What are the procedures to summarily dismiss an employee in the Netherlands?
Summary dismissal (ontslag op staande voet) under Dutch law allows an employer to terminate the employment contract immediately, without notice. This is the most severe form of dismissal available under Dutch employment law and requires an urgent cause (dringende reden). As an experienced employment lawyer in the Netherlands, I explain in this article the grounds, procedures and consequences of summary dismissal.
Summary dismissals are sometimes necessary. However, there can be serious consequences for employers who fail to comply with Dutch legislation. Understanding what constitutes a lawful summary dismissal and acting accordingly is important for any business operating in the Netherlands.
Employers who do not follow the correct steps risk having the summary dismissal overturned by the subdistrict court (kantonrechter), which can result in significant compensation claims.
What Is Summary Dismissal in the Netherlands?
Summary dismissal is an immediate termination of the employment contract, requiring an urgent cause that makes it unreasonable for the employer to continue the employment relationship even temporarily. The employer must communicate the dismissal and the reasons for it to the employee without delay (onverwijld). This type of dismissal generally arises when an employee has seriously breached their obligations under the employment contract.
The grounds for summary dismissal are not a fixed, closed list. Article 7:678 of the Dutch Civil Code gives a non-exhaustive set of examples of an urgent cause (dringende reden), including theft, fraud, serious threats or violence, persistent refusal to follow reasonable instructions, and providing false information when entering employment. Simple incapacity or underperformance is generally not, by itself, a valid ground for summary dismissal: underperformance is normally addressed through the ordinary dismissal route for unsuitability for the role, which requires prior warning and a genuine opportunity to improve. Dutch courts test whether a summary dismissal is valid against three requirements developed in case law: the conduct must be so serious that the employer cannot reasonably be expected to continue the employment even temporarily, the dismissal must be given without delay (onverwijld) once the urgent cause becomes known to the employer, and the reason for the dismissal must be communicated to the employee at the same time as the dismissal itself. In all cases, employers must ensure they have evidence to back up their decision before taking this drastic step.
When deciding upon termination via summary dismissal, courts will consider both parties' interests while assessing whether the employer acted reasonably in executing this type of termination. Employers should also remember that employees who receive a summary dismissal often have the right to claim compensation if sufficient grounds cannot be established for such a decision. It is important to properly investigate allegations against an employee before going ahead with summary dismissal. Employees facing such action should also be aware of their protection against dismissal under the law.
What Are the Grounds for Summary Dismissal under Dutch Law?
For a summary dismissal there must be a serious breach of employment obligations which is not remediable by disciplinary action or other measures, so severe and irreparable that the employee cannot remain employed with the company any longer. The criteria used to determine if summary dismissal is appropriate vary depending on the circumstances of each case.
Summary dismissals are relatively rare under Dutch law, as employers are expected to exercise caution when considering such drastic measures. Before instituting a summary dismissal, companies should ensure that they have carefully evaluated all potential remedies and addressed them prior to taking such drastic steps in terminating an employee's contract of employment.
The procedural requirements associated with carrying out summary dismissals must also be followed closely, as failure to do so may lead to invalidation of the termination decision at court level.
What Procedural Requirements Apply to Summary Dismissal?
Before initiating a summary dismissal, the employer must establish valid grounds, such as serious misconduct, fraud, or another urgent cause, and must then communicate the dismissal and its reasons to the employee without delay. Failure to follow these procedural rules strictly can invalidate the dismissal and expose the employer to liability for damages.
Depending on the nature of the case, employers may also need to give employees an opportunity to respond before proceeding.
The last step in concluding a successful summary dismissal revolves around providing proof that all necessary steps were followed as per legal requirements. This involves gathering sufficient evidence such as notification letters, detailed records of meetings held between parties along with written confirmation from both employer and employee regarding their understanding of the situation at hand. With these documents readily available upon request, it is most likely that the employer has fulfilled his obligations in regards to due diligence measures expected when terminating employment contracts prematurely.
The following section examines what constitutes valid grounds for summary dismissal under Dutch law.
What Are the Employer's Obligations Regarding a Summary Dismissal?
Under Dutch law, employers have a strict obligation to adhere to the dismissal procedure and understand the risks associated with dismissal before taking action, in order to avoid employer liability.
Organizations must ensure compliance with all relevant policy documents, such as internal policies and procedures or collective agreements, when evaluating an employee’s performance or deciding on summary dismissal. This includes considering factors like the disciplinary record of each individual case, reviewing past warnings issued by management, consulting witnesses if necessary, and obtaining independent legal advice where appropriate.
The employer also has an obligation to provide written justification for its decision and communicate this clearly to the employee. The employer should consider offering alternative dispute resolution options if available, including mediation or arbitration services. If these are not feasible, the organisation must be ready to accept potential litigation proceedings. By closely following the steps above, organisations can better protect themselves from costly employer liabilities.
What Are the Employee's Rights in Case of Summary Dismissal?
An employee who disputes a summary dismissal must file a request with the subdistrict court (kantonrechter) within two months of the dismissal to request annulment. If the court finds the dismissal was not valid, it can award the transition payment, fair compensation (billijke vergoeding) and back pay, and the employee may also request reinstatement of the employment contract.
If the summary dismissal is valid, the employee is generally not entitled to the transition payment, because the dismissal is based on seriously culpable conduct. However, if the court overturns the summary dismissal, the employer must pay the transition payment and may also owe additional fair compensation.
It is also unlawful for any employer to terminate a contract because of discrimination based on gender, race, religion or age.
What Are the Alternatives to Summary Dismissal?
Alternatives to summary dismissal include disciplinary measures such as written warnings, suspension or demotion. The employer may also pursue a dissolution of the employment contract through the subdistrict court based on culpable conduct, or negotiate a termination by mutual consent through a settlement agreement (vaststellingsovereenkomst).
Employers should assess the risk of possible legal action upon a summary dismissal and consider whether one of these alternatives, or the standard dismissal procedures, would better serve both parties before proceeding.
What Disciplinary Penalties Apply under Dutch Employment Law?
Employers must take great care when imposing any form of discipline on an employee, since failure to follow the required procedures can lead to costly litigation and hefty fines. A strict set of procedures must be followed before disciplinary sanctions may be imposed.
Firstly, employers should ensure that they have documented evidence for any misconduct or rule-breaking by their employees. Once this has been established, the employer must adhere to the relevant steps specified in their internal disciplinary procedures. This includes providing clear details about the alleged violation to the employee, allowing them sufficient time to prepare for a hearing if necessary, and giving them access to any documents used as evidence during proceedings. Failure to comply with these requirements could result in dismissal being deemed unlawful or unfair.
Employers are also obliged to act reasonably when determining appropriate disciplinary measures. For example, summary dismissal (dismissal without notice) is only permitted under exceptional circumstances where there is no possibility of remedial action. Where lesser forms of discipline such as suspension or verbal warnings would suffice, employers must consider those options first before resorting to dismissal.
Disciplining employees remains an important part of managing staff performance within the workplace. Employers should bear in mind that due process and fairness remain paramount when taking any form of disciplinary action against an employee under Dutch law.
Key legal sources
- Article 7:677 of the Dutch Civil Code - consequences of dismissal without observing the notice period or without a valid ground
- Article 7:678 of the Dutch Civil Code - non-exhaustive examples of an urgent cause (dringende reden) for summary dismissal