A considerable number of our insureds have employees on board. We have recently dealt with several cases where an insured had dismissed their employee with immediate effect without giving notice and the employee had challenged that dismissal. In many of these cases we unfortunately had to conclude that the dismissal had been unlawful as it did not comply with the relevant legal requirements. Based on these cases we would like to bring a few points to your attention.
Under Dutch law immediate dismissal without giving notice is only allowed under specific circumstances:
- The reason for dismissal must be immediate and urgent (for example theft, abuse or refusal of work);
- The employee must be dismissed immediately after the reason is brought to the attention of the employer; and
- The employee must be informed of the urgent reason (preferably both verbally and in writing).
The reason for immediate dismissal must be such that it is impossible to continue the employment contract. Whether this is the case varies per situation and it may therefore mean that, for example, theft in one case is grounds for immediate dismissal, but in another case it is not.
As an employer you have to keep in mind that you must be able to prove the urgent reason for immediate dismissal. Since the burden of proof in relation to urgency is high, it is important to keep a personnel file, to conduct appraisal and performance reviews and to raise any problems and put them in writing. Any official warnings should also be put in writing and signed by the employee. In the event that an immediate dismissal becomes necessary at a later stage, the personnel file will constitute important evidence that the reason for dismissal was not an isolated case, but one of poor performance for a longer period of time. In exceptional cases, immediate dismissal may be possible even without evidence of previous poor performance or issues, however such cases are the exceptions rather than the rule.
Immediate dismissal has far-reaching consequences for the employee: the employment contract ends immediately, the employee loses the right to certain unemployment benefits and the employee is not entitled to transition compensation. The court therefore considers immediate dismissal to be an extreme remedy. As an employer, you run the risk of being ordered by the court to pay compensation to the employee (e.g. in the form of continued payment of wages and expenses), should the employee contest the immediate dismissal. You may also be required to reinstate the employee.
Do you have questions regarding the situation with your employee? Feel free to contact us.