Why knowing your termination rights is crucial to your career
Picture this: Monday morning, coffee in hand, and your boss calls you in. Moments later, you are outside again, with a message that hits like a bomb: you have been fired. This is a spectre for many, but for tens of thousands of Dutch workers it is reality. The feeling that the ground is sinking out from under you is completely understandable. Yet you are not alone, as the law provides a solid safety net in the form of rights in case of dismissal.
The basis of Dutch dismissal protection
Dutch dismissal law is not a pile of dusty law books. Rather, think of it as a toolbox you can use to protect yourself. These rights are there for a reason; they are the result of years of effort to strike a fair balance between the employer’s interests and yours. They ensure that an employer cannot simply cast you aside and help you financially bridge the period to a new job.
Knowing your rights is not a luxury but a pure necessity. It helps you keep your cool and make thoughtful choices at a time when emotions often prevail. Understanding what you are entitled to not only gives you peace of mind, but also a much stronger negotiating position. An employer who perceives that you are well-informed will usually proceed more cautiously.
Law in practice: more than just theory
You only see the real value of redundancy rights in practice. Take the example of Mark, a marketing manager who was told after eight years of loyal service that his position was being abolished. His employer initially offered him a meagre severance package. Knowing that he was entitled to a transitional allowance and that his employer had to apply the separation principle correctly, Mark entered the conversation. The result? Not only fair financial compensation, but also an outplacement programme that helped him find a new challenge. Examples like this show how important your rights are in the event of dismissal.
The influence of the labour market
Your redundancy rights become extra relevant in a changing economy. In times of economic headwinds, layoffs often increase. Recent data show that the labour market is constantly changing. For instance, the number of unemployed workers increased by 16,000 in the first quarter of 2024, which may indicate more reorganisations. In such a climate, legal protections, such as the right to transition compensation and procedures against wrongful dismissal, become even more important. Check current figures and labour market via the CBS dashboarddevelopments . Being well informed about your position is crucial to secure your future.
Transition compensation deciphered: what you can really expect
Apart from all the procedures, the transition allowance is one of the most tangible rights in case of dismissal. Think of it as a financial cushion, meant to make the transition to a new job easier. But how exactly is this amount determined? And what does it mean for your wallet? We explain the calculation step by step, without complicated legal language.
The basic principle: the core of the calculation
The basic formula for transition compensation is surprisingly clear: you accrue entitlement over one-third of your gross monthly salary for each full year of service. This entitlement starts from your very first day of employment.
Imagine you earn €3,600 gross per month and have worked for your employer for exactly six years. The calculation is then simple: 6 years x (1/3 of €3,600) = 6 x €1,200 = €7,200.
For the remaining months and days, the compensation is calculated pro rata. In the same example, if you have worked for 6 years and 3 months, the compensation for those extra 3 months is calculated separately. This way, every day worked counts towards a fair final amount.
What exactly is included in ‘monthly salary’?
This is where things get really interesting, as your ‘monthly salary’ is often more than just your basic salary. A broader salary concept is used to calculate the transition compensation. The following components count:
- Your bare gross monthly salary: The fixed salary stated in your contract.
- Holiday allowance: The statutory 8% holiday allowance is a fixed component.
- Fixed end-of-year bonus or 13th month: If you receive this structurally, it counts.
- Structural overtime pay: Do you regularly work overtime and get paid for it? Then this is part of it.
- Shift bonuses: Fixed allowances for working alternating shifts also count.
- Variable wage components: Consider bonuses, profit distributions and commissions you have received in the past three years.
Including all these elements gives a much better picture of your actual income. So it is crucial to check that your employer has included everything correctly in the calculation.
The table below shows how compensation builds up over several years with an example salary.
Calculation of transition compensation per year of service
Overview of severance pay calculation based on years of service and monthly salary
| Years of service | Calculation formula | Example at €3000 monthly salary | Total compensation |
| 1 year | 1 x (1/3 x €3000) | €1000 | €1000 |
| 3 years | 3 x (1/3 x €3000) | €3000 | €3000 |
| 5 years | 5 x (1/3 x €3000) | €5000 | €5000 |
| 10 years | 10 x (1/3 x €3000) | €10.000 | €10.000 |
| 15 years | 15 x (1/3 x €3000) | €15.000 | €15.000 |
As the table shows, compensation accrual is directly linked to your years of service and salary: the longer you are employed, the higher the amount.
Exceptions and the maximum amount
Although the rules are clear, there are exceptions. For example, you are not entitled to a transition allowance if you resign yourself, retire, or in the case of summary dismissal for serious culpability.
