Dutch dismissal law is closed by design. An employer cannot simply end an employment contract: it needs one of the grounds the law lists exhaustively, it must follow the route that belongs to that ground, and it has to show that reassignment was considered first. That structure is what gives an employee room to negotiate, and it is what makes a badly prepared dismissal expensive for an employer.
The grounds for dismissal are exhaustive
Article 7:669 of the Dutch Civil Code sets out the grounds, lettered a to i. Each has to be complete in itself and properly substantiated:
- a — business economic reasons. The position lapses because of a reorganisation, a fall in turnover, automation or a closure. This is the redundancy route; see our article on redundancy in the Netherlands.
- b — long-term illness. The employee has been unable to work for more than two years and recovery within 26 weeks is not expected.
- c — frequent absence with unacceptable consequences for the business.
- d — underperformance. The employer must have told the employee in good time, given a real chance to improve and documented that process.
- e — culpable conduct on the employee’s side.
- f — conscientious objection to performing the work, where reassignment is not possible.
- g — a disrupted working relationship that cannot reasonably be expected to continue.
- h — other circumstances that make continuation unreasonable, such as detention or a missing work permit.
- i — the cumulation ground, which allows two incomplete grounds to be added together, at the price of an extra payment of up to half the transition payment.
Whichever ground applies, the employer must also show that there was no suitable alternative position, within a reasonable term and taking retraining into account.
Two routes, and the ground decides which one
For grounds a and b the employer needs prior consent from UWV, the employee insurance agency. UWV assesses the file on paper; the employee is given the opportunity to defend. If consent is granted, the employer terminates with notice.
For grounds c to i the employer applies to the subdistrict court for dissolution of the contract. That is an oral hearing, and the judge can refuse the request, dissolve the contract, or dissolve it while awarding compensation. Choosing the wrong route is not a formality: a request lands in the wrong forum and has to be started again.
Ending it by agreement
In practice most employment contracts end neither at UWV nor in court but by mutual consent, in a settlement agreement. Neither party needs permission for that, and everything is negotiable: the end date, the payment, the notice period, legal costs, outplacement, the reference, and the release of a non-compete clause.
Two safeguards matter. The employee has a reflection period of two weeks under article 7:670b, extended to three weeks if the agreement fails to mention it, in which consent can be withdrawn without giving reasons. And the wording decides whether UWV will grant unemployment benefits: it has to be clear that the employer took the initiative, that the reason is neutral and that there is no urgent cause. Our comparison of the settlement agreement and the UWV route sets out when each is preferable.
Notice period and end date
The statutory notice period under article 7:672 runs from one month for service under five years to four months from fifteen years, unless the contract or a collective agreement provides otherwise. Notice is given against the end of the month. The time a UWV procedure took may be deducted, provided at least one month of notice remains.
What the employee is entitled to
The transition payment of article 7:673 accrues from the first working day at one third of a gross monthly salary per year of service, pro rata for part years. It is owed whenever the employer takes the initiative, regardless of length of service, and it is not owed where the employee resigns without the employer being seriously at fault, or where the contract ends through seriously culpable conduct on the employee’s side. Our article on transition compensation works through the calculation.
On top of that a court can award fair compensation where the employer acted in a seriously culpable way — a fabricated performance file, a dismissal in breach of a prohibition, or pressure that made continuing impossible. There is no formula for it; the amount follows the seriousness of the conduct and the loss suffered.
When dismissal is simply not allowed
Article 7:670 contains prohibitions on termination. The best known covers the first two years of illness, but the list also includes pregnancy and maternity leave, membership of the works council, military service and trade union activity. During those periods notice cannot be given at all, with narrow exceptions such as a closure of the business. A dissolution request can still be made, but only on grounds unconnected to the protected circumstance.
Summary dismissal stands apart
Dismissal with immediate effect — ontslag op staande voet — needs no permission and no notice, but it requires an urgent cause, given without delay and communicated at once. All three requirements have to be met, and courts apply them strictly: an employer that first investigates for a fortnight has usually lost the immediacy. See our article on immediate dismissal.
If the dismissal was not lawful
An employee who disputes a dismissal can ask the subdistrict court to annul the termination and restore the contract, or to award fair compensation instead. The deadlines are short and they are hard: an application must reach the court within two months of the end of the contract, and a claim for the transition payment within three months. Miss them and the claim lapses, however strong it was.
Points for attention
- Is the ground complete on its own, or is the employer relying on a bit of several grounds?
- Is there a documented improvement process, if underperformance is alleged?
- Was reassignment genuinely explored, including at group companies?
- Does a prohibition on termination apply — illness, pregnancy, works council?
- Is the transition payment calculated from the actual start date and the full gross salary?
- Does the settlement agreement protect the entitlement to unemployment benefit?
- Are the two-month and three-month deadlines still running?
Frequently asked questions
Can my employer dismiss me without giving a reason?
No. Dutch law requires one of the grounds listed in article 7:669, substantiated with facts, plus permission from UWV or the subdistrict court. The only exception is a contract ended by mutual consent, which you are free to refuse.
How long does a dismissal procedure take?
A UWV procedure usually runs to a few weeks once the file is complete, after which the notice period still has to be observed. A dissolution hearing before the subdistrict court is generally scheduled within about four to eight weeks. A settlement agreement can be concluded in days.
Do I have to sign a settlement agreement?
Never. Refusing shifts the case to UWV or the court, where the employer carries the burden of proof. That is often precisely why a better offer follows. Have the agreement read before signing rather than after: the two-week reflection period is short.
Can I be dismissed while I am ill?
Not by notice during the first two years of illness, apart from narrow exceptions. Dissolution on a ground unconnected to the illness remains possible, and the protection does not apply where the employee refuses to cooperate with reintegration without good reason.
Speak to a Dutch employment lawyer
Dismissal cases are decided in the first weeks, before anything is signed and while the deadlines are still open. Our employment lawyers in Eindhoven and Amsterdam assess the ground, test the file and negotiate the terms. For the wider framework, see our guide to Dutch employment law.
