Collective Redundancy Notification Act [CRNA], 24 March 1976, has been amended in order to implement the European Union Directive 98/59/EC of 20 July 1998. The new rules are applicable as of March 1, 2012.
Civil Code [CC], Book 7, title 10 1822, as subsequently amended and updated until April 1st, 2010
(Book 7 Particular agreements,Title 7.10 Employment agreement)
Date:1 Apr 2010;
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Extraordinary Labour Relations Decree [ELRD], 5 October 1945 as amended up to 1990
(Buitengewoon Besluit Arbeidsverhoudingen - available only in Dutch)
Date:26 Jun 1990;
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(view in NATLEX »)
Dismissal Decree [DD] (1998), as amended up to 2012
(Ontslagbesluit - available only in Dutch)
Date:1 Mar 2012;
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(view in NATLEX »)
Collective Redundancy Notification Act [CRNA], 24 March 1976, as subsequently amended in March 2012
(Wet melding collectief ontslag - available only in Dutch)
Date:17 Nov 2011;
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Equal Treatment Act, 1994 as last amended in 2012
(Algemene Wet Gelijke Behandeling)
Date:1 Oct 2012;
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Size of enterprises excluded (≤): none
Workers' categories excluded: civil/public servants, domestic workers, police, army, clergy, teachers
Sec. 2(1) ELRD
- Amendments to the Collective Redundancy Act adopted on 17 November 2011 (Act No. 197/2011) entered into force on 1 March 2012.
There are ongoing discussions to amend the dismissal regulation, and replace the current system of judicial termination or dismissal permit from the UWV by a system whereby, after dismissal has taken place, employees will have to challenge their dismissal in Court.
(see Report on "Labour market reforms tracker" under scope of additional information)
FTC regulated: Yes
Art. 7:668, Art. 7:668a and art. 7:667 CC.
Valid reasons for FTC use: no limitation
Maximum number of successive FTCs: 3
Maximum 3 successive contracts concluded at intervals of less than 3 months: sec. 7:668a 1) b) CC. However these requirements could be waived by collective agreement (sec. 7:66a 5).
Maximum cumulative duration of successive FTCs: 36month(s)
Applicable to successive contracts concluded at intervals of less than 3 months: sec. 7:668a 1) a) CC.
% of workforce under FTC: 19.3
Source: Eurostat, as of second trimester 2012.
The figure refers to the percentage of employee with a contract of limited duration (= temporary job) of total number of employee aged 15-74 years.
Eurostat data are based on the following definition:
"A job may be considered temporary if employer and employee agree that its end is determined by objective conditions such as a specific date, the completion of a task or the return of another employee who has been temporarily replaced (usually stated in a work contract of limited duration). Typical cases are: (a) persons with seasonal employment; (b) persons engaged by an agency or employment exchange and hired to a third party to perform a specific task (unless there is a written work contract of unlimited duration); (c) persons with specific training contracts."
In the Netherlands, as part of anti crisis measures, a new Act, which came into force in July 2010, temporarily extended the possibility to conclude fixed-term contracts with young workers up to 27 years The Act allowed for concluding a total of four, rather than three successive fixed-term employment contracts with regard to this group and for maximum duration of four years rather than three. The Act expired in January 2012. As a result, those specific rules for young workers are no longer applicable.
Maximum probationary (trial) period (in months): 2 month(s)
Sec. 7:652 (3) and (4) CC.
Probationary period shall be, as a maximum, 2 months when the contract is of indefinite duration or concluded for more than 2 years, and 1 month if the employment contract is concluded for less than 2 years.
Obligation to provide reasons to the employee:
Yes
Sec. 7:669 CC : the party who terminates the contract must provide the other party, at his request, with a written statement with reasons for termination.
Under Dutch law, three categories of dismissal are established:
1) Termination via a prior permit from the administrative authority UWV WERKbedrijf (former CWI).
2) Judicial rescission of the contract for "important reasons".
3) Summary dismissal (in addition to termination by mutual consent)
1) Dismissal via prior authorization from an administrative authority (UWV WERKbedrijf) (sec. 6 ELRD):
the administrative authority will grant the permit if it considers the dismissal to be fair. Valid grounds for dismissal via prior authorization are provided in the Dismissal Decree: redundancy (sec. 4:1 DD), incompetence (sec. 5:1 (1) DD), grounds of conscience (sec. 5:1 (2) DD), misconduct (sec. 5:1 (3) DD), a disturbed employment relationship (sec. 5:1 (4) DD) or the disability to work (sec. 5:2 DD).
