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Netherlands
 


Source and scope of regulations - 2019    

References
  • Civil Code [CC], Book 7, title 10 1822, as subsequently amended and updated until July 1st, 2017
    (Book 7 Particular agreements,Title 7.10 Employment agreement)
    Date: 01 Jul 2017; view website »
  • Dismissal Regulations (DR)
    Date: 01 Jul 2015; view website » (view in NATLEX »)
  • Collective Redundancy Notification Act [CRNA], 24 March 1976, as subsequently amended in July 2015
    (Wet melding collectief ontslag - available only in Dutch)
    Date: 01 Jul 2015; view website »
  • Equal Treatment Act, 1994 as last amended in 2015
    (Algemene Wet Gelijke Behandeling)
    Date: 01 Jul 2015; view website »
Scope
Size of enterprises excluded (≤): none
Workers' categories excluded: none

Types of employment contracts - 2019    

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Maximum probationary (trial) period: 2 month(s)

Remarks:
  • Art. 7:652 (3), (4) and (5) CC.
    Probationary period shall be, as a maximum, 2 months when the contract is of indefinite duration or concluded for more than 2 years, and 1 month if the employment contract is concluded for less than 2 years but more than 6 months. If the contract is concluded for less than 6 months no probationary period is possible.

Fixed term contract (FTC):
  • FTC regulated: Yes
    Remarks:
    • Art. 7:668, Art. 7:668a and Art. 7:667 CC.
  • Valid reasons for FTC use: no limitation
  • Maximum number of successive FTCs: 3
    Remarks:
    • Maximum 3 successive contracts concluded at intervals of less than 6 months: Art. 7:668a(1)(b) CC. (3 months, if agreed by collective agreement, for working activities which cannot be performed by the same employee for more than 9 consecutive months).

      For persons, who have reached the legal retirement age, up to 6 consecutive FTCs are permissible.

      This limitation does not apply to employment contracts concluded with teachers of vocational guidance courses, or concluded with persons under the age of 18, who do not work more than 12 hours per week.
  • Maximum cumulative duration of successive FTCs: 24 month(s)
    Remarks:
    • Applicable to successive contracts concluded at intervals of less than 6 months: Art. 7:668a 1) CC. (3 months, if agreed by collective agreement, for working activities which cannot be performed by the same employee for more than 9 consecutive months).

      For persons, who have reached the legal retirement age, up to 48 months of consecutive FTCs are permissible.

      This limitation does not apply to employment contracts concluded with teachers of vocational guidance courses, or concluded with persons under the age of 18, who do not work more than 12 hours per week.
  • % of workforce under FTC: 20.6 %
    Remarks:
    • Source: Eurostat, as of second trimester 2016.
      The figure refers to the percentage of employee with a contract of limited duration (= temporary job) of total number of employee aged 15-74 years.
      Eurostat data are based on the following definition:
      "A job may be considered temporary if employer and employee agree that its end is determined by objective conditions such as a specific date, the completion of a task or the return of another employee who has been temporarily replaced (usually stated in a work contract of limited duration). Typical cases are: (a) persons with seasonal employment; (b) persons engaged by an agency or employment exchange and hired to a third party to perform a specific task (unless there is a written work contract of unlimited duration); (c) persons with specific training contracts."

Notes / Remarks
In the Netherlands, as part of anti crisis measures, a new Act, which came into force in July 2010, temporarily extended the possibility to conclude fixed-term contracts with young workers up to 27 years The Act allowed for concluding a total of four, rather than three successive fixed-term employment contracts with regard to this group and for maximum duration of four years rather than three. The Act expired in January 2012. As a result, those specific rules for young workers are no longer applicable.

Substantive requirements for dismissals (justified and prohibited grounds) - 2019    

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Obligation to provide reasons to the employee: Yes
Remarks:
  • Art. 7:676 (2), 7:671a (6) CC.


Valid grounds (justified dismissal): any fair reasons
Remarks:
  • Under Dutch law, t4 categories of dismissal are established:
    1) Termination via a prior permit from the Employment Insurance Agency UWV WERKbedrijf (former CWI) or a tripartite committee established by collective agreement. (for economic redundancy reasons or based on long term invalidity/sickness of an employee)
    2) Judicial rescission of the contract for other “reasonable grounds”, related to the employee’s conduct or capacity.
    3) Termination for “urgent causes”.
    4) Termination by mutual consent.

