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Work & Security Act: Amendments to the Law of Dismissal as of 1 July 2015 (A)

Submitted By Firm: Boekel De Nerée

Contact(s): Eugenie Nunes, Sascha C. Kuit

Author(s):

Date Published: 7/3/2014

Article Type: Legal Update

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DISMISSAL ROUTES

Employee Insurance Agency or the Sub-District Court?
If an employee does not consent to his employment contract being terminated (see below), the employer will be required, except in certain cases (including dismissal during the trial period, summary dismissal, dismissal of a director or dismissal because the employee has reached pensionable age), to apply to the Employee Insurance Agency (UWV) or the Sub-District Court, depending on the grounds for the dismissal.

The law provides eight reasonable grounds for dismissal (see (a) to (h) below) and, in those cases, prescribes mandatory routes for dismissal. Therefore, under the new system, the employer will itself no longer be able to choose between the UWV and the Sub-District Court. 

Permission from the UWV or a redundancy committee appointed pursuant to a collective agreement (see below) will be required for the following grounds for dismissal:

(a) dismissal for business reasons, or

(b) dismissal of an employee who has been incapacitated for work for over two years.

Regarding dismissals for business reasons (ground (a)), the minister would like to allow employers a degree of flexibility in applying the proportionality principle, provided that this has been set out in a collective agreement. This flexibility would mean that a 10% deviation from the proportionality principle will be allowed for employees in the age categories between 25 and 55 years who demonstrably perform above average or who have demonstrably higher than average potential for the future. Employees hired through a payroll firm will be included in determining proportionality at the hiring employer.

It will no longer be possible to have the termination of a contract set aside extrajudicially. Under the new law, an employee will have to apply to the Sub-District Court for a termination to be set aside.

An application to the Sub-District Court for dissolution of a contract will be required for dismissal on the following grounds:

(c) regular absence due to illness which has unacceptable consequences for business operations,

(d) poor performance,

(e) culpable acts or omissions by the employee,

(f)  refusal to perform responsibilities due to serious conscientious objections,

(g) impaired working relationship, or

(h) other circumstances as a result of which the employment contract cannot be maintained.

Examples of ground (h) cited by the legislature are detention or the lack of a work permit. It is explicitly not the intention of the legislature that this becomes a residual category for matters where there is insufficient evidence to justify one of the other grounds.

Consent of the employee and period of reflection
If the employee consents to the termination of his employment contract on one of the grounds for dismissal listed above, then the employer may terminate the employment contract by giving notice or by concluding a termination agreement with the employee.

But there is a catch to both options: after the employee has consented in writing to the termination or has signed the termination agreement, he will still have two weeks after that, without giving reasons, to retract his consent or dissolve the termination agreement in writing. This period of reflection will be extended to three weeks if the employer has not, within two working days of the employee having given his consent, informed the employee of the period of reflection in writing or has not included the period of reflection in the termination agreement.

If, within six months of retracting his consent or dissolving the termination agreement, an employee again consents to termination or again concludes a termination agreement, he will not be entitled to retract his consent or dissolve the termination agreement again.

The original legislative proposal did not include the extension to the period of reflection or the limitation on a second period of reflection.

Reassignment and training
Before being able to request the termination or dissolution of an employment contract, the employer will have to ascertain whether it would be reasonably possible to reassign the employee to another suitable position within a reasonable period, possibly with additional training. This will not apply if the dismissal is the result of culpable acts or omissions by the employee (ground (e)). The legislative proposal has been amended to include the employee's right to training, on the one hand with a view to performing the responsibilities of his own position and, on the other hand, to performing the responsibilities of a different position within the company if the employee can no longer discharge the duties of his own position.

Redundancy Committee instead of the UWV in the case of dismissal for business reasons
Under a collective agreement, the parties to it may establish an independent and impartial committee which, instead of the UWV, will review requests for permission to terminate a contract on the basis of ground (a) (dismissal for business reasons). In that case, the collective agreement will include rules on:

  • hearing both sides;
  • the confidential treatment of information; and
  • reasonable periods for the parties to respond and for the committee to decide.

If such a Redundancy Committee has been established, then, under the collective agreement, the deviation from the proportionality principle may also be greater than the 10% as explained above. That would accordingly entail making additional special arrangements, provided that the social partners are able to reach agreement on them.

Collective agreement provisions on the establishment of a Redundancy Committee may be declared generally binding.

Reduction of notice period
After the employer has obtained permission for termination from the UWV or the Redundancy Committee, it can give notice in writing, stating its reasons. The notice period may be reduced by the time that elapses between date that the UWV/the Committee has received the (full) request for permission and the date that the UWV/the Committee has granted its permission. A notice period of one month must, however, always remain. The permission remains valid for four weeks.

The notice period remaining after permission is obtained is calculated as follows. Suppose that on 15 March the employer wishes, having obtained permission from the UWV, to terminate with a notice period of two months (15 May), whilst the procedure has taken four weeks and the contract must be terminated with effect from the end of the month. The employer subtracts four weeks from the full notice period ending on 15 May (bringing the date forward to mid-April) and may thus terminate with effect from the end of the month, i.e. from 1 May.

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