Compensation for wrongful termination in the Netherlands
If you have been wrongfully or unlawfully dismissed in the Netherlands, you are entitled to financial compensation. The specific amount depends on the nature of the wrongful termination and the route through which it is claimed. Dutch employment law provides a structured framework of compensation that applies regardless of the employer's choice of dismissal method.
The starting point is always the transition payment (transitievergoeding): one-third of a monthly salary per year of employment, to which every employee is entitled upon employer-initiated termination. The transition payment cannot lawfully be withheld in most circumstances. On top of this, an employee who was dismissed in a seriously culpable way by the employer can claim fair compensation (billijke vergoeding) under Article 7:681 or 7:671c BW. Fair compensation is not formulaic - courts assess it based on the consequences of the unlawful conduct, including income loss, emotional distress, and the employee's labour market prospects.
Damages for breach of dismissal prohibition under Dutch law
If the employer dismissed during a period when dismissal is legally prohibited - for example, during sick leave, pregnancy, or works council membership - the employee can claim both reinstatement and damages. The damages in these cases cover the actual income loss suffered as a result of the unlawful dismissal. Courts can order reinstatement and, if the employment is not restored, award a sum that reflects the full financial consequences of the unlawful conduct.
How to maximise your compensation under Dutch law
To recover the maximum compensation, you must act within the strict time limits for challenging a dismissal. You should also document all evidence of the employer's conduct, calculate the correct transition payment, and assess whether fair compensation is available in your case. An employment lawyer experienced in wrongful termination cases can significantly increase your financial recovery by identifying all available heads of compensation and presenting your case effectively.
Fair compensation (billijke vergoeding) under Article 7:681 or 7:671c BW is not formulaic; courts assess it based on the consequences of the dismissal for the employee, including income loss, career impact, and the degree of the employer culpability, and have in egregious cases awarded amounts equivalent to several years of salary. The transition payment is capped at EUR 98,000 gross (indexed annually) or one annual salary if that is higher (Article 7:673(2)(3) BW), but fair compensation is uncapped and can substantially exceed this amount. If the Court of Appeal concludes that a subdistrict court dissolution was wrongly granted, it may order reinstatement from a date it stipulates and may award compensation for the interruption of the employment relationship (Article 7:683(3)(4) BW).
Fair compensation (billijke vergoeding) under Article 7:681 or 7:671c BW is not formulaic; courts assess it based on the consequences of the dismissal for the employee, including income loss, career impact, and the degree of the employer culpability, and have in egregious cases awarded amounts equivalent to several years of salary. The transition payment is capped at EUR 98,000 gross (indexed annually) or one annual salary if that is higher (Article 7:673(2)(3) BW), but fair compensation is uncapped and can substantially exceed this amount. If the Court of Appeal concludes that a subdistrict court dissolution was wrongly granted, it may order reinstatement from a date it stipulates and may award compensation for the interruption of the employment relationship (Article 7:683(3)(4) BW).