Poor performance dismissal: 7 steps for expats and employers

If employers want to terminate the employment of an employee for poor performance, they need to take a number of steps before they are allowed to do this. Which actions do they have to take? What issues should expats take into account?

If you are an expat in the Netherlands facing possible dismissal for poor performance, understanding the legal process can help you navigate this challenging experience. Dutch law requires employers to follow a structured process before terminating an employee for underperformance. The goal is to provide the employee with a genuine opportunity to improve. Employers cannot immediately end your contract without first allowing you to address performance concerns. This article covers what you need to know about your rights, the dismissal process and how it may impact your residency status.

The dismissal process for poor performance

When an employer is considering dismissal due to poor performance, there are several steps that must be taken to justify such a decision:

1.    Initial warning and feedback

The process starts with your employer addressing specific performance concerns, both verbally and in writing. This feedback should clearly outline areas where improvement is needed. The aim is to be constructive, giving you a clear understanding of expectations and avoiding any surprises later on.

2.    Review of performance issues and support

Before proceeding with dismissal, the employer must confirm that there is a genuine performance issue based on up-to-date job requirements. They must also assess whether inadequate training or poor working conditions are contributing factors. If so, they should provide support, such as additional training or adjustments. If health issues or a disability affect your performance, Dutch law requires accommodations to help you fulfil your role.

3.    Create a Performance Improvement plan (PIP)

If the performance issues continue, the next step is a structured PIP. This plan should clearly outline:

• Goals: Specific improvements required with examples.
• Timeline: A reasonable timeframe to achieve these goals. This might be several months and is among others dependant on the length of the employment.
• Support: Any training, mentoring or resources that will be provided.
• Consequences: Clear consequences if targets are not met.

During the PIP period, your employer should regularly evaluate your progress. Feedback should be documented. If necessary, adjustments should be made to give you the best chance of success.

4.    Formal warning

If progress remains insufficient, the employer may issue a formal written warning. This can be a final step before dismissal and should clearly outline the consequences if performance does not improve. It serves as a last opportunity to meet the required standards.

5.    Final performance review

At the end of the PIP period, a final review meeting is held to assess whether the required improvements have been achieved. At this meeting, the employer will assess the overall progress and determine whether performance is now at an acceptable level. If performance has not reached the required level, the employer may consider dismissal.

6.    Considering alternative positions

Before proceeding with dismissal, the employer must check whether there are alternative roles within the organisation that match your skills and qualifications. If there are vacancies and you are suitable for one of them, with or without additional training, the employer is legally obliged to consider transferring you to such a position.

7.    Termination through subdistrict court or settlement agreement

If performance remains an issue and no suitable positions are available, the employer may seek termination through the subdistrict court. The court will review whether the employer followed the proper procedures and provided sufficient support. If the court is satisfied, it may approve the dismissal.

Alternatively, many employers and employees opt to resolve the matter with a settlement agreement (vaststellingsovereenkomst). Here are a few elements to look out for in a settlement agreement:

• The agreement should confirm that dismissal is initiated by the employer without fault on the employee’s part, ensuring eligibility for unemployment benefits (WW).
• When setting the dismissal date, you should take into account the statutory notice period or a longer notice period, if agreed in the employment contract. The statutory notice period is determined by the length of the employee’s tenure:
  • Less than 5 years: one month’s notice
  • 5 years or more, but less than 10 years: two months’ notice
  • 10 years or more, but less than 15 years: three months’ notice
  • 15 years or more: four months’ notice
• Severance pay should at least match the statutory transition compensation, which is one-third of the monthly salary per year of service.
• Employers often cover legal costs for reviewing the settlement agreement, allowing employees to seek advice at no extra cost. At Russell Advocaten we can review your settlement agreement to ensure you secure the best possible outcome.

Impact on residency status

When expats move to the Netherlands for work, their residence permit is usually tied to their job and employer. If you are dismissed for poor performance, this can directly impact your residency status. After dismissal, you usually have three months to find a new job while your permit remains valid. However, if you do not secure a new position within this period — or if your permit expires sooner — the Immigration and Naturalisation Service (IND) may revoke your permit. To stay in the Netherlands, it’s important to quickly find a new employer who is willing to act as your sponsor and complete the necessary procedures with the IND.

Employment and dismissal lawyer

If you are offered a settlement agreement, it is advisable to seek legal advice to protect your interests. Especially if your residence permit is tied to a specific job and employer. If you are concerned about your residency status following a dismissal, we can assist you in navigating the requirements to maintain your right to stay in the Netherlands.