The ground for termination determines the authority; UWV or the subdistrict court
An employer has two possibilities in order to arrange the termination of an employment agreement amicably with the employee before UWV or the subdistrict court should be requested for a dismissal permit or a termination:
- the employee can consent to the termination by the employer due to which he will be entitled to the transitional payment; or
- via agreeing on a settlement agreement.
When the employee neither consents to the termination nor is willing to sign the settlement agreement, the employer can terminate the employment agreement by obtaining a dismissal permit of UWV or by requesting the subdistrict court to terminate the employment agreement. Both authorities will assess whether the termination is valid.
The grounds for terminating the employment agreement are exhaustively mentioned in the law. The ground for the termination will prescribe which authority the employer should go to in order to assess the termination; UWV or the subdistrict court. Termination of the employment agreement due to economical reasons or after long term sickness will be assessed by UWV. Termination of the employment agreement due to personal reasons (i.e. underperformance) will be assessed by the subdistrict court.
The subdistrict court and UWV assess the specific ground for termination as exhaustively mentioned in the law. The grounds for termination cannot be combined in order to 'built' a termination ground. Of course an employer can bring forward more termination grounds next to each other. Furthermore, besides the fact whether there is a ground for termination, UWV and the subdistrict court will assess whether the employer has searched for a suitable reassignment option within the (group of companies) of employer. Suitable is also a position which can be performed by the employee after education.
Options to appeal
If UWV does not grant permission for termination of the employment agreement, the employer can go to the subdistrict court to apply for termination. If UWV does grant permission for termination of the employment agreement, but the employee does not agree, within two months after the permission is rendered, the employee can request the subdistrict court to nullify the termination and grant reasonable compensation (apart from the transition fee). Within three months after the decision of the subdistrict court, the ruling of the subdistrict court can be appealed in the higher court and in the Supreme Court.
If the subdistrict court does not terminate the employment agreement, the employer can go to the higher court to appeal to this decision within three months after the decision of the subdistrict court and also to the Supreme Court after the decision of the higher court. If the subdistrict court does termination of the employment agreement, the employee can ask the higher court to nullify the termination and grant reasonable compensation (apart from the transition fee) within three months after the decision of the subdistrict court. Within three months after the decision of the subdistrict court, the ruling of the subdistrict court can be appealed in the higher court and in the Supreme Court.
Please note: the employer and employee have to be represented by a lawyer in the appeals proceedings to the higher court and the Supreme Court.
Deviations possible in collective labour agreement: the Redundancy Committee
In the collective labour agreement deviations can be made from the UWV dismissal procedure. The collective labour agreement can assign, instead of UWV, an independent and impartial committee to test the termination of the employment contract due to business economic reasons (see also Deviations from the collective labour agreement in a nutshell).
Old law (legislation before 1 July 2015)
If an employee did not agree to the termination of the employment agreement via a settlement agreement an employer could choose two ways to terminate the employment contract:
- Employer could request termination of the employment agreement from the subdistrict court for ‘serious cause’. These can be a number of causes, from business economic reasons to a difference of opinion or urgent cause and the subdistrict court granted a severance payment based on the Cantonal Court Formula. There was no appeal option to the higher courts or the Supreme Court for a ruling by the subdistrict court;
- Employer could apply for a dismissal permit from UWV, based on business economic reasons or on personal reasons, such as: damaged working relationship, inadequate performance or long-term illness. There was no possibility to object to or appeal a decision by UWV. When a dismissal permit was obtained by the employer the employment agreement was terminated with due observe of the notice period, without a severance payment due. The employee could however claim damages at the court based on manifestly unreasonable dismissal.
Practical pointers
- Determine clearly in advance what the ground for dismissal is, because the ground for dismissal determines which authority is competent. For example, if this concerns dismissal of an employee with a long-term illness, you have to address UWV.
- The role of UWV is increasing. Because UWV offers less opportunity to explain the fact, compiling a file (evidence) is of even greater importance.
- Lack of investments in training employees can be reason to nullify their dismissal. Think carefully and soon about how to comply with the training obligation. Read more about this here.
- Be aware that the new dismissal law imposes reassignment requirements for each ground for dismissal and no longer just for business economic dismissal and long-term illness.
- Due to the new dismissal law, entering into a settlement agreement is preferable in case of dismissal. In that case, pay attention to the requirements.
