Fraud by an employee as grounds for summary dismissal
Fraud (fraude) or intentional deception by an employee is among the most serious forms of misconduct in employment law and one of the clearest examples of an urgent reason (dringende reden) for summary dismissal under Article 7:678 of the Dutch Civil Code. Typical forms of employee fraud include: submitting false expense claims, falsifying time records, creating phantom employees on the payroll, misappropriating company funds, and deceiving the employer about qualifications or experience. In each case the conduct fundamentally undermines the trust that is the basis of the employment relationship.
Dutch courts take a strict approach to fraud. The position of the employee within the company is particularly relevant: a financial controller who commits payroll fraud, or a lawyer who bills fictitious hours, occupies a position of the highest trust, and courts have consistently upheld summary dismissal in such cases. The fact that the amount involved may be small does not save the employee where the fraud is deliberate and systematic.
Investigation procedure under Dutch employment law
Before dismissing for fraud, the employer should conduct a thorough investigation - forensic accounting, IT forensics, document review, and interviews. The employee must be given the opportunity to respond (hoor en wederhoor) before the decision to dismiss is made. The employer must document the investigation carefully, as the documentation will form the evidentiary basis in subsequent court proceedings. Where the fraud involves criminal conduct, the employer may also report the matter to the police (aangifte), though this is a separate decision from the employment law dismissal.
Damages claim by the employer under Dutch law
In addition to summary dismissal, an employer whose employee commits fraud can claim damages under Article 7:677(2) of the Dutch Civil Code: the employee who causes the urgent reason through their culpable conduct is liable to pay the employer a fixed penalty (gefixeerde schadevergoeding) equal to the wages during the applicable notice period, plus actual damages. This makes fraud by an employee potentially very costly - both in terms of the dismissal itself and any civil damages action that follows.
Fraud by an employee typically falls under multiple sub-sections of the non-exhaustive list in Article 7:678 of the Dutch Civil Code, including deliberate deception of the employer and abuse of a position of trust; the Hoge Raad has confirmed that systematic deliberate conduct causing financial harm to the employer justifies summary dismissal regardless of the amount involved. The party whose seriously culpable conduct gave the other party the urgent reason is liable to pay a fixed penalty (gefixeerde schadevergoeding) under Article 7:677(2) of the Dutch Civil Code equal to the wages that would have been earned during the applicable notice period, in addition to any actual damages claimed under Article 7:677(3) of the Dutch Civil Code. Before dismissing for fraud, the employer must give the employee an opportunity to respond to the allegations (hoor en wederhoor); failure to do so risks the court finding the dismissal disproportionate even if the fraud is substantiated.
Fraud by an employee typically falls under multiple sub-sections of the non-exhaustive list in Article 7:678 of the Dutch Civil Code, including deliberate deception of the employer and abuse of a position of trust; the Hoge Raad has confirmed that systematic deliberate conduct causing financial harm to the employer justifies summary dismissal regardless of the amount involved. The party whose seriously culpable conduct gave the other party the urgent reason is liable to pay a fixed penalty (gefixeerde schadevergoeding) under Article 7:677(2) of the Dutch Civil Code equal to the wages that would have been earned during the applicable notice period, in addition to any actual damages claimed under Article 7:677(3) of the Dutch Civil Code. Before dismissing for fraud, the employer must give the employee an opportunity to respond to the allegations (hoor en wederhoor); failure to do so risks the court finding the dismissal disproportionate even if the fraud is substantiated.