2) Judicial rescission: "important reasons" are required. Important reasons are: 1) those circumstances that would have warranted a termination of his employment with immediate effect for an "urgent cause" or 2) change of circumstances of such a nature that the contract should in all fairness be terminated instantly or on short notice (sec. 7:685 (2) CC).
3) Summary dismissal: "urgent cause": sec. 7:677 CC. (A non-exhaustive list of acts that amount to urgent cause is provided in sec. 7:678 CC. Such acts relates to the worker's conduct.
Race, sex; religion (..) are not listed as prohibited grounds for dismissal as such, but as invalid grounds for discrimination with regards to termination of employment:
- Equal Treatment Act (1994, as amended in 2004): sec. 1 and 5 1) f;
- Equal Treatment (Disability and chronic illness) Act (2003), sec. 1 and 4 b).
- Sec. 7:646 CC on sexual discrimination with respect to employment (incl. pregnancy, maternity, childbirth);
- Equal Treatment in Employment (Age Discrimination) Act (2003): sec. 3 c)
In addition, an employer is prohibited to give notice:
1) when the employee is unable to perform his/her work due to ill-health, unless the incapacity has lasted for at least two years (sec. 7:670 (1) CC);
2) when an employee who is fit to perform the agreed work is pregnant, during her maternity leave or the six weeks following the end of that period (sec.7:670 (2) CC);
3) when an employee is doing military service or performing alternative service (sec. 670 (3) CC);
4) to a member of a works council or any of its committees (sec. 7:670 (4) CC);
5) because the employee has filed a claim, whether or not brought to court, for sex discrimination, for unequal treatment based on working-hours or employment contract (fixed-term or permanent) (sec. 7:646, 647, 648, 649 CC);
6) to an employee who had been a member of a works council or any of its committees less than two years prior to the notice, or is eligible for election to the works council, unless with prior judicial approval. The latter will only be given when the employer can make a convincing case that the reason for termination is not related to the employee's duties for the works council.
An employer is prohibited from giving notice:
1) when an employee who is fit to perform the agreed work is pregnant, during her maternity leave or the six weeks following the end of that period (sec.7:670 (2) CC);
2) when an employee is doing military service or performing alternative service (sec. 670 (3) CC);
3) to a member of a works council or any of its committees (sec. 7:670 (4) CC);
4) to an employee who had been a member of a works council or any of its committees less than two years prior to the notice, or is eligible for election to the works council, unless with prior judicial approval. The latter will only be given when the employer can make a convincing case that the reason for termination is not related to the employee's duties for the works council.
Notification to the worker to be dismissed: no specific form required
No statutory provision found in the legislation reviewed.
Notice period:
Under Dutch law, an employer who intends to dismiss an employee can choose between:
1) Termination via a prior permit from the administrative authority UWV WERKbedrijf (former CWI):
Once the permit has been obtained, the statutory minimum notice period to be respected depends on the worker's length of service, as follows (sec. 7:672 (2) CC):
* less than 5 years of service: 1 month;
* between 5 and less than 10 years: 2 months
* between 10 and less than 15 years: 3 months
* 15 years or more years: 4 months.
Note: If notice is given after a permit has been obtained, the notice period may be reduced by one month to compensate for the duration of the permit procedure, provided a minimum period of one month is observed (sec. 7:672 (4) CC).
2) Judicial rescission of the contract for "important reasons": the court decision is effective immediately and the employer is not bound by any statutory notice period: sec. 7:685(1) CC. (Note: this possibility is equally offered to an employee who wishes to terminate his contract)
Important reasons are: 1) those circumstances that would have warranted a termination of his employment with immediate effect for an 'urgent cause' or 2) change of circumstances of such a nature that the contract should in all fairness be terminated instantly or on short notice (sec. 7:685 (2) CC).
tenure ≥ 6 months:
tenure ≥ 9 months:
tenure ≥ 2 years:
tenure ≥ 4 years:
tenure ≥ 5 years:
tenure ≥ 10 years:
tenure ≥ 20 years:
Pay in lieu of notice: No
Notification to the public administration: Yes
If an employer intends to dismiss an employee, (except in case of summary dismissal), he shall either first turn to the Court to obtain the judicial rescission of the contract (sec. 7:685 CC) or to an administrative body: the UWV WERKbedrijf (former CWI) (sec. 6 ELRD).
