Dismissal and Termination of the Employment Contract

 

An employment contract of indefinite duration can only be terminated upon the commission of certain juridical acts by the employer (or the employee). Should the employer wish to terminate the employment contract, then there are different options at his disposal.

 

Parties may, at any time, mutually agree to terminate the employment contract by mutual consent. In such a case, parties may opt to lay down the the termination in a so-called settlement agreement.

 

In the event that the employee were not to agree with the termination of his employment contract, then the employer has the option of turning to the Cantonal Section of the District Court (dissolution) or the UWV employment services (termination). It is important that you, as an employer, have a legal basis for termination, i.e.: either an economic reason or a 'compelling' reason. Furthermore, also a compelling reason for the termination basis. This is called: a summary dismissal.

 

 

The employer and employee may choose to terminate the employment contract by mutual consent. In doing so, parties often save time and money (legal) costs). Another advantage of this option is that the conditions for termination, including the amount of any severance pay, may be agreed upon jointly.

 

Should employer and employee come to an agreement, you would be advised to record the agreement in a written settlement agremeent.

 

 

The employer (or the employee) may also choose to have the employment contract dissolved by the Cantonal Section of the District Court. In that case, the employer / employee would be required to serve a petition with the Court, stating the legal grounds for dismissal. Such cases are not open to an appeal.

 

If the Cantonal Section of the District Court were to grant the request for dissolution, it may also award a severance pay. The amount of such a severance pay is determined by the "cantonal formula". The cantonal formula is built up as follows:

 

One advantage of a dissolution procedure as opposed to having to file an application for permission to terminate the employment contract with the UWV employment services is that the employer is not bound by the statutory periods of notice because the judge will determine the date of termination.

 

 

If a serious cause for dismissal exists, then the employment contract may be immediately terminated by the employer. This is known as a summary dismissal. The summary dismissal must be effectuated immediately upon discovery of its serious cause. The employer is also required to explain his reasoning. In cases of summary dismissals, you would be wise to immediately provide the employee with written confirmation of his dismissal. Serious cause must entail certain conduct by the employee that is tantamount to create a situation, whereby the employer can no longer be reasonably required to continue the employment.

 

Serious cause is not easily asserted by the Cantonal Section of the District Court. You should therefore not opt for a summary dismissal too easily. In the event that the court were to decide that there no serious cause for dismissal were to exist, then the dismissal would be declared null and void, and the employee would then be entitled to continued payment of his wages, plus any applicable statutory increase and interest over these wages. You would be well advised to also file a request for dissolution with the court along with the summary dismissal.

 

Another possibility of terminating the employment contract with an employee is to give notice of termination. For this type of termination, permission of the UWV employment services is required. This is not so in case of a dismissal during the probationary period or a dissolution for serious cause.

 

Your request for a permit of notice from the UWV employment services should include the grounds for dismissal and proof of their existence. Should you obtain a permit of notice from the UWV employment services, you may terminate the employment contract subject to the applicable period of notice.

 

Regardless of any permit of notice you may have obtained from the UWV employment services, as an employer you are still bound by the statutory prohibitions of dismissal. These prohibitions of dismissal do not allow you to terminate employment through notice of termination in certain situations and/or for certain periods. E.g.:

 

-        notice during illness (in observance of the Gatekeeper Improvement Act (Wet Poortwachter);

-        notice during pregnancy;

-        notice amounting to discrimination;

-        notice to of a member of the Works Council.

 

Please note that your particular situation may amount to an exception to the rule. We can assess if that's the case in your situation.

 

The advantage of a UWV procedure is that the UWV employment services do not have the competence to grant a severance pay. This does not withstand any possibility for the employee to file a claim for damages due to unfair dismissal.

 

 

If an employee does not agree with the notice of termination of the employment contract by the UWV employment services, more specifically the amount of severance pay received, he may claim unfair dismissal. The employee can then sue the employer in a so-called unfair dismissal procedure.

During that procedure, the Cantonal Section of the District Court will determine whether the dismissal was indeed unfair. If so, then the Court may decide to award the employee remuneration for damages. The Supreme Court has already ruled that the mere absence of a severance pay does not immediately render any dismissal unfair.
 

Should you, the employer, plan the dismissal in the space of three months of at least twenty employees, all working within the same section, then that would constitute a 'collective redundancy'. In that case, you are bound by the Collective Redundancy Notification Act (WMCO).

Under this Act the employer is required to notify the unions and the UWV employment services of his intention to effectuate a collective redundancy.
 

In practice, termination of employment is not always initiated by the employer. Employees may also have reasons to request the Cantonal Section of the District Court to dissolve an employment contract (this would include the award of a severance pay). Such a request will usually be submitted in the event of a seriously deteriorated working relationship. It has in fact deteriorated so severely, that the employee can no longer be expect to respect the employment contract. If such a situation deemed attributable to the employer, then a severance pay may be awarded at the employer's expense.
 

Whether this is the case situation occurs depends on the circumstances of the case. Our lawyers at Fruytier Lawyers in Business can provide the advice and assistance you may require in initiating a dissolution request.
 

Please contact Mr. M. van Westendorp, Mrs. B.J.C. Boogers-de Haan or Mr. N.Ch. Ellens for any questions/legal issues you may have regarding termination of an employment contract.