Job Termination

Moving abroad to begin the next stage of your career is a very exciting time in anyone’s life. It can significantly impact your lifestyle, especially if you have a family. It comes with lots of new adventures and a lot of new responsibilities. And, let’s be clear: moving to Amsterdam is a great plus for anyone on many levels. Anyone who has done it will have reviewed the employment contract with a fine-toothed comb. The devil is in the detail, as they say. All the clauses in the contract are important. There is a lot of pressure to ensure everything goes smoothly, as this is a big step for the employee and the employer. But what happens when the time eventually comes to move on, or the company decides to reshuffle their teams, and your dream job is not included in the new strategy? The termination contract should demand as much attention and scrutiny as the initial employment contract. This is something useful for all expats who come to The Netherlands. In this article, we will examine this topic with the employment law experts at Russell Law.

Depending on the circumstances, when leaving a company, there is a vast range of different and essential factors to address. How you deal with these elements can affect what happens to you next. You should probably reach an agreement, preserve a good reputation and get an excellent reference for your next career move. This is likely to be a stressful moment in your career, and it will demand your full attention. You will have many questions for the HR department. You should also become better informed of your rights in The Netherlands, which will help you make better decisions. What are you entitled to from your soon-to-be former employer? What help are you entitled to from the Dutch state? Are you able to stay in the country? Let’s ask the smart people at Russell Law what they say about this critical topic.

What are the first moves an employee should make once that shock has passed that they will soon no longer have a job?

If not made clear, ask your employer for the reason for dismissal. It may not be a valid reason. Do not immediately consent to the termination. If you consent to terminate the contract while dismissal is not permitted, the contract will still end. Consent may be revoked up to 14 days thereafter. When your contract is terminated on the employer’s initiative, it is good to look at it. Competition or confidentiality clauses may influence your search for a new job.

What happens if you are a non-EU worker?

Depending on your residence permit, you may lose your right to stay in the Netherlands after dismissal. If you become unemployed as a knowledge migrant, you may be eligible for a search period of up to 3 months to search for a new job as a knowledge migrant. The search period cannot be longer than your residence permit’s validity period. The search period is, therefore, less than three months if your residence permit expires earlier. The search period starts on the day the employment contract is terminated. If you don’t find a new job as a knowledge migrant, the residence permit will be withdrawn.

Will the employer observe a mandatory notice period and do they give a severance pay/transition compensation for the time worked and if so, how is it calculated?

When an employment contract is terminated upon the employer’s initiative, they must observe the mandatory notice period (based on the contract or the number of years of service for the company), and they must pay the employee transition compensation. This applies to both permanent and temporary employment contracts. Also, when the employment contract is terminated on the employee’s initiative due to seriously culpable acts or omissions of the employer, the employer owes a transition compensation.

The amount of the transition compensation depends on the duration of employment. The transition compensation is capped at EUR 89,000 or one year’s salary if higher. Previous temporary contracts also count when determining the number of years of service, provided the time between these contracts is six months or less.

If the dismissal is attributable to serious culpable acts or omissions on the employer’s side, the court can grant the employee reasonable compensation on top of the transition compensation. The court will determine the amount of the reasonable compensation.

The employer does not owe any transition compensation after reaching the retirement age. Also, no or lesser transition compensation is due when the employment contract ends due to culpable acts or omissions of the employee. In addition, the transition compensation is not due when the employer is declared bankrupt, has been granted suspension of payments or is subject to debt restructuring for natural persons. Finally, there is also no transition compensation due for employees with a temporary contract who are guaranteed a new employment contract starting no more than six months after the expiration of their contract.

In addition to transition compensation, you may be eligible for compensation for repatriation costs.

What help does the Dutch government provide?

After dismissal, you may be eligible for unemployment benefits. WW benefit (Werkloosheidswet-uitkering) is a temporary income when you are unemployed. The amount of the benefit depends on the salary of the previous year.

Can a job termination be contested?

Yes. Dismissal is not always permitted. For example, dismissal is not allowed during the first two years of sick leave or pregnancy leave. If you suspect your dismissal is unreasonable, be sure to contact a lawyer. Additionally, an employer either needs a permit for dismissal given by the Dutch Employee Insurance Agency (UWV) or has the court terminate the contract, except in the event of dismissal on the spot.

If you disagree with the permission granted and your subsequent dismissal, you can request the court to reinstate your employment contract or award you fair compensation. The court will assess the request against the same criteria as the UWV or the dismissal committee.

What about any company pension?

The company pension accrual stops upon dismissal.

What happens if intellectual property is involved?

If intellectual property is involved, you have likely signed a non-disclosure agreement (NDA). Companies may ask their employees to sign separate NDAs, but the employment agreement may also contain an IP or confidentiality clause. These NDAs and confidentiality clauses often include penalty clauses. If there is a breach of the confidentiality obligation, the responsible party owes the other party a contractually agreed-upon sum of money. Sometimes, a time limit has been included. When looking for a new job, it is essential to know precisely what intellectual property the NDA entails and the period for which it applies.

What strategy does Russell Law advise?

Contact a lawyer before consenting to anything and have the proposed settlement agreement checked against your personal situation and compliance with Dutch law. The rules may differ depending on the country of origin and the reason for dismissal. Our lawyers will know your specific rights and how to pursue them.

Thank you to all the people at Russell Law for these interesting answers to this important topic. If you wish to contact them, the details are here:

Russell Advocaten Website

Telephone: 020 301 55 55

Email: info@russell.nl