What Is Dismissal for a Disrupted Employment Relationship under Dutch Law?
Under Dutch employment law, an employer may request termination of an employment contract when the working relationship between employer and employee has become so severely damaged that continued employment is no longer reasonable. This ground for dismissal, known as a verstoorde arbeidsverhouding, is codified in article 7:669 paragraph 3 sub g of the Dutch Civil Code and requires the employer to demonstrate that the disruption is both serious and permanent.
Dutch law distinguishes between various grounds for dismissal, and a disrupted employment relationship represents one of eight specific grounds that can justify termination through court proceedings. Unlike dismissal for poor performance or misconduct, this ground focuses primarily on the interpersonal dynamics between the parties rather than the employee's conduct or capabilities. According to court statistics, approximately 25% of all dismissal requests filed with Dutch Cantonal Courts involve claims of a disrupted working relationship.
The threshold for establishing this ground is relatively high. Dutch courts will not readily assume that a working relationship has broken down beyond repair. Employers must provide concrete evidence demonstrating the severity of the situation and their genuine efforts to restore normal working relations before seeking termination.
How Do Dutch Courts Assess Whether the Disruption Is Serious and Permanent?
Dutch courts apply a two-pronged test when evaluating dismissal requests based on a disrupted employment relationship. The employer must prove that the disruption is both ernstig (serious) and duurzaam (permanent or lasting), meaning that normal cooperation has become impossible and no realistic prospect of improvement exists.
The seriousness requirement examines whether the relationship has deteriorated to such an extent that productive collaboration is no longer feasible. This may manifest through severe interpersonal conflicts, complete loss of trust, prolonged disputes affecting daily operations, or situations where the working atmosphere has become toxic. Courts consider the impact on the employee's functioning, the department, and potentially the broader organisation.
The permanence requirement demands evidence that the situation cannot be remedied. Employers typically must demonstrate they have undertaken genuine efforts to resolve the conflict before concluding that reconciliation is impossible. Such efforts may include:
- Documented conversations aimed at addressing and resolving underlying issues
- Written agreements establishing clear boundaries and behavioural expectations
- Mediation sessions with a qualified mediator to facilitate dialogue
- Coaching or other professional support for either or both parties
- Temporary reassignments to create distance and perspective
An employer who proceeds directly to dismissal without attempting resolution measures will typically see their request denied. Courts expect employers to make reasonable efforts proportionate to the circumstances and the employee's length of service.
Can Employers Obtain Dismissal When They Caused the Disruption?
Dutch courts have established that an employer may still obtain dismissal for a disrupted relationship even when the employer bears responsibility for creating the disruption. However, the Dutch Supreme Court has ruled that if the employer deliberately caused the conflict to manufacture grounds for dismissal, termination will not be granted.
This distinction carries significant practical consequences. Where an employer has contributed to the breakdown through poor management, inadequate communication, or unreasonable behaviour, the court may still grant termination if the relationship has genuinely become unworkable. Nevertheless, the employer's culpability will directly influence the financial consequences of the dismissal.
When courts determine that the employer bears substantial blame for the disruption, they may award the employee a billijke vergoeding (fair compensation) in addition to the standard transitional payment. This additional compensation serves as both recognition of the employer's wrongdoing and a form of penalty for improper conduct. The amount varies considerably based on factors including:
- The degree of employer fault in causing the disruption
- The employee's age and position in the labour market
- Length of service and lost income expectations
- Circumstances surrounding the conflict
In severe cases, courts have awarded fair compensation ranging from several months' salary to amounts exceeding two years' wages. Therefore, employers should carefully consider their own role in any workplace conflict before pursuing dismissal proceedings.
What Role Does Redeployment Play in Dutch Dismissal Procedures?
Before granting dismissal for a disrupted relationship, Dutch courts verify whether redeployment within the organisation represents a viable alternative. Article 7:669 paragraph 1 of the Dutch Civil Code requires employers to investigate reasonable herplaatsingsmogelijkheden (redeployment possibilities) within a reasonable timeframe, potentially including necessary training.
If the conflict exists primarily between specific individuals within a department, relocating one party to another position may resolve the underlying problem while preserving the employment relationship. Employers operating larger organisations with multiple departments or locations face heightened expectations regarding redeployment efforts.
