Damages claims following summary dismissal in the Netherlands
Where a summary dismissal (ontslag op staande voet) is unlawful - because the requirements were not met or because the conduct does not constitute an urgent reason - the employee has two options: seek annulment (vernietiging) to restore the employment, or accept the dismissal and claim damages. Many employees choose the damages route when restoration of the employment relationship is not realistic or desired.
The starting point for damages when an employee accepts an unlawful summary dismissal is the gefixeerde schadevergoeding (fixed damages) under Article 7:677(2)-(4) BW. This is calculated as the wages that would have been paid during the applicable notice period - that is, the amount the employee lost because the employer failed to observe the notice period. In addition, the employee is entitled to the transition payment (which cannot be withheld even in cases of summary dismissal unless the employee is themselves seriously culpable) and, in the most serious cases, fair compensation (billijke vergoeding) under Article 7:681 of the Dutch Civil Code.
Employer's counter-claim
Where a summary dismissal is found to be lawful, the employer can claim the gefixeerde schadevergoeding from the employee - that is, the wages saved by not observing the notice period, up to the applicable notice period length. This acts as a deterrent against employees who walk out without notice. In practice, employers in summary dismissal cases more often face the employee's damages claim than the reverse, given the high legal standard required for a valid dismissal.
Seeking legal advice promptly in the Netherlands
Given the strict two-month time limit for requesting annulment, and the complexity of calculating damages in summary dismissal cases, employees should consult an employment lawyer immediately after receiving notice of dismissal. The lawyer will assess whether the dismissal was lawful, advise on the annulment versus damages decision, and if relevant, file an interim injunction to protect the employee's position pending the main proceedings.
The gefixeerde schadevergoeding under Article 7:677(2)-(4) BW is calculated as the wages that would have been paid during the applicable notice period; for a fixed-term contract that cannot be terminated ad interim, the compensation equals the wages over the remaining contractual period, subject to a minimum of three months wages. In addition, an employee who accepts an unlawful summary dismissal is entitled to the transition payment (Article 7:673 of the Dutch Civil Code), and may also claim fair compensation (billijke vergoeding) under Article 7:681 of the Dutch Civil Code if the employer acted seriously culpably. The employer may mitigate or the court may increase these amounts if, having regard to all the circumstances, such appears fair, and a higher compensation is possible for certain management functions designated by ministerial regulation (Article 7:677(5)(6) BW).
The gefixeerde schadevergoeding under Article 7:677(2)-(4) BW is calculated as the wages that would have been paid during the applicable notice period; for a fixed-term contract that cannot be terminated ad interim, the compensation equals the wages over the remaining contractual period, subject to a minimum of three months wages. In addition, an employee who accepts an unlawful summary dismissal is entitled to the transition payment (Article 7:673 of the Dutch Civil Code), and may also claim fair compensation (billijke vergoeding) under Article 7:681 of the Dutch Civil Code if the employer acted seriously culpably. The employer may mitigate or the court may increase these amounts if, having regard to all the circumstances, such appears fair, and a higher compensation is possible for certain management functions designated by ministerial regulation (Article 7:677(5)(6) BW).