When is dysfunction cause for dismissal?

And what if there are a confluence of reasons, but none of them is a convincing ground for dismissal on its own?

Employers regularly wrestle with the question: how do I deal with an employee who is not performing well (anymore)? When can I fire a dysfunctional employee? When do you legally speak of dysfunction and when is this a valid reason for dismissal? And what if there is more than dysfunction – for example, a disturbed working relationship – but none of these grounds seems independent enough for dissolution? In this article we discuss three recent judgments that provide guidance for practice and show what is expected of the employer.

What does the law say about dysfunction?

The legal basis for dismissal for dysfunction can be found in article 7:669 paragraph 3 under d of the Civil Code. This states that an employment contract can be terminated if the employee is unfit to perform the stipulated work, other than due to illness or infirmity.

Some important conditions apply:

• The employer must make the dysfunction known to the employee in a timely and concrete manner.
• The employee must be given the opportunity to improve his performance (for example, through an improvement program or training).
• The employer must investigate re-employment in another suitable position.
• And the dysfunction must not be due to insufficient training or unclear expectations.

Verdict 1: digitization and dysfunction

A recent case before the District Court of Overijssel involved an administrative assistant who could no longer cope with her work due to digitization. Despite long-term counseling, there was no improvement. The employee was partially unfit for work, but the employer argued that the dysfunction was unrelated to the disability. The subdistrict court agreed: this was a situation in which the employee structurally no longer met the job requirements, while the employer had made a sustained and demonstrable effort to improve and redeploy him. The employment contract was therefore dissolved. Striking detail: the ban on giving notice in case of illness was set aside because the reason for the dismissal (dysfunction) was not related to the disability. Decision: ECLI:NL:RBOVE:2025:2926

Verdict 2: combination of grounds

The second case involved a combination of dysfunction and a disturbed employment relationship. The employer explained to the court that the application manager structurally did not follow up on customer complaints, did not solve technical problems adequately and had a negative attitude internally.
Although this was not sufficient for dismissal on the basis of malfunctioning alone, nor on the basis of a disturbed working relationship alone, the judge considered the combination sufficient for dissolution. This so-called i-ground makes it possible to combine several unsupported grounds for dismissal.

Important condition: even with the i-ground, the employer must be able to prove that efforts have been made to restore the working relationship and that there are no suitable redeployment possibilities.
Please note: in case of dissolution on the i-ground, the court can award an additional (cumulative) compensation up to a maximum of 50% of the transitional compensation, on top of the regular compensation.

This case was also subject to a notice prohibition because the employee was a Works Council member. The court accepted the ground for dissolution because it had been sufficiently demonstrated that the request for dismissal did not stem from the Works Council membership. Decision: ECLI:NL:RBROT:2025:5348

Verdict 3: behavioral problems

The third case involved a sales employee who, according to the employer, did not meet the company’s standards of behavior. She showed a closed attitude, had conflicts with colleagues and resisted improvement measures. Despite multiple warnings, interviews and even suspension of pay, the employee did not cooperate with anything and stopped appearing on the shop floor.
The employer argued that there was dysfunction, culpable behavior and a disturbed working relationship – a confluence of grounds. The judge ruled that there was indeed culpable conduct, but not serious. The employment contract was dissolved, but the employee received a transitional allowance. Ruling: ECLI:NL:RBROT:2025:5274

Conclusion: care is essential

These decisions show that dysfunction as a ground for dismissal demands a lot from the employer. It is not a question of “the employee is not performing well, so he has to go”; on the contrary, the judge expects a documented improvement plan, clear communication and demonstrable efforts for improvement and reinstatement over a long period of time.

Is there more to it than dysfunction, such as a disturbed working relationship or culpable behavior? Then the combination ground offers a solution. But even then the bar remains high: the employer must carefully substantiate and act.

Practical advice to employers:

• Document performance and discuss deficiencies in a timely manner.
• Offer a concrete improvement plan with clear goals.
• Involve colleagues and managers, but remain objective.
• Investigate redeployment opportunities, including outside your own department.
• Be alert to termination orders and Works Council memberships.

Dissolution is and remains an extreme measure. But those who act carefully avoid legal pitfalls – and give the employee a fair chance to improve.

Questions

Do you have questions as a result of this article, or about employment law in general? If so, please contact one of our attorneys by  email, phone or fill out the contact form for a no-obligation initial consultation. We are happy to think along with you.