Summary dismissal for poor performance: unlawful and costly

Poor performance is not an urgent cause for summary dismissal under Dutch employment law. An employer who is dissatisfied with an employee’s performance must first offer a genuine opportunity to improve; reaching straight for summary dismissal (ontslag op staande voet) is unlawful. A ruling of the Limburg District Court of 11 June 2026 (ECLI:NL:RBLIM:2026:5188) shows what that mistake costs: three separate awards, the largest a fair compensation of €23,275 gross.

What happened in this case?

The employee had worked as a demolition worker for a construction company since 4 November 2024, and his fixed-term contract was extended for another year on 4 November 2025. He was in financial difficulty, had told his employer and had asked for a loan or an advance on his wages, which was refused.

On 12 January 2026, the employer summarily dismissed him. The dismissal letter referred to complaints about his pace of work, time registration, attitude and motivation, and to a lack of improvement despite earlier warnings. The employee disputed this and stated that he had never received a formal warning or a concrete improvement plan.

Why does poor performance not justify summary dismissal?

Because underperformance is not, in principle, an urgent cause. Under Article 7:677 of the Dutch Civil Code (BW) an employer may terminate with immediate effect only for an urgent cause, which Article 7:678 BW defines as conduct that makes it unreasonable to expect the employer to continue the employment.

The subdistrict court (kantonrechter) stressed that an employer who wants to dismiss for poor performance must first offer a genuine and realistic opportunity to improve, and build a dismissal file that shows it did so (Article 7:669(3)(d) BW). That means a concrete improvement plan, interim evaluation, and clarity about the consequences. None of this had been shown, and the allegations in the letter were vague.

The contract had also been extended for a year about ten weeks before the dismissal, which did not fit the picture of a structurally underperforming employee. The court concluded that the summary dismissal was not lawful.

What did the unlawful dismissal cost the employer?

The employee accepted the end of his employment rather than seeking annulment, and claimed compensation instead. The subdistrict court awarded three separate amounts.

• Fixed statutory damages under Article 7:672 BW: the wages over the notice period that would have applied to a regular termination, partly extended by a collective labour agreement rule on terminations at the end of a calendar week. This came to €4,260.84 gross.
• The statutory transition payment (transitievergoeding) of €1,662.40 gross. Since no urgent cause existed, there was no basis to deny it for seriously culpable conduct by the employee.
• A fair compensation (billijke vergoeding) under Article 7:681 BW of €23,275.32 gross, equal to six months’ salary including average overtime and holiday allowance.

In setting the fair compensation, the court weighed that the employee had to find new work without any transition period, had only found temp agency work after dozens of applications, and faced a pressing financial situation the employer knew about. It also weighed that the employer had deliberately avoided a proper improvement process.

What should you check as an employer?

Follow the regular route for underperformance; the improvement process costs far less than six months’ salary in fair compensation.

• Record the underperformance concretely and in writing, with dates and examples.
• Offer a written improvement plan with clear goals, a realistic period and interim evaluations.
• State in writing what happens if improvement does not follow.
• Do not extend a contract and then dismiss for poor performance shortly after.
• Terminate only through the subdistrict court or by mutual consent, never by summary dismissal for performance alone.

What should you check as an employee?

A summary dismissal for poor performance can be challenged, but strict deadlines apply under Article 7:686a(4) BW.

• Check whether you ever received a formal warning or a written improvement plan.
• Decide whether you want to return to work (annulment) or accept the end and claim compensation.
• File a request to annul the dismissal or for fair compensation with the subdistrict court within two months after the employment ended.
• Claim the transition payment within three months after the employment ended.
• Keep evidence of job applications and loss of income, as the court uses this to set fair compensation.

What can we do for you with a summary dismissal?

Our dismissal lawyers act for both employers and employees.

• We assess whether a summary dismissal can stand.
• We calculate the fixed damages, transition payment and a realistic fair compensation.
• We file the request with the subdistrict court within the two-month deadline.
• For employers, we set up an improvement plan and dismissal file that meet Article 7:669(3)(d) BW.
• We negotiate a settlement agreement (vaststellingsovereenkomst) where that is the better route.

Summary

• Poor performance is not an urgent cause for summary dismissal under Articles 7:677 and 7:678 BW.
• The employer must first offer a genuine opportunity to improve and document it.
• In this Limburg case the employer paid fixed damages, the transition payment and €23,275 fair compensation.
• An employee who accepts the dismissal can still claim compensation, within two months for fair compensation and three months for the transition payment.

Frequently asked questions