On the procedure to be followed, see: Dismissal Decree (1998 as amended).
Notification to workers' representatives: No
Approval by public administration or judicial bodies: Yes
Approval by the administration is required only if the employer chooses to turn to the UWV WERKbedrijf (former CWI) to obtain a dismissal permit (sec. 6 ELRD). On the procedure to be followed, see: Dismissal Decree (1998 as amended).
Alternatively he can turn to the Court to obtain the judicial rescission of the contract (sec. 7:685 CC).
Approval by workers' representatives: No
Definition of collective dismissal (number of employees concerned):
At least 20 employees over 3 months by one employer and within one former CWI-area (Organisation for Work and Income now UWV WERKbedrijf).
New in 2012
As of 1 March 2012, terminations by mutual agreement shall also be included in the number of dismissed employees for the purpose of determining whether a collective dismissal is taking place. This means that when an employer intends to dismiss 20 or more employees within 3 months regardless of the mode of termination (dismissal via UWV, judicial rescission and now termination by mutual agreement), the notification requirement (trade unions and UWV) shall be observed.
Sec. 3 (1) CRNA, as amended by Act No. 197/2011, effective since 1 March 2012.
Prior consultations with trade unions (workers' representatives): Yes
Sec. 3 & 4 CRNA: Duty to inform the relevants trade unions.
If the company has a Work Council (required in companies with 50 or more employees), the employer will ask for its advice (see sec. 25 Works Council Act). The Works Council will be inform at a time when it is still able to influence in the employer decision. The employer should provide information about the motives for the decision, the consequences and the proposed measures.
Notification to the public administration: Yes
Sec. 4 & 6 CRNA on the obligation to notify to the UMV WERKbedrifj (former CWI) specific to collective dismissals.
See also sec. 6 ELRD: general obligation to turn to the UWV WERKbedrifj to obtain a dismissal permit before any dismissal.
On procedural requirements applicable to all economic dismissals and not only collective dismissals, see: sec. 4:1 to 4:5 DD.
Notification to workers' representatives: Yes
Sec. 3 & 4 CRNA: duty to inform to the relevant trade unions and the Works Council (see sec. 25 Works Council Act).
Approval by public administration or judicial bodies: Yes
Sec. 6 CRNA specific to collective dismissals and sec. 6 ELRD on the general obligation to turn to the UWV WERKbedrifj to obtain a dismissal permit before any dismissal.
On the procedural requirements: see also: sec. 4:1 to 4:5 DD (applicable to all economic dismissals and not only collective dismissals).
New in 2012
Under the previous system, in the event of non-compliance with notification requirements (set out in the Collective Redundancy Notification Act), the UWV WERKbedrifj did not consider the application for dismissal until the employer had fulfilled his obligations. As of March 2012, the UWV WERKbedrifj shall examine whether the employer has met the notification obligations set out by the Act (Art. 6.a CRNA). In the event the employer did not comply with the obligation to report or consult, an employee is now able to nullify the termination of employment (whether by notice or by mutual agreement) within six months after the notice was given or the termination agreement was concluded. If the termination is successfully nullified, the employee is restored to its position with retroactive effect, and is entitled to bring an action for back wages plus statutory interest and increase.
Approval by workers' representatives: No
The employer's decision will be postponed for one month unless it is in line wiht the advice of the works council. During this period, the works council can appeal to the Enterprise Section "Ondernemingskamer" of the Amsterdam Court of Appeal (art. 26 WCA)
Priority rules for collective dismissals (social considerations, age, job tenure): Yes
Sec. 4:2 DD, applicable to any economic dismissal (not specific to collective dismissals): employee whose functions are considered interchangeable are classified by age categories (15-25, 25-35, 35-45, 45-55, and over 55 years) within which the selection of redundant employees is to be made according to the last-in-first-out principle.
Employer's obligation to consider alternatives to dismissal (transfers, retraining...): Yes
- Consultation with the workers' representatives on alternatives to redundancies and ways to mitigate its adverse effects: sec. 3 CRNA.
