Directors

A director finds himself in a special position in employment law; as they enjoy a relationship with their company in both a corporate legal sense as well as in an employment legal sense.
 

A director is appointed to his position as director of the company by the Annual General Meeting (AGM). Apart from his corporate relationship, as a director, he also has an employment relationship with the company (e.g. through a written employment contract).
 

Because of this dual status, the dismissal of a director should take both the legal employment ramifications as well as its corporate consequences into account.
 

The termination of the corporate relationship of a director will often be effectuated by a decision of the AGM. An AGM decision can dismiss a person from his position as a director of the company.
 

Such a dismissal may take immediate effect, as parties are not bound by any period of notice. It is important that all statutory requirements are observed in taking such a dismissal decision. No permission from the UWV employment services or court intervention is required to end the corporate relationship.
 

It is, of course, also possible to terminate the corporate relationship by mutual consent or for the director himself to resign.

Relevant case law has determined that the dismissal decision of the AGM not only terminates the corporate relationship, but, in principle, also terminates the employment relationship. The 1945 Labour Relations Decree (BBA) does not apply to the termination of the employment relationship of a director. No permission from the UWV employment services is required, therefore.
 

A big difference to the position of 'a regular employee’ is that the director cannot claim a restoration of his employment relationship. He may, however, initiate an unfair dismissal procedure, in order to obtain a severance pay. Such a procedure should not be filed with the Cantonal Section of the District Court, but with the Civil Section of the District Court.