The employer's risks in summary dismissal
Ontslag op staande voet (summary dismissal) is the most powerful - and most dangerous - dismissal tool available to a Dutch employer. When it works, it ends the employment immediately and the employee forfeits their transition payment and WW entitlement (if the urgent reason was their own fault). When it fails - because the legal requirements were not all met - the consequences for the employer can be severe. Before proceeding with a summary dismissal, a careful risk assessment is essential.
The main risks for the employer are:
- Annulment of the dismissal: If the court finds the dismissal lacked a valid urgent reason, was not given immediately, or the reason was not communicated contemporaneously, it will annul the dismissal. The employer must then pay all withheld wages retroactively, plus the statutory increase of up to 50% under Article 7:625 of the Dutch Civil Code.
- Transition payment liability: An annulled or invalid summary dismissal entitles the employee to the full transition payment.
- Fair compensation (billijke vergoeding): If the summary dismissal is found to have been given in bad faith or without sufficient basis, the court may award fair compensation on top of the transition payment - potentially a very large sum.
- Gefixeerde schadevergoeding: The employer may owe the equivalent of notice period wages if the dismissal is found irregular.
When to use summary dismissal under Dutch law - and when not to
Summary dismissal is appropriate only when there is clear, documented evidence of a serious urgent reason - theft, fraud, violence, or serious insubordination - and the employer acts immediately upon learning of it. It is not appropriate as a shortcut to avoid the cost of a proper dismissal procedure. The risk-reward ratio is unfavourable unless the evidence is overwhelming. An employment lawyer should be consulted before any summary dismissal is effected.
If a summary dismissal is annulled, the employer must pay all withheld wages retroactively plus the statutory increase of up to 50% under Article 7:625 of the Dutch Civil Code, plus the transition payment; fair compensation (billijke vergoeding) under Article 7:681 of the Dutch Civil Code may also be awarded if the employer acted without sufficient basis or in bad faith. As a precautionary measure, employers who have effected a summary dismissal may simultaneously or subsequently request dissolution of the contract by the subdistrict court under Article 7:671b of the Dutch Civil Code - the so-called second defence line - so that even if the summary dismissal is found invalid, the employment ends by court order and retrospective wage liability is limited. The statutory dismissal prohibitions in Article 7:670(1)-(4) and (10) BW do not apply to summary dismissal for an urgent reason (Article 7:670a(2)(c) BW), but the remaining prohibitions - including those deriving from anti-discrimination legislation - do apply.
If a summary dismissal is annulled, the employer must pay all withheld wages retroactively plus the statutory increase of up to 50% under Article 7:625 of the Dutch Civil Code, plus the transition payment; fair compensation (billijke vergoeding) under Article 7:681 of the Dutch Civil Code may also be awarded if the employer acted without sufficient basis or in bad faith. As a precautionary measure, employers who have effected a summary dismissal may simultaneously or subsequently request dissolution of the contract by the subdistrict court under Article 7:671b of the Dutch Civil Code - the so-called second defence line - so that even if the summary dismissal is found invalid, the employment ends by court order and retrospective wage liability is limited. The statutory dismissal prohibitions in Article 7:670(1)-(4) and (10) BW do not apply to summary dismissal for an urgent reason (Article 7:670a(2)(c) BW), but the remaining prohibitions - including those deriving from anti-discrimination legislation - do apply.