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Dismissal in the Netherlands: the complete employer's guide
Nine reasonable grounds, two routes, and a transition payment of up to €102,000 in 2026 — what the Netherlands' closed dismissal law requires of you as an employer.
You are about to dismiss someone, or someone has already asked you for a severance arrangement. Your opinion of the situation matters less than which of the nine legal grounds covers your reason, which route goes with it, and what it costs you if you get it wrong.
In brief:
- You may only dismiss someone on one of the nine grounds (article 7:669(3) of the Dutch Civil Code) — there is no general “loss of trust” ground.
- The transition payment is capped in 2026 at €102,000, or one year’s salary if that is higher (article 7:673(2) of the Dutch Civil Code), and starts accruing from the first working day.
- Under a settlement agreement (vaststellingsovereenkomst), the employee may withdraw within fourteen days — or three weeks if you fail to state this correctly (article 7:670b(2) of the Dutch Civil Code) — without giving a reason.
- The statutory notice period runs from one to four months (article 7:672(2) of the Dutch Civil Code), depending on length of service.
- Collective dismissal of at least twenty employees within three months (article 3(1) of the Collective Redundancy (Notification) Act) requires you to notify unions and the benefits agency, plus a one-month waiting period.
- The benefits agency (UWV) publishes no fixed processing time for a dismissal permit — do not rely on any figure you have seen elsewhere.
Dutch dismissal law is a closed system, and that is exactly where the mental model of an employer who has worked elsewhere usually goes wrong. In most countries you can dismiss someone with the right notice period or a severance payment, full stop. In the Netherlands, the reason first has to fit into one of nine legal boxes, and even then you must first have checked whether the employee could not be placed somewhere else in the business. You cannot buy your way out of a ground that does not exist — no amount, however large, replaces a missing reasonable ground.
What can you use as a reason for dismissal?
You may only dismiss someone if there is a reasonable ground and redeploying the employee is not possible or not appropriate — and that reasonable ground sits on a closed list, not in your own judgment of the situation.
As employer, you may terminate the contract if there is a reasonable ground for it (article 7:669(1) of the Dutch Civil Code). Redeploying the employee to another suitable role — within a reasonable period, with retraining if necessary — must not be possible or appropriate either. The nine grounds are listed in paragraph 3 of the same article, and the list is exhaustive: there is no fallback category for “the connection is gone” that does not already fall under one of the nine.
| Ground | Description |
|---|---|
| a | economic reasons |
| b | long-term sick leave, after the two-year sick pay period ends |
| c | frequent short-term sick leave with unacceptable consequences for operations |
| d | poor performance, not due to sick leave, after an improvement process |
| e | culpable conduct or negligence by the employee |
| f | a serious conscientious objection to performing the agreed work |
| g | a disrupted working relationship |
| h | other circumstances making continuation unreasonable to require |
| i | the cumulative ground: a combination of c, d, e, g and/or h |
The cumulative ground (ground i) is the newest of the nine. It lets the subdistrict court combine two or more of the partial grounds — c, d, e, g or h — that would not individually be enough on their own, but together do form a reasonable ground. If the court grants dissolution on this ground, it can also award fair compensation under article 7:671b of the Dutch Civil Code.
Next step: before you have the conversation, write down in one sentence which letter a–i covers your situation. If the answer does not fit in one sentence, it is probably not yet a dismissal case.
Do you have to offer another role first?
Yes: before you may dismiss someone, redeploying the employee within a reasonable period to another suitable role must have been investigated and found not possible or not appropriate.
That reasonable period is not vague — it is tied by law to the notice period, under article 669(1) of the Dutch Civil Code. The redeployment period matches the same one-to-four-month notice period in article 672(2) and (3), set out in the table below (article 10(1) of the Dismissal Regulation). For an employee with an occupational disability, for example someone receiving a long-term disability or sickness benefit, that period extends to 26 weeks regardless of the notice period that would otherwise apply (article 10(2) of the Dismissal Regulation).
For a minister of religion, the redeployment duty does not apply (article 7:669(2) of the Dutch Civil Code). For every other employee, the duty applies to nearly every ground, including economic dismissal.
