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If you wish to terminate an employment agreement with one of your employees, what are your options?

If the employment agreement does not end automatically in the short term, you will, simply put, have four options:

Option 1
You can offer the employee a settlement agreement, including the conditions for termination of the employment agreement. The employee will not be entitled to a transition payment in the event of termination of an employment agreement by mutual consent. The parties are free to determine the amount of the severance payment and may derogate from the transition payment. Much more than under the old law, the outcome of negotiations is determined by how strong a case the employer has. Effective negotiations are essential in this dismissal procedure. In this respect, the employer should also consider the employee’s two (or three)-week reflection period once he has consented to the settlement agreement. During that reflection period, the employee may reconsider the settlement agreement entered into without stating reasons.

Option 2
You can give notice of termination of the employment agreement with the employee without seeking the consent of UWV WERKbedrijf. For notice of termination of the employment agreement may also be valid if the employee consents to termination in writing. In the event of termination by agreement, the employee will be entitled to a transition payment. Agreement to termination will not lead to imputable unemployment of the employee. In other words: the employee will continue to be entitled to an unemployment benefit. In the event of termination by agreement, too, the employee will have a two (or three)-week period within which he may reconsider his agreement.

Option 3
For dismissal related to economic conditions or dismissal after long-term disability, you may file an application for dismissal with UWV WERKbedrijf. After obtaining consent from UWV WERKbedrijf, you may terminate the employment agreement subject to the applicable notice period. The processing time of the procedure before UWV WERKbedrijf may be deducted from the notice period. However, a notice period of at least one month must always remain. In the event of termination with the prior consent of UWV WERKbedrijf, the employee will be entitled to a transition payment.

Option 4
For proposed dismissal on account of unsatisfactory performance, imputable acts or omissions on the part of the employee, dismissal for other reasons found in the person of the employee, as well as dismissal on account of a damaged employment relationship, you may address the subdistrict court. If the subdistrict court awards dissolution of the employment agreement, it will take into account the notice period. The notice period will be reduced by the procedure before the subdistrict court, provided that at least one month remains. In the event of dissolution of the employment agreement, the employee will be entitled to a transition payment. This will be different if the employment agreement is dissolved due to seriously imputable acts or omissions on the part of the employee. In addition to the transition payment, the subdistrict court may, in exceptional situations, award the employee a fair compensation if the employer can be reproached with seriously imputable acts or omissions.

Under certain circumstances, dismissal with immediate effect (for example in the event of theft) or dismissal during a probationary period may be an option.

The choice for a specific dismissal procedure will depend on your wishes as to the speediness of the procedure, the associated costs, risks (such as a prohibition on dismissal in the event of sickness), publicity, etc.

HVG Law has wide experience in this field and has added value for numerous clients. We will be happy to share our best-practice approach with you.



Joost van Ladesteijn
Tel.: +31 88 407 0240