    1) Dismissal via prior authorization from the UWV WERKbedrijf, Art. 7:671a (1) CC: the UWV will grant the permit if it considers the dismissal to be based on one of the “reasonable grounds” listed in Art. 7:669 (3) (a) or (b) CC, i.e. a special economic condition of the enterprise, which requires the termination of employees, based on a prognosis of the economic development of the enterprise for at least the next 26 weeks; or a repeated or ongoing absence of an employee from work due to a sickness (which must last for at least 2 years, with breaks of at most one month at a time, see Art. 7:670 1) a) CC).
    Next to the UWV, the decision on the authorization of collective dismissals based on economic reasons can also be referred to a special committee, which has been established by a tripartite collective agreement, between the employer and worker representatives, approved by the competent administrative authority, Art. 7:671a (2) CC.
    Furthermore, the DR lists several special circumstances under which an economic dismissal cannot be considered reasonable, see Art. 2 to 8 DR, e.g. if the employer outsources the work of the dismissed employees to external contractors, self-employed persons or person employed under FTCs.
    A refusal to grant authorization for the termination by both the UWV or the tripartite committee can be appealed to the district court (Cantonal Court), Art. 7:671b (1) (b) CC.

    2) Judicial rescission: " The employer can request the validation of a termination of an employee at the district court (Cantonal court) based on any of the “reasonable grounds” listed in Art. 7:669 (3) (c) – (h) CC (see Art. 7:671b (1) (a)). These are the worker's inability to perform his or her job, in case the employer has given the employee the opportunity to improve his or her work capacity; a serious refusal to follow instructions of the employer; any other serious misconduct of the employee OR any other comparable circumstances.(More detailed regulations on the determination if a specific ground based on which an employee was terminated was “reasonable” are contained in Art. 2-8 of the DR)

    3) The employer can at any time declare a summary dismissal. For a summary dismissal, important reasons are required. Such important reasons are those circumstances that warrant a termination of the employment with immediate effect for an "urgent cause”, Art. 7:677 CC. A non-exhaustive list of acts which amount to urgent cause is provided in Art. 7:678 CC. Such acts relate to the worker's conduct, i.e. acts of fraud or other grave misconduct.

    4) A termination of an employee based on his or her written consent is always possible, however the employee is granted the right to withdraw any given consent within 14 days, Art. 7:670a (2) and (5), 7:671 (2) CC.


Prohibited grounds: marital status; pregnancy; maternity leave; filing a complaint against the employer; temporary work injury or illness; race; sex; sexual orientation; religion; political opinion; nationality/national origin; age; trade union membership and activities; disabilities; performing military or civil service; whistle blowing
Remarks:
  • Race, sex; religion (..) are not listed as prohibited grounds for dismissal as such, but as invalid grounds for discrimination with regards to termination of employment:
    - Equal Treatment Act (1994, as amended in 2015): Art. 1 and 5 1) f;
    - Equal Treatment (Disability and chronic illness) Act (2003), Art. 1 and 4 b).
    - Art. 7:646 CC on sexual discrimination with respect to employment (incl. pregnancy, maternity, childbirth);
    - Equal Treatment in Employment (Age Discrimination) Act (2003): Art. 3 c)

    In addition, an employer is prohibited to give notice:

    1) when the employee is unable to perform his/her work due to ill-health, unless the incapacity has lasted for at least two years (Art. 7:670 (1) CC) or unless the employee has refused to comply with reasonable instructions from a doctor or the employer or refused to perform suitable alternative work (Art. 7:670a CC);
    2) when an employee who is fit to perform the agreed work is pregnant, during her/his maternity leave or paternity leave or the six weeks following the end of that period (Art.7:670 (2) CC) or when the employee is taking adoption leave (Art. 7:670 (7) CC).;
    3) when an employee is doing military service or performing alternative service (Art. 670 (3) CC);
    4) to a member of a works council or any of its committees (Art. 7:670 (4) CC); the ban on terminating Works Council members and/or candidates is however not applicable in case of collective dismissals based on economic grounds, if it can be expected that the employee will lose the position granting him or her the termination protection within 4 weeks, Art. 7:671a (11), 7:670a (3) (c) CC, or, in case of a termination based on the worker’s conduct or capabilities, if the termination visibly does not relate to the employee’s position in the Works Council or is in his or her interest, Art. 7:671b (6) CC.;
    5) because the employee has filed a claim, whether or not brought to court, for sex discrimination, for unequal treatment based on working-hours or employment contract (fixed-term or permanent) (Art. 7:646, 647, 648, 649 CC);
    6) to an employee who had been a member of a works council or any of its committees less than two years prior to the notice, or is eligible for election to the works council, unless with prior judicial approval, Art. 7:670(10) CC. The latter will only be given when the employer can make a convincing case that the reason for termination is not related to the employee's duties for the works council.