Next step: record vacancies and internal transfer options at the moment you start the dismissal process, not afterward — that is the evidence that demonstrates your redeployment effort.
Which route do you use to dismiss someone?
Which body reviews the dismissal depends entirely on the ground — grounds a and b go through the benefits agency, and grounds c through i go through the subdistrict court, as the table below shows. In practice, though, most employers and employees choose a third path: the settlement agreement. The table below cites the relevant articles of the Burgerlijk Wetboek (BW), the Dutch Civil Code.
| Ground (7:669(3)) | Route | Article |
|---|---|---|
| a — economic reasons | dismissal permit from the benefits agency | 7:671a BW |
| b — long-term sick leave (after 2 years) | dismissal permit from the benefits agency | 7:671a BW |
| c, d, e, f, g, h, i | termination request to the subdistrict court | 7:671b BW |
| any ground, by mutual consent | settlement agreement | 7:670b BW |
For grounds a and b, you apply in writing to the benefits agency, or, if a collective bargaining agreement has designated an independent dismissal committee, to that committee — article 7:671a(1) and (2) of the Dutch Civil Code. The benefits agency states that the application for economic dismissal consists of three forms, with eight days to supply any missing information. The benefits agency does not publish a processing time in weeks — the commonly cited “four to eight weeks” is not a figure from the benefits agency itself, so treat it as a third-party estimate, not an official standard.
The most commonly used route in practice is neither procedure: a settlement agreement, where you and the employee agree on an arrangement together without involving the benefits agency or the court. Such an agreement is only valid if made in writing — article 7:670b(1) of the Dutch Civil Code — and the employee then still has fourteen days to reconsider, see below.
Next step: first determine whether you and the employee can reach agreement — a settlement agreement is nearly always faster than the benefits agency or subdistrict court route, and you know the cost upfront.
What is the reflection period for a settlement agreement?
The employee may withdraw from a written settlement agreement within fourteen days of signing, without giving a reason — and that period extends to three weeks if you have not included the withdrawal right in the agreement itself.
The employee has the right to dissolve the agreement without stating reasons, within fourteen days of the date the agreement was concluded, by a written statement addressed to you (article 7:670b(2) of the Dutch Civil Code). If you do not state that right in the agreement itself, the period becomes three weeks instead of fourteen days — that follows from paragraph 3. If you conclude a new settlement agreement with the same employee within six months of such a withdrawal, the reflection period does not apply that second time (paragraph 4). The same goes if that six-month window follows a withdrawal of the notice of termination itself, under article 671(2). Any clause that excludes or limits the withdrawal right is void, so this right cannot be negotiated away — paragraph 6.
Next step: build the withdrawal clause into your settlement agreement template as standard, so you never accidentally trigger the longer three-week period.
What is the notice period?
The notice period you must observe as employer increases with the employee’s length of service, from one month up to four months, exactly as shown in the table below.
| Length of service | Employer’s notice period |
|---|---|
| Less than 5 years | 1 month |
| 5 to 10 years | 2 months |
| 10 to 15 years | 3 months |
| 15 years or more | 4 months |
This table follows literally from article 7:672(2) of the Dutch Civil Code. Termination takes effect by default at the end of the calendar month, unless a different day has been agreed in writing or established by custom (paragraph 1). If the employee has reached state pension age, a fixed one-month notice period applies instead of the table (paragraph 3). The employee, for their part, always observes one month regardless of length of service, unless you agree in writing on a longer period (paragraph 4). That longer period can run up to six months — but only if your own notice period is then at least double it (paragraph 8).
The most underestimated rule sits in paragraph 6. If the benefits agency has granted permission to dismiss on ground a or b, you may shorten the notice period by the time the benefits-agency procedure took — “provided that a period of at least one month remains.” This is independent of how long that procedure actually lasted — you simply deduct the days between receipt of your complete application and the decision date, with a floor of one month. A collective bargaining agreement may only shorten your notice period — it cannot extend it without your consent as employer (paragraph 7). If you give notice too early anyway, you owe the employee a fixed payment equal to the wage over the remaining period (paragraph 11). The subdistrict court can reduce that payment, but not below three months’ wage (paragraph 12).
Next step: calculate the notice period from the first working day, not the last contract date — the counting date determines which column of the table you fall into.