In addition, there is a statutory maximum. In the Netherlands, the transition compensation is an essential part of the rights in case of dismissal. For 2025, the maximum compensation is set at €98,000 gross, or a full year’s salary if that amount is higher. This maximum will be adjusted annually. More detailed information on the current regulations can be found in the government’s detailed explanation.
Monitoring and negotiating
Never take your employer’s calculation lightly. A mistake is easily made, for example by a forgotten bonus or an incorrect calculation of overtime pay. Use an online calculation tool and collect your pay slips from past years to make an accurate calculation yourself.
If your calculation differs, it is time for a conversation. The statutory transitional compensation is a minimum. Especially if the dismissal is settled via a settlement agreement, there is often room for negotiation. A strong negotiating position, based on knowledge of your rights, can lead to a significantly better final settlement.
Notice periods and procedures: the rules of the game your employer must follow
Your employer cannot just throw you out on the street overnight. Think of it as a game with clear rules that both parties have to abide by. These rules, enshrined in law, are there to protect you from a hasty or unjustified dismissal. Your rights upon dismissal determine which route your employer should take, and that route depends heavily on your contract and the reason for the dismissal.
The statutory notice period: a buffer for the future
One of the most important ground rules is the notice period. This is the period between when your resignation is announced and your actual last day of work. This period acts as a buffer, giving you time and financial breathing space to find a new job. The length of this period is not arbitrary; it depends on how long you have been working for the employer.
The statutory notice period an employer must observe is structured as follows:
- Less than 5 years of service: 1 month
- Between 5 and 10 years of service: 2 months
- Between 10 and 15 years of service: 3 months
- 15 years or more of service: 4 months
These are the legal minimums. Your employment contract or collective agreement may contain other, often more favourable, terms of notice. An important detail: if a longer notice period is agreed for you, the notice period for your employer must be at least double that.
The route of dismissal: UWV or subdistrict court?
An employer needs a valid reason to dismiss you. Depending on the reason, he must go through a specific procedure: either through the UWV or the subdistrict court. This system ensures that an independent body tests whether the dismissal is justified.
Dismissal route 1: Via the UWV
Does your employer want to dismiss you for economic reasons, such as a reorganisation, or because of long-term disability (longer than two years)? Then he must ask the UWV for permission to do so. The UWV then checks whether the employer has the right arguments and follows the rules. A well-known example is the separation principle in a reorganisation. This principle ensures that redundancies are distributed fairly across different age groups.
Dismissal route 2: Through the subdistrict court
For all other reasons related to your performance or behaviour, going to the subdistrict court is mandatory. Consider situations such as:
- Dysfunction: You are performing below par.
- Culpable act: You have seriously misbehaved.
- Disrupted working relationship: Working together has really become impossible.
In these cases, the employer must have built a strong case to convince the judge. For example, does he claim that you are dysfunctional? Then he must be able to show that he has pointed this out to you and given you a chance to improve, for example through an improvement programme. Without a good file, a judge will not simply grant a dismissal request.
The consequences of procedural errors
What if your employer flouts the rules? If the wrong procedure is followed or the notice period is ignored, the dismissal is irregular. You can then challenge the dismissal in court. This could lead to reinstatement of your job or additional financial compensation on top of the transitional compensation.
So it is crucial that you know these procedures. It gives you the power to check that everything is fair and provides a strong basis for defending your rights in case of dismissal. An employer who ignores the ground rules can cost you dearly.
Collective dismissal: when the whole team goes out of the job
Sometimes a resignation is not personal, but the result of a larger business decision. Think of a reorganisation, a merger or economic hardship. In such cases, not one person, but an entire group of employees has to leave the company. We call this collective dismissal. It may feel like something you have no control over, but it is precisely then that Dutch law offers extra protection. Your existing rights in case of dismissal are supplemented by specific rules that the employer must strictly adhere to.
The collective dismissal process is much more than just sending a pile of dismissal letters. It is a formal procedure that requires the employer to be careful and open. This ensures that the blow to employees lands as gently as possible and the consequences are shared fairly.
When does collective redundancy occur?
Not every round of dismissals involving multiple people leaving falls under these strict rules. The law is very clear on this. In the Netherlands, we officially speak of collective redundancy if an employer plans to lay off at least 20 employees within one working area for business reasons within three months. This number is an important limit that triggers additional duties for the employer.
These duties are contained in a special law: the Collective Redundancy Notification Act (WMCO – Wet Melding Collectief Ontslag). This law obliges an employer to notify redundancy plans to the UWV and the relevant trade unions. The aim is not only to inform, but also to start consultations to discuss the consequences for staff. The employer must also seek advice from the works council.