Workers enjoying special protection: workers' representatives; pregnant women and/or women on maternity leave; workers performing military/alternative service
Remarks:
  • An employer is prohibited from giving notice:
    1) when an employee who is fit to perform the agreed work is pregnant, during her maternity leave or the six weeks following the end of that period (Art.7:670 (2) CC);
    2) when an employee is doing military service or performing alternative service (Art. 670 (3) CC);
    3) to a member of a works council or any of its committees (Art. 7:670 (4) CC); the ban on terminating Works Council members and/or candidates is however not applicable in case of collective dismissals based on economic grounds, if it can be expected that the employee will lose the position granting him or her the termination protection within 4 weeks, Art. 7:671a (11), 7:670a (3) (c) CC, or, in case of a termination based on the worker’s conduct or capabilities, if the termination visibly does not relate to the employee’s position in the Works Council or is in his or her interest, Art. 7:671b (6) CC.;
    4) to an employee who had been a member of a works council or any of its committees less than two years prior to the notice, or is eligible for election to the works council, unless with prior judicial approval, Art. 7:670(10) CC. The latter will only be given when the employer can make a convincing case that the reason for termination is not related to the employee's duties for the works council.


Notes / Remarks
Under Dutch law, an employer who intends to dismiss an employee must, based on the nature of the dismissal (economic or due to the worker’s conduct or capacity), either refer to:
1) termination via a prior permit from the administrative authority UWV WERKbedrijf (in case of economic dismissals or dismissals due to long-time sicknesses), or
2) judicial rescission of the contract (in case of the other types of dismissals).
In addition, summary dismissal is permitted provided there is an "urgent cause".

Procedural requirements for individual dismissals - 2019    

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Notification to the worker to be dismissed: no specific form required

Remarks:
  • Art. 7:672(1) CC: Notice of termination shall be given at the end of the month, unless another day has been designated for this purpose by written agreement or by custom (so called “aanzegdag”).

Notice period:
Remarks:
  • Since the 2015 reform, the employer can no longer choose which procedure to follow.

    Article 7:669 CC establishes the procedure to be followed. The employer may terminate the employment contract if there are reasonable grounds for doing so and redeployment of the employee within a reasonable period, whether or not by means of training, to another suitable position is not possible or would not be logical.

    The statutory minimum notice period to be respected depends on the worker's length of service, as follows (Art. 7:672(2) CC):
    * less than 5 years of service: 1 month
    * between 5 and less than 10 years: 2 months
    * between 10 and less than 15 years: 3 months
    * 15 years or more years: 4 months
    • tenure ≥ 6 months
      • 1 month(s).
    • tenure ≥ 9 months
      • 1 month(s).
    • tenure ≥ 1 year
      • 1 month(s).
    • tenure ≥ 2 years
      • 1 month(s).
    • tenure ≥ 4 years
      • 1 month(s).
    • tenure ≥ 5 years
      • 2 month(s).
    • tenure ≥ 10 years
      • 3 month(s).
    • tenure ≥ 20 years
      • 4 month(s).

    Pay in lieu of notice: Yes

    Remarks:
    • If an employee is terminated before the notice period ends, the employer must pay him or her the wage he or she would have received until the end of the notice period, Art. 7:672 (10) CC.

      The court can decide to lower this compensation payment, if it considers this to be fair in view of the circumstances, on the understanding that the compensation may not be less than the monetary wage over the notice period referred to in Art. 7:672 (2) CC, nor less than the monetary wage for three months.

    Notification to the public administration: Yes

    Remarks:
    • If an employer intends to dismiss an employee, (except in case of summary dismissal), he shall either first turn to the Court to obtain the judicial rescission of the contract, in case of dismissals based on the employee’s conduct or capacity (Art. 7:671a CC) or to an administrative body: the UWV WERKbedrijf (former CWI) (Art. 7:671a CC), in case of economic dismissals or dismissals based on long-term sicknesses.
      On the procedure to be followed, see Art. 7:671a and 7:671b CC.

    Notification to workers' representatives: No

    Approval by public administration or judicial bodies: Yes

    Remarks:
    • Approval by the administration is required only if the employer has to turn to the UWV WERKbedrijf (former CWI) to obtain a dismissal permit (see above, Art. 7:671a CC). On the procedure to be followed, see Art. 7:671a CC.
      Alternatively he must turn to the Court to obtain the judicial rescission of the contract (see Art. 7:671b CC

    Approval by workers' representatives: No

    Procedural requirements for collective dismissals for economic reasons (redundancy, retrenchment) - 2019    

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    Definition of collective dismissal (number of employees concerned):
    At least 20 employees over 3 months by one employer and within one former CWI-area (Organisation for Work and Income now UWV WERKbedrijf).
    As of 1 March 2012, terminations by mutual agreement shall also be included in the number of dismissed employees for the purpose of determining whether a collective dismissal is taking place. This means that when an employer intends to dismiss 20 or more employees within 3 months regardless of the mode of termination (dismissal via UWV, judicial rescission or termination by mutual agreement), the notification requirement (trade unions and UWV) shall be observed.