However, redeployment is not always appropriate or required. When the disruption extends beyond a specific interpersonal conflict, for instance where trust between the employee and senior management has completely eroded, placing the employee elsewhere within the organisation may not provide a genuine solution. In such circumstances, courts may conclude that redeployment "does not lie in reason" and proceed with termination despite available positions.
Smaller employers with limited alternative positions have more latitude in demonstrating that redeployment was not feasible. Courts assess redeployment obligations in proportion to the employer's size, structure, and operational possibilities. A company with fifteen employees faces different expectations than a multinational corporation with thousands of staff across multiple locations.
How Does Employee Illness Affect Dismissal for a Disrupted Relationship in the Netherlands?
Dutch law provides strong protections against dismissal during illness, but these protections do not absolutely prevent termination for a disrupted employment relationship. Courts will grant dismissal if the employer convincingly demonstrates that the disruption exists entirely independently of the illness and would persist regardless of the employee's health status.
This requirement creates significant practical challenges. Workplace conflicts frequently cause or exacerbate stress-related illness, making it difficult to disentangle the disruption from the health condition. When employees report sick during or after workplace conflicts, courts examine whether the illness resulted from the disrupted relationship or developed independently.
If the illness and disruption are intertwined, courts typically refuse termination requests. The reasoning holds that the employee's health condition may improve once the conflict is addressed through proper means, potentially restoring the possibility of continued employment. Employers facing this situation often must await the employee's recovery before pursuing dismissal, unless they can establish clear separation between the two issues.
Some employees strategically report illness when facing termination, hoping the opzegverbod tijdens ziekte (protection during illness) will prevent dismissal. Dutch courts have developed approaches to address such situations, but the burden remains on employers to demonstrate the independence of the disruption from any health complaints.
What Are the Financial Consequences of Dismissal under Dutch Law?
Employees dismissed through court proceedings for a disrupted employment relationship are entitled to a transitievergoeding (transitional payment) calculated based on their length of service and monthly salary. The current formula provides one-third of a monthly salary for each year of employment, with proportional calculations for partial years.
For an employee earning EUR 4,500 monthly with twelve years of service, the transitional payment amounts to approximately EUR 18,000. This statutory payment applies regardless of which party caused the disruption and represents the minimum compensation employees can expect.
Beyond the transitional payment, courts may award fair compensation when circumstances warrant additional payment. Relevant factors include employer fault in causing the disruption, procedural failures during the dismissal process, and damage to the employee's career prospects. Fair compensation awards in disrupted relationship cases frequently range from EUR 10,000 to EUR 100,000, depending on individual circumstances.
Courts determine the employment end date by reference to the applicable notice period, though procedural time reduces this period. A minimum of one month always remains between the court decision and contract termination, regardless of how long proceedings took.
Can Parties Avoid Court Proceedings through a Settlement Agreement?
Rather than pursuing formal dismissal proceedings, employers and employees may conclude a vaststellingsovereenkomst (settlement agreement) to terminate the employment relationship by mutual consent. This approach offers flexibility, speed, and privacy compared to court procedures, making it the preferred resolution method in many disrupted relationship situations.
Settlement agreements allow parties to negotiate terms directly, including the termination date, financial compensation, and practical arrangements such as references and non-competition clauses. The compensation typically equals or exceeds the statutory transitional payment, though parties have considerable freedom in structuring the overall package.
Employees must take care when signing settlement agreements during illness. Under Dutch unemployment insurance rules, an employee who agrees to termination while unable to work may jeopardise their entitlement to unemployment benefits. Employers should therefore make sure employees recover and report fit for work before finalising any settlement arrangement.
Following signature, employees have a fourteen-day bedenktijd (reflection period) during which they may withdraw from the agreement without providing reasons. This cooling-off period protects employees from making hasty decisions under pressure and applies to all employment termination settlements under Dutch law.
Given the complex interplay between employment law, social security entitlements, and tax implications, both employers and employees benefit from obtaining professional legal advice before concluding settlement agreements. A Dutch employment lawyer can review proposed terms, identify potential issues, and help negotiate appropriate arrangements that protect the client's interests while facilitating an orderly separation.