The new road to termination of employment in the Netherlands: bumpy or well paved?

As per 1 July 2015, new Dutch regulations as to termination of employment are expected to enter into force. These new regulations are, among others:

> The Labour Office (UVW) procedure should be followed if the employment is terminated for economic reasons / long term illness.

> The court procedure should be followed if the employment is terminated for performance related reasons / in case of an unsustainable employment relationship.

> Both employer and the employee can appeal to the court against the decision of the Labour Office.

> Appeal and cassation to a higher court will become possible against the court decision.

> An employee who has been employed for two years or longer will, in case of termination of his employment, be entitled to a severance payment of ⅓ gross monthly salary for each of the first ten years of service and ½ gross monthly salary for each year of service exceeding the first then years (maximum € 75,000 gross or a gross annual salary if this exceeds € 75,000 gross).

> The employee is also entitled to such payment if his employment agreement for a definite period of two years is not extended.

> In case of having reached a settlement agreement with the employee, a two-week reflection period will apply, during which the employee can revoke the agreement.

With the new regulations, Dutch government aims to make it easier to terminate employment agreements. In addition, the regulations should be reduced and simplified. Critics however, such as employment law specialists, believe that it will actually be more difficult to terminate an employment agreement. It will remain necessary to build up a case and to have offered the employee an improvement plan before being able to come to a termination. In addition, the possibility to appeal will result in lengthy court proceedings, taking years. The introduction of a maximum severance payment is, according to the critics, also pointless as the court can increase this payment if the employer is to be blamed for the termination. Finally, as a result of the possibility for the employee to revoke the agreement within two weeks, the position of the employer in negotiations will become worse.

It remains to be seen whether Dutch government will take into account the issues of the critics and will amend the proposal. Ovidius will keep you posted.

Source: FD


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