- In addition, before granting a permit, the UMV WERKbedrifj (former CWI) will check under the reasonableness test whether the employer has considered alternative solutions (sec. 3:1 DD on "reasonable dismissal, and sec. 4:1 to 4:5 on procedural requirements applicable to any dismissal for economic reasons).
Priority rules for re-employment: Yes
Sec. 4:5 DD, when approving the dismissal, the administration can add to its consent the condition that the employer cannot hire a new worker for the same tasks as the worker who was dismissed within 26 weeks after its dismissal if the employer if he has not offered these task under the conditions to the dismissed worker.
Changes on collective dismissal, effective since 1 March 2012:
- Terminations by mutual agreement shall now also be included in the number of dismissed employees for the purpose of determining whether a collective dismissal is taking place. This means that when an employer intends to dismiss 20 or more employees within 3 months regardless of the mode of termination (dismissal via UWV, judicial rescission and now termination by mutual agreement), the notification requirement (trade unions and UWV) shall be observed.
- Under the previous system, in the event of non-compliance with notification requirements (set out in the Collective Redundancy Notification Act), the UWV WERKbedrifj did not consider the application for dismissal until the employer had fulfilled his obligations.
The UWV WERKbedrifj is now required to examine whether the employer has met the notification obligations set out by the Act. In the event the employer did not comply with the obligation to report or consult, an employee is now able to nullify the termination of employment (whether by notice or by mutual agreement) within six months after the notice was given or the termination agreement was concluded. If the termination is successfully nullified, the employee is restored to its position with retroactive effect, and is entitled to bring an action for back wages plus statutory interest and increase.
Severance pay:
No statutory severance pay.
In case of judicial termination, the Court may award a compensation payment applying a formula contained in the 1996 Recommendations issued by the Association of Dutch Sub district Courts:
* 1 month's wages per year of service for workers under the age of 40
* 1.5 month's wages per year of service for workers between 40 and 50;
* 2 month's wages per year of service for workers over 50.
In addition, the judge may apply a correction factor that reflects the special circumstances of the case.
For example, if the termination of employment is "neutral" (e.g. due to redundancy), compensation will be multiplied by a factor one. However, if the termination can be attributed to the employer, the factor will be higher. If the termination is attributable to the employee, the correction factor will be less than one, or even close to zero if he/she has given reason for urgent cause.
tenure ≥ 6 months: 0 month(s)
tenure ≥ 9 months: 0 month(s)
tenure ≥ 1 year: 0 month(s)
tenure ≥ 4 years: 0 month(s)
tenure ≥ 5 years: 0 month(s)
tenure ≥ 10 years: 0 month(s)
tenure ≥ 20 years: 0 month(s)
Redundancy payment:
tenure ≥ 6 months: 0 month(s)
tenure ≥ 9 months: 0 month(s)
tenure ≥ 1 year: 0 month(s)
tenure ≥ 2 years: 0 month(s)
tenure ≥ 4 years: 0 month(s)
tenure ≥ 5 years: 0 month(s)
tenure ≥ 10 years: 0 month(s)
tenure ≥ 20 years: 0 month(s)
- No statutory severance pay.
- No statutory redundancy payment but generally provided in social plans.
- In case of judicial termination, the Court may award a compensation payment applying a formula contained in the 1996 Recommendations issued by the Association of Dutch Sub district Courts:
* 1 month's wages per year of service for workers under the age of 40;
* 1.5 month's wages per year of service for workers between 40 and 50;
* 2 month's wages per year of service for workers over 50.
In addition, the judge may apply a correction factor that reflects the special circumstances of the case.
For example, if the termination of employment is "neutral" (e.g. due to redundancy), compensation will be multiplied by a factor one. However, if the termination can be attributed to the employer, the factor will be higher. If the termination is attributable to the employee, the correction factor will be less than one, or even close to zero if he/she has given reason for urgent cause.
Compensation for unfair dismissal - free determination by court: Yes
However, parties can opt for fixed compensation (sec. 7:677(4) CC).
On compensation, see sec. 7:677, 7:680 to 7:682 CC.
Reinstatement available: Yes
Sec. 7:682 (1) &(2) CC
Preliminary mandatory conciliation: No
No statutory provision in the legislation reviewed.
Competent court(s) / tribunal(s): ordinary courts
No specialised court, ordinary courts have jurisdiction over labour disputes.
Existing arbitration: No
No statutory provision in the legislation reviewed.