Good staffing is an important ingredient for a successful business. Once employed, an employee may turn out not to be a good match for your organisation, however. When an employer wants to say goodbye to an employee in this situation there are several things that can be done. The starting point of Dutch dismissal law is a closed system in which there must be a ground for dismissal that is listed in the law.* Which authority is competent depends on the ground for dismissal in question. The Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV) is competent if an employee has been sick for a long time or if dismissal is effected on economic grounds. In the event of any other grounds for dismissal, such as inadequate performance, a rescission application must be filed with the subdistrict court.
In principle, it is not possible to terminate an employment contract without the intervention of the court or the UWV – the main exceptions to this being a probationary period dismissal, the expiry of a temporary employment contract and summary dismissal. In practice, employers and employees often choose to conclude a settlement agreement in order to avoid going to court or the UWV.
*Note: as of 1 January 2020, the law on dismissal will change with the introduction of the Balanced Labour Market Act (Wet arbeidsmarkt in balans). Under current law, a ground for dismissal must be ‘sufficient’; under future law, it will be possible to combine different grounds for dismissal, for example, inadequate performance and a damaged employment relationship. It must be a combination of two grounds for dismissal that can be settled by one and the same competent body.