The social plan: the core of the agreements
One of the main outcomes of consultations with unions and the works council is the social plan. This is a document containing all the agreements on the consequences of the reorganisation. Think of it as a special set of ground rules that applies only to this situation. A good social plan regulates much more than just the financial picture.
You will often find the following sections in a social plan:
- A higher severance pay: A better arrangement than the statutory transitional compensation is often agreed upon. Sometimes an older, more favourable subdistrict court formula is used for this purpose.
- Outplacement counselling: professional help to find a new job, such as job interview training or career coaching.
- Training budget: An amount you can use for retraining or further training to increase your chances on the labour market.
- Criteria for dismissal: The plan clearly states how it will be determined who should leave. Usually this is done through the principle of apportionment, but sometimes additional criteria are agreed.
The social plan provides guidance and security in an uncertain period. It is therefore crucial to read this document carefully so that you know exactly what it means for you personally. If no agreement is reached with the unions, the employer must submit the dismissal requests to the UWV, which will then assess the situation.
Wrongful dismissal: when your employer is at fault
Not every dismissal is handled by the book. Sometimes an employer makes a mistake, knowingly or unknowingly, which violates your rights in the event of dismissal. It is essential to recognise the signs of wrongful dismissal so you know when to take action. A dismissal may feel like the end, but if the rules have not been followed, you often have more options than you think.
The red flags: signs of wrongful dismissal
How do you know if your dismissal is legally shaky? There are several ‘red flags’ that indicate an employer may be overstepping the bounds of the law. If you recognise any of the following situations, it is smart to be alert and seek legal advice.
- No valid reason for dismissal: Your employer must have a legally recognised reason for the dismissal, such as dysfunction or business necessity, and be able to prove it. A vague story is not enough.
- Wrong procedure: The employer skipped the mandatory route through the UWV or the subdistrict court or did not follow the procedure correctly.
- Discrimination: The dismissal seems to be linked to your gender, age, ethnicity, religious beliefs or being pregnant.
- Notice bans ignored: You are fired while sick (within the first 2 years), a member of the works council or during your maternity leave. In principle, this is not allowed.
- Dismissal as revenge: You are given notice of your dismissal shortly after making an official complaint, for example about excessive workload or undesirable behaviour.
If any of these scenarios apply to your situation, you are in a stronger legal position. You can challenge a dismissal that violates the law.
Your options: contest or negotiate?
If you suspect that your dismissal is unlawful, you have several legal tools to address this. However, a lawsuit is not always the best course of action. It can take a long time, cost a lot of money and be emotionally exhausting. The choice depends on what you want to achieve: do you want your job back, higher severance pay or, above all, justice?
The table below compares the most common options to give you a better idea of the possibilities.
Comparison of remedies for wrongful dismissal
Overview of different legal options with pros and cons
| Legal remedy | Lead time | Cost | Success rate | Possible outcome |
| Ground proceedings | 6-12 months | High | Subject to evidence | Job reinstatement or fair compensation |
| Summary proceedings | 2-6 weeks | Average | Depending on urgency | Provisional measure (e.g. continued payment of wages) |
| Mediation | 2-8 weeks | Low to medium | High on good will | Joint solution (e.g. better arrangement) |
| Negotiation | 1-4 weeks | Low | High on a strong case | Settlement agreement with more favourable terms |
Each route has its own dynamics and risks. A quick solution through negotiation can sometimes yield more than a lengthy and uncertain court case.
The reality of litigation
A judge will always scrutinise a dismissal case closely. In a dismissal for dysfunctional reasons, for example, the judge will check whether there has been a serious improvement process. In the case of dismissal for economic reasons, the separation principle will be tested strictly. A strong file is therefore crucial. Judges not only look at the letter of the law, but also weigh up the specific circumstances and the interests of both parties.
Because litigation carries risks, it is often wise to explore the path of negotiation first. With the help of legal counsel, such as a lawyer from Law & More B.V., you can often reach a better dismissal settlement without the stress and costs of going to court. Sometimes a good conversation will yield more than a legal battle.
Practical approach: how to use your rights smartly
Knowing your rights upon dismissal is the first step, but how do you apply that knowledge in practice? The first moments after a dismissal announcement are often chaotic and emotional. This guide will help you take the right steps with a clear head to strengthen your position.
The first reaction: what to do and what not to do
The moment you hear the news is decisive. Your first reaction sets the tone for the whole follow-up process. It is natural to be overwhelmed by emotions, but try to stay calm.