    Remarks:
    • Art. 3 (1) CRNA

    Prior consultations with trade unions (workers' representatives): Yes

    Remarks:
    • Art. 3 and 4 CRNA: Duty to inform the relevant trade unions.
      If the company has a Work Council (required in companies with 50 or more employees), the employer will ask for its advice (see Art. 25 Works Council Act). The Works Council will be informed at a time when it is still able to influence in the employer decision. The employer should provide information about the motives for the decision, the consequences and the proposed measures.

    Notification to the public administration: Yes

    Remarks:
    • Art. 4 and 6 CRNA on the obligation to notify to the UWV WERKbedrijf (former CWI) specific to collective dismissals.

      See also Art. 7:671a CC: general obligation to turn to the UWV WERKbedrijf to obtain a dismissal permit before any dismissal.

    Notification to workers' representatives: Yes

    Remarks:
    • Art. 3 and 4 CRNA: duty to inform to the relevant trade unions and the Works Council (see Art. 25 Works Council Act).

    Approval by public administration or judicial bodies: Yes

    Remarks:
    • • Art. 7:671a CC specific to collective dismissals and sec. 6 ELRD on the general obligation to turn to the UWV WERKbedrijf to obtain a dismissal permit before any dismissal.

      On the procedural requirements: see also: Art. 7:671a CC (applicable to all economic dismissals and not only collective dismissals).

      The UWV WERKbedrijf has toexamine whether the employer has met the notification obligations set out by the Act (Art. 6.a CRNA). In the event the employer did not comply with the obligation to report or consult, an employee is able to nullify the termination of employment (whether by notice or by mutual agreement) within six months after the notice was given or the termination agreement was concluded. If the termination is successfully nullified, the employee is restored to its position with retroactive effect, and is entitled to bring an action for back wages plus statutory interest and increase. Otherwise, instead of being restored to his or her previous position, the employee can also request to receive an adequate compensation payment from the employer, Art. 7(3) CRNA.

    Approval by workers' representatives: No

    Remarks:
    • The employer's decision will be postponed for one month unless it is in line with the advice of the Works Council. During this period, the Works Council can appeal to the Enterprise Section "Ondernemingskamer" of the Amsterdam Court of Appeal (Art. 26 WCA).

    Priority rules for collective dismissals (social considerations, age, job tenure): Yes

    Remarks:
    • Art. 1 DR, applicable to any economic dismissal (not specific to collective dismissals): employee whose functions are considered interchangeable are classified by age categories (15-25, 25-35, 35-45, 45-55, and over 55 years) within which the selection of redundant employees is to be made according to the last-in-first-out principle.

      Furthermore, according to Art.11(2) DR and Art. 7:671a (5) CC, before terminating regular permanent employees, the employer must first consider whether it is also possible to dismiss posted workers or temporary workers, then workers who have reached the legal retirement age, then workers with no fixed working hours (zero-hours contracts), then workers with FTCs which will expire within 26 weeks and finally other workers with FTCs. This selection order does however not apply to workers who perform indispensable tasks or workers who belong to a protected group (see above).

    Employer's obligation to consider alternatives to dismissal (transfers, retraining...): Yes

    Remarks:
    • According to Art. 7:669 (1) CC a termination of an employee is only permissible if a transfer of the employee to a different position is not possible within a reasonable time period and/or a retraining of the employee for a new position is not possible. (Detailed regulations on the determination of the availability of an appropriate position to which the employee could be transferred are contained in Art. 9 and 10 of the DR. This law is applicable to any dismissal, not only collective ones.)
      Consultation with the workers' representatives on alternatives to redundancies and ways to mitigate its adverse effects: Art. 3 CRNA.

    Priority rules for re-employment: Yes

    Remarks:
    • Art. 7:682 (4) CC, when approving the dismissal, the administration can add to its consent the condition that the employer cannot hire a new worker for the same tasks as the worker who was dismissed within 26 weeks after its dismissal if the employer if he has not offered these task under the conditions to the dismissed worker.

    Notes / Remarks
    Changes on collective dismissal, effective since 1 March 2012:

    - Terminations by mutual agreement shall also be included in the number of dismissed employees for the purpose of determining whether a collective dismissal is taking place. This means that when an employer intends to dismiss 20 or more employees within 3 months regardless of the mode of termination (dismissal via UWV, judicial rescission and now termination by mutual agreement), the notification requirement (trade unions and UWV) shall be observed.

