In the Netherlands we have a closed dismissal system. As a result, an employment contract can only be terminated insofar as this is regulated by law and/or this is in line with the legal system. However, this still leaves various options with which the employment contract can be ended. With the addition that this overview is not exhaustive, this can be done in the following ways.
Due to its expiration
In principle, fixed-term employment contracts end automatically, without any notice being required. Although this rarely happens in practice, the parties can make different agreements. In that case, the parties must terminate the agreement in good time, taking into account the applicable term.
When the employment contract expires by operation of law, the employer is, however, obliged to notify the employee of the termination in advance. If he fails to do so (or does this too late), the employment will end without prejudice, but the employer may owe compensation.
Due to termination by the employee
Unless the parties have entered into a fixed-term employment contract without the option of early termination, the employee may resign at any time. The employee does not need to have a (valid) ground for the termination. He doesn’t even have to give a reason. His single will to terminate the employment agreement is sufficient.
When giving notice of termination, the employee must observe the applicable notice period, unless the employer has given the employee a reason to terminate the employment contract with immediate effect (instant resignation).
Due to termination by the employer
Unlike the employee, the employer cannot unilaterally terminate the employment contract. For termination of the employment contract, the employer needs the consent of the employee. If the employee refuses this consent, the employer requires permission from the UWV. The UWV only grants this permission if the employer demonstrates that business economic circumstances justify this (the a-ground) or the employee has been ill for more than 104 weeks (the b-ground).
This is only different, during a possible probation period. If a probationary period clause has been legally agreed, the employer can always terminate the employment contract – during its term – with immediate effect, provided that (of course) the relevant rules and agreements are complied with.
By dissolution on reasonable grounds
Under certain circumstances, the subdistrict court may dissolve (ontbinden) the employment contract at the employer’s request. This requires, among other things, that the employer has a reasonable ground. There is a reasonable ground:
• if the employee is regularly unable to perform the stipulated work as a result of illness or defects and the employer’s business operations experience, as a result thereof, unacceptable consequences (the c-ground);
• if the employee is unfit to perform the stipulated work (the d-ground);
• in the event of culpable acts or omissions on the part of the employee (the e-ground);
• in the event of work refusal due to conscientious objection (the f-ground);
• in the event of a disrupted employment relationship (the g-ground);
• if the employer cannot reasonably be expected to continue the employment (the h-ground);
• if there is such a combination of 2 or more grounds (with the exception of the a-, the b- and the f-ground) that the employer cannot reasonably be expected to allow the employment contract to continue (the i-ground).
In addition to the fact that the employer must have reasonable grounds, reassignment of the employee to another suitable position within a reasonable period of time, whether or not with the aid of training, must not be possible or not reasonable. Reassignment is in any case not reasonable if there is culpable acting or negligence on the part of the employee, as referred to in the e-ground.
By mutual agreement
The parties can always reach agreement to terminate the employment contract in mutual consultation. When the parties reach this agreement, they must record it in writing. This termination agreement is commonly referred to as a settlement agreement (abbreviated to VSO).
Dismissal at instance
Sometimes, one of the parties behaves in such a way that the other party cannot reasonably be expected to continue the employment contract. He may then be entitled to terminate the employment contract without delay for an urgent reason (ontslag op staande voet). If the employer misbehaves, the employee immediately resigns; if the employee misbehaves, he will be fired immediately.
The resolutive condition
From time to time, certain aspects of the employment contract are so important to the employer that, as far as he is concerned, the employment contract must end immediately when they occur. He can then stipulate a resolutive condition (ontbindende voorwaarde). The employment contract will then end by operation of law (automatically) as soon as the concerning condition takes effect, without notice or something similar being necessary.
Dissolution due to breach of contract
The other options for ending the employment agreement do not exclude the possibility of dissolving (ontbinden) the employment contract due to a shortcoming in the fulfillment thereof. Not every shortcoming justifies the dissolution; the deficiency must be serious enough therefor.
The dissolution for breach of contract should not be used as an “easy” escape to avoid the “difficult” route of dissolution on reasonable grounds. Dissolution due to breach of contract will therefore not be possible faster than dissolution due to reasonable grounds. In general, the breach of contract must therefore be so serious that the other party cannot reasonably be expected to continue the agreement.
The dissolution due to breach of contract can only be pronounced by the court; extrajudicial dissolution is not possible. Both parties are authorized to file the claim for dissolution.
Nullification on grounds of deception
A contract made under deception (fraud) is voidable. Deception is present:
“when a person induces another person to perform a certain legal act by any deliberate false statement made for that purpose, by deliberately concealing for that purpose any fact which the concealer was obliged to disclose, or by any other artifice. Recommendations in general terms, even if untrue, do not in themselves constitute deception.”
In its decision of 7 February 2020, the Supreme Court (Hoge Raad) ruled that the dismissal system does not preclude nullification of the contract for deception, “because it does not serve to protect an employee who commits deception when entering into the employment contract.” In the Supreme Court’s opinion, the employer in that case had rightly annulled the employment contract for deception, because the employee had deliberately and intentionally provided incorrect and false information regarding his education and work experience during the application process.