When are you prohibited from dismissing someone?
During a number of legally protected periods, you may not give notice at all, no matter how strong your reasonable ground otherwise is — sick leave is the main one, but there are others.
| Dismissal prohibition | Duration / exception |
|---|---|
| Sick leave | Up to 2 years, or 6 weeks after state pension age; does not apply if the sick leave began after receipt of a complete benefits-agency request |
| Pregnancy and childbirth | During pregnancy, maternity leave, and 6 weeks afterward |
| Works council / employee representative body | For as long as membership lasts |
| Military or alternative service | For as long as the service obligation lasts |
| Union membership or activities | Except for activities during working hours without your consent |
You may not give notice as long as the employee is unable to work due to sick leave — that is the sick-leave prohibition, set out in article 7:670(1) of the Dutch Civil Code. It lifts in two situations. The first: the incapacity “has lasted at least two years, or six weeks for the employee who has reached state pension age.” The second: the sick leave began only after the benefits agency had already received a complete request for permission. The pregnancy prohibition (paragraph 2) continues through maternity leave and six weeks afterward, and also protects partner leave. You are also protected against dismissal during military service (paragraph 3), during membership of a works council (paragraph 4), and for union activities outside working hours (paragraph 5).
Next step: check, before every planned dismissal, whether one of these five prohibitions applies at that moment — a valid ground does not save a dismissal if a prohibition also applies.
What does the employee receive on dismissal?
For nearly every dismissal on your initiative as employer, you owe a transition payment from the first working day onward, accruing at one-third of a month’s pay per year of service, with a cap of €102,000 in 2026.
You owe the payment on termination, on dissolution at your request, or when you do not continue a fixed-term contract — including when the non-continuation results from your own serious culpable conduct (article 7:673(1) of the Dutch Civil Code). If the employee resigns, this right does not arise.
| Component | Rule |
|---|---|
| Accrual | 1/3 month’s pay per year of service, pro-rated for shorter periods |
| Start | From the first working day, no minimum length of service |
| 2026 cap | €102,000, or one year’s salary if that is higher |
| Exception 1 | Work under 18, ≤12 hours per week |
| Exception 2 | Dismissal at or after reaching state pension age |
| Exception 3 | Serious culpable conduct or negligence by the employee |
The accrual formula is in paragraph 2: “one-third of the monthly pay” per year of service. The 2026 cap is €102,000.00, against €98,000 in the text that applied until mid-2025 — an ordinary annual indexation. The amount is reset every 1 January based on the expected development of contractual wages (paragraph 3), so use the figure that applied on 1 January of the year employment ended. The three exceptions are in paragraph 7; the subdistrict court can set aside the third of these, the employee’s serious culpability, if withholding the payment would be unacceptable by standards of reasonableness and fairness (paragraph 8).
Alongside the transition payment, the subdistrict court can award fair compensation if the dissolution results from your own serious culpable conduct — article 7:671b of the Dutch Civil Code. When a fixed-term contract is not continued, a comparable, separate basis applies (article 7:673(9) of the Dutch Civil Code). And on appeal, the court can order reinstatement of the contract or fair compensation for a wrongful dissolution, under article 7:683(3) of the Dutch Civil Code.
Next step: calculate the transition payment as soon as a dismissal process starts, not at final settlement — the amount belongs in your budgeting for the case, not in a surprise afterward.
Can you dismiss someone summarily?
Yes, but only for an urgent reason that you communicate to the employee without delay. If it later turns out the reason was not urgent enough, you will quickly owe wages for the entire notice period, with a minimum of three months.
Summary dismissal is permitted “for an urgent reason, communicated to the other party without delay” — both conditions are strict (article 7:677(1) of the Dutch Civil Code). Examples on the law’s non-exhaustive list include theft, fraud, assault or serious threats against you or colleagues, deliberate damage to your property, and persistent refusal to follow reasonable instructions (article 7:678(2) of the Dutch Civil Code).
If the court later finds the reason was not urgent enough, you owe the employee compensation equal to the wage over the regular notice period (article 7:677(2) and (3) of the Dutch Civil Code). For a fixed-term contract that could not be terminated early, that compensation runs to the end of the term, which the subdistrict court can reduce to a floor of three months’ wage (paragraph 4). The employee can also have the dismissal voided, and a clause excluding this is void (paragraph 7).