    - Under the previous system, in the event of non-compliance with notification requirements (set out in the Collective Redundancy Notification Act), the UWV WERKbedrijf did not consider the application for dismissal until the employer had fulfilled his obligations.
    The UWV WERKbedrijf is now required to examine whether the employer has met the notification obligations set out by the Act. In the event the employer did not comply with the obligation to report or consult, an employee is now able to nullify the termination of employment (whether by notice or by mutual agreement) within six months after the notice was given or the termination agreement was concluded. If the termination is successfully nullified, the employee is restored to its position with retroactive effect, and is entitled to bring an action for back wages plus statutory interest and increase.

    Severance pay and redundancy payment - 2019    

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    Severance pay:
    Remarks:
    • - An obligatory severance payment, called “transitional remuneration”, is regulated in Art. 7:673 CC
      - Employees are eligible for the severance payment, when they have worked for the employer for at least 24 months and have been terminated by the employer, the employment relationship has been terminated on mutual consent at the employer’s initiative, a fixed term employment contract has not been renewed by the employer or when the employee has terminated the employment relationship due to misconduct of the employer.
      - The payable amount must be 1/6 of the monthly wage of the employee for each 6-month period, which the employee has worked for the employer, plus ¼ of the monthly wage for each 6-month period worked above 10 years. Though, the severance pay can never be higher than 77,000 EUR, or one annual wage, if the annual wage is higher than 77,000 EUR. In enterprises with more than 25 employees, the severance pay for employees, who are 50 or older and who have worked for the employer for at least 10 years, must be equal to half their monthly wage for each 6 month period they have worked for the employer, Art. 7:673a CC.
      - Under special circumstances, based on the principles of fairness and taking into account negligent conduct of either the employer or the employee prior to the termination, the court can decide to increase or lower the severance pay.
      - A different entitlement to severance pay can be set by collective agreement (Art. 7:673b CC).
    • tenure ≥ 6 months: 0 month(s)
    • tenure ≥ 9 months: 0 month(s)
    • tenure ≥ 1 year: 0 month(s)
    • tenure ≥ 2 years: 0.66 month(s)
    • tenure ≥ 4 years: 1.32 month(s)
    • tenure ≥ 5 years: 1.65 month(s)
    • tenure ≥ 10 years: 3.33 month(s)
    • tenure ≥ 20 years: 8.33 month(s)
    Redundancy payment:
    Remarks:
    • No specific redundancy payment. Severance pay covers economic (individual and collective) dismissals
    • tenure ≥ 6 months: 0 month(s)
    • tenure ≥ 9 months: 0 month(s)
    • tenure ≥ 1 year: 0 month(s)
    • tenure ≥ 2 years: 0.66 month(s)
    • tenure ≥ 4 years: 1.32 month(s)
    • tenure ≥ 5 years: 1.65 month(s)
    • tenure ≥ 10 years: 3.33 month(s)
    • tenure ≥ 20 years: 8.33 month(s)

    Notes / Remarks
    “Transition remuneration” is statutory severance pay. There is no distinction anymore between the type of dismissal (redundancy or for personal conduct): the “transition remuneration” also counts as redundancy payment. Social plans can establish higher amounts. However, based on the CC the employer has to pay the “transition remuneration” anyway.

    Avenues for redress (penalties, remedies) and litigation procedure for individual complaints - 2019    

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    Compensation for unfair dismissal - free determination by court: Yes

    Remarks:
    • On compensation, see Art. 7:681 to 7:683 CC.
      In case of an unfair termination of a fixed term contract, a fixed compensation, equal to the amount of pay, the employee would have received if the contract would have been terminated in a regular way, can be requested, Art. 7:677 (4) CC. However, the court can decide to lower this sum with regards to the principle of reasonableness and fairness, but must at least grant 3 monthly wages
      An employee who has terminated an employment contract due to an “urgent cause”(see above) provoked by the employer may also be entitled to a compensation, Art. 7:677 CC.

    Reinstatement available: Yes

    Remarks:
    • Art. 7:681 to 7:683 CC.

    Preliminary mandatory conciliation: No

    Remarks:
    • No statutory provision in the legislation reviewed.

    Competent court(s) / tribunal(s): ordinary courts

    Remarks:
    • No specialised court, ordinary courts have jurisdiction over labour disputes.

    Existing arbitration: No

    Remarks:
    • No statutory provision in the legislation reviewed.

    Source of additional information - 2019    

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