death of the employee, notice by the employer or employee, termination by mutual agreement, or setting aside of the contract by the courts. The employer and employee may give notice only with effect from the end of a month. A different date may be agreed for this purpose in a collective agreement or employment contract.

Permanent Contract

Permanent contracts may be terminated by either the employer or employee. To that end, both must observe a period of notice. In addition, the employer requires the consent of the CWI (usually known as a dismissal permit). In certain circumstances, the employer may not terminate the contract.

Temporary Contract

Temporary contracts are automatically terminated at the end of the agreed period. They may be terminated early only if this has been agreed in writing. In order to terminate the contract, both the employer and employee must observe a period of notice.

Employer

The period of notice to be observed by the employer depends on the length of service. The following statutory periods of notice apply to the employer:

• if the employee has been in service for less than five years: one month
• if the employee has been in service for between five and 10 years: two months
• if the employee has been in service for between 10 and 15 years: three months
• if the employee has been in service for 15 years or more: four months

The statutory periods of notice for the employer may be shortened only under a collective agreement. Extension of the period is possible in the employment contract.

Employee

The statutory period of notice for the employee is one month. This may be altered in writing. In other words, a longer period of notice may be agreed for the employee, up to a maximum of six months. In that case, however, the period of notice for the employer must be double that of the notice for the employee. For example, if the period of notice for the employee is three months, the period of notice for the employer will be six months. This double period of notice can be shortened only under the collective agreement. However, this is conditional on the period of notice for the employer not being shorter than for the employee.

During the trial period, both parties may terminate the contract with immediate effect without observing a period of notice. The same applies if there is an urgent reason for summary dismissal. This may be the case, for example, if the employee is guilty of embezzlement. Any employer wishing to terminate a temporary or permanent contract must obtain the consent of the CWI. This is still (often) referred to as a 'dismissal permit'. The employer must apply for this in writing.

Application

The employer must give the reasons for termination of employment in the application for a dismissal permit. Generally speaking, there are two main reasons for filing such an application:

reasons of an economic nature: too little work, merger, closure or reorganisation;
other reasons: inadequate performance, protracted sickness (longer than two years and no prospect of recovery within six months), frequent sick leave or persistent disruption of the working relationship.

If the employer provides proper reasons for the dismissal application, this will speed up the procedure. If the information is not sufficient to be able to assess the application, the employer will be given eight days in which to provide the additional information.

Further procedure

Once the CWI has received the application, the employee will be given a copy. The employee then has two weeks in which to submit counter arguments. In due course, the CWI will make a decision after obtaining advice from various parties. The employer may give notice of dismissal to the employee only when he has obtained the licence. He must then still observe the period of notice. Owing to the length of the dismissal procedure, the period of notice may be shortened by one month. However, there must still be a minimum period of notice of one month.

Cases in which no Dismissal Permit is Required

Employers can terminate an employment contract without the consent of the CWI in the following three cases:
during the trial period;
in the case of summary dismissal for good cause;
in the case of bankruptcy of the employer (the employment contract is then terminated by the trustee in bankruptcy, not the employer).

Source: European Union
© European Communities, 1995-2006
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