Next step: record the urgent reason and the moment you discovered it in writing on the same day — the without-delay requirement makes delay in your own record-keeping just as risky as a weak reason.
What if you need to let many people go at once?
If you want to dismiss at least twenty employees in one work area within three months, the notification duty under the Collective Redundancy (Notification) Act applies. You then face a waiting period of at least one month before you may actually give notice.
| Element | Rule |
|---|---|
| Threshold | At least 20 employees, one work area, within 3 months |
| Notify | Relevant unions and the benefits agency |
| Obligation | Consultation on preventing, reducing, or mitigating the consequences |
| Waiting period | 1 month after notifying the intention, before you may give notice |
The threshold is set out in article 3(1) of the Collective Redundancy (Notification) Act: “employment contracts of at least twenty employees, working in one work area, at one or more points within a period of three months.” You notify the relevant unions and the benefits agency of the intention, and consult on preventing, reducing, or mitigating the consequences (paragraph 2). Only one month after that notification may you actually give notice (article 5a(1)); if you dismiss earlier, the employee can have the notice voided, or the court can award fair compensation (article 7).
Next step: count the number of intended dismissals per work area and per running quarter before announcing a reorganization — the threshold of twenty counts per period, not per separate decision.
How long does an employee have to challenge a dismissal?
The limitation period is two months for most dismissal claims, and three months specifically for claims about the transition payment.
Most dismissal claims must be brought within two months after the day the contract ended (article 7:686a(4)(a) of the Dutch Civil Code). That includes requests based on article 672(11) for fixed compensation on premature notice, article 677 for summary dismissal, and article 682 for reinstatement of the contract. Claims specifically about the transition payment and related payments — under articles 673, 673b and 673c — get three months instead (subparagraph b of the same paragraph). These requests are brought by petition to the subdistrict court, not by writ of summons (paragraph 2).
Next step: log the end date of every contract in your personnel file on the day itself — that date is the starting point for both limitation periods, and you do not want to reconstruct afterward exactly when someone left.
Do you need a works council?
As soon as you employ at least fifty people as a rule, you are required to set up a works council, and that council has advisory rights over reorganizations that could lead to dismissal.
As an employer running a business in which, “as a rule, at least 50 people work,” you must set up a works council (article 2 of the Works Councils Act). That council then has advisory rights over major decisions, including transfer of control, cessation of business activities, and significant reduction, expansion, or other change of activities or organization — article 25 of the Works Councils Act. A reorganization leading to collective dismissal almost always falls under this advisory right.
A separate, recently passed law — the Act on More Security for Flexible Workers — does not change any of this. That law affects on-call contracts and the chain rule for fixed-term contracts, not the dismissal grounds or payments in this guide. The Senate passed it on 7 July 2026, but it only takes effect on a date to be set by royal decree (Eerste Kamer file 36.746). Read nothing about dismissal law into it.
Next step: ask your works council for advice as soon as a reorganization is on the table, and not after the decision has already been made — a missed advisory process is a reason on its own to delay the entire process.
How does Taito.ai help with this?
Taito.ai sets up and maintains the length-of-service record for every employee, including earlier contracts with the same employer. How many years count for a given person is then a matter of looking it up, not reconstructing it.
Sources
- Dutch Civil Code Book 7, Title 10, Section 9 — articles 669 to 686a
- Dismissal Regulation, Article 10 — redeployment period
- Collective Redundancy (Notification) Act
- Works Councils Act, articles 2 and 25
- Benefits agency (UWV) — dismissal permit for economic reasons
- Senate — file on the Act on More Security for Flexible Workers (36.746)
This guide is part of the Dutch compliance hub. Wetten.overheid.nl publishes the text in the version in force on the citation date; the links above point to the specific dated version consulted.
Disclaimer
Taito.ai does not provide legal, tax or accounting advice. This article is general information about the law as it stood on the date above, not advice on your situation, and it is not a substitute for it. Rates and thresholds change. Check with a qualified adviser before acting on anything here.