- Don’t say too much right away: Confirm that you have heard the message, but don’t immediately argue or agree with anything. A response like, “I didn’t expect this, I need to let this sink in,” is enough.
- Sign absolutely nothing: Your employer might present you with a settlement agreement right away. Never sign this on the spot. You are legally entitled to at least two weeks’ reflection time to think about it.
- Ask informative questions: Ask clearly about the reason for dismissal and request to receive the proposed settlement in writing. This will give you time to read everything over calmly and seek advice.
Organise your administration
Once you have recovered from the initial shock, it is time to put your administration in order. Good organisation is crucial at this stage. Start collecting all important documents immediately. Think about:
- Your employment contract and any attachments.
- Recent pay slips (at least from the last 12 months).
- Documents about your performance, such as appraisal reports.
- All written communication about the dismissal.
- Any social plan, if applicable.
Store these documents where your employer cannot access them, such as a personal USB stick or your private email. This paperwork is the foundation for any legal move or negotiation.
Dealing with the emotional impact
Dismissal is not just a business deal; it is an event that deeply affects your life. The stress and uncertainty can feel overwhelming. It is important to acknowledge these feelings and deal with them in a healthy way. Talk about it with your partner, friends or family. Don’t hesitate to seek professional help if you find you can’t cope on your own.
By giving your emotions a place, you create the mental calm needed to make wise decisions. A choice you make out of panic or anger is rarely the best one.
Preparing for negotiations
Almost every dismissal ends in a negotiation of terms. The statutory transitional compensation is often the starting point, not the end result. Good preparation for the conversation with your employer is essential.
- Set your goals: what do you want to achieve? Higher compensation, a budget for training, or perhaps a release from work with pay?
- Know your position: Know what your rights are and what a realistic redundancy scheme means in your situation.
- Enlist help: It is wise to enlist the help of a legal specialist. A lawyer from a specialised firm such as Law & More B.V. can conduct the negotiations for you and check whether the proposed agreement is legally correct. This significantly increases your chances of a better outcome and gives you the peace of mind to focus on your future.
From redundancy to new opportunities: your next steps
A resignation often feels like a door closing, but it can just as easily be an opening to a new chapter. This period of change is an ideal time to look ahead and use your experience as a solid foundation for your next career move. The important thing now is to turn what you know about your rights when you resign into concrete, positive actions for the future.
From farewell to job application
Your resignation documents, such as a settlement agreement, are more than just legal paperwork; they tell the official story of your departure. Be prepared for the inevitable question, “Why did you leave your previous employer?” An honest and neutral answer often works best. Think of something like, “My position was made redundant due to a reorganisation.” This shows that the dismissal was not due to your performance, an important signal to a new employer.
In job interviews, put the focus not on the past, but on the future. What have you learned? What skills do you want to develop further? This proactive attitude transforms a dismissal from a negative event into a valuable learning moment.
Financial peace and personal growth
Once your departure is a fact, it is crucial to quickly clarify your financial situation. One of the first and most important steps is to apply for unemployment benefit from the UWV. Do this on time so that you are not unexpectedly left without income. Be aware that political decisions can affect the duration of unemployment benefits. For instance, there are plans to potentially reduce the maximum duration from 24 to 18 months from 2027, which emphasises the importance of a quick reorientation.
Also use this time for self-reflection. It is a unique opportunity to discover what you really value in your work.
- What did you learn? Analyse what went well and what could be better in your previous role.
- Recognise the signs: Were there any omens you could have spotted earlier, such as a changing corporate culture or fewer responsibilities?
- Strengthen your position: When you get your next job, resolve to have your rights and obligations clear straight away and set out agreements clearly.
Checklist for the coming months
To confidently take your next step, a structured approach is helpful. This checklist will help you stay on track in the period ahead and not overlook anything.
| Task | Deadline | Status |
| Settlement agreement legally checked | Within 2-3 days of receipt | ☐ In progress |
| Applying for unemployment benefit at the UWV | Within 1 week of last working day | ☐ To do |
| Updating your CV and LinkedIn profile | Within 2 weeks | ☐ To do |
| Schedule networking calls | Monthly | ☐ To do |
| Orienting towards training, retraining or courses | Within 1 month | ☐ To do |
By following these steps, you will take control of your future. A dismissal is a drastic event, but with the right knowledge and an active attitude, you can turn it into a powerful start of something new. Should you need legal support in this, for example in checking your contract, a specialised firm like Law & More B.V. can assist you.