New employment law: Dismissal law reform

Publication date: 26 March 2015
There will be major changes to employment law in the Netherlands as from 1 July 2015. Russell Advocaten will inform you of these changes by a series of newsletters. This time: Dismissal law reform.

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One dismissal route depending on the reason for dismissal

The current option of the employer to either dismiss an employee via the UWV (Employee Insurance Agency) or via the subdistrict court will be abolished. Depending on the reason for the dismissal there will be one mandatory dismissal route. The employer will need permission from the UWV for dismissal on grounds of economic reasons or long-term incapacity for work. In case a dismissal review committee is included in the applicable CAO, the employer requires permission for the dismissal from this commission, instead of permission from the UWV. A dismissal for personal reasons or on grounds of a disturbed working relationship can only be initiated by a request to set aside filed with the subdistrict court.

Compensation

A new kind of compensation will be introduced: the so-called ‘transition compensation’. With regard to any kind of dismissal on the initiative of the employer, (be it by termination, setting aside or operation of law), the employer is entitled to a transition compensation in the event the employment contract has lasted at least for two years. The amount of the transition compensation depends on the length of service, with a maximum of EUR 75,000. However, the transition compensation will be lower than the current subdistrict court formula. In the event of a dismissal on grounds of serious imputable acts or omissions of the employer, the court may award the employee a fair compensation in addition.

Reflection period of the employee

If the employee agrees to the termination of the employment contract by signing a termination agreement or by giving his consent in writing, the employee will be granted a period of 14 days to think the matter over. Within this period, the employee is entitled to withdraw in writing his consent to the dismissal without giving any reasons. The employer must notify the employee of this reflection period in writing within two days after the termination agreement has been signed or after the employee has agreed to the dismissal. If this does not happen, the reflection period will be extended to three weeks.

Training obligations

It will be laid down by law that the employer is obliged to enable the employee to attend the training necessary to perform his duties. In addition, the employer must enable the employee, at least to the extent that can reasonably be expected from him, to attend the training necessary for the continuation of the employment contract if the employee’s job will be terminated or the employee will no longer be able to perform his or her duties. If the employer does not meet these training obligations, he or she will not be able to dismiss the employee on grounds of unsatisfactory performance should this be a consequence of insufficient care for the employee’s training. Whether the employer has met the training obligations is also important with respect to the question whether reappointment of the employee will be possible or not.

Appeal and cassation

In contrast to the current situation, it will become possible to lodge an appeal or an appeal in cassation against a court decision on a request to set aside the contract. If an appeal or an appeal in cassation has been lodged, the execution of the decision on the request to set aside will not be suspended. That means, for instance, that an employee will remain in service if the request to set aside the contract has been rejected.

Action

  • Make sure you have checked which body you have to address before you start dismissal proceedings.
  • Make sure you have a sound model termination agreement.

More information

Would you like to know more about the new employment laws? Or do you have any other questions regarding the right way to hire and dismiss personnel? Please contact:
Jan Dop, LL.M. (jan.dop@russell.nl).

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