Dismissal via the Subdistrict Court (Kantonrechter)

When your employer wishes to dismiss you on personal grounds, they must request the subdistrict court (kantonrechter) to dissolve (ontbinden) the employment contract. This court procedure is a fundamental part of Dutch employment law and provides important protections for employees. In this comprehensive guide you will learn when the employer must go to court, which dismissal grounds exist, how the procedure works, what severance pay and equitable compensation you may receive, and what your options are for appeal. Understanding this process is essential for protecting your rights.

When does the employer go to court?

Under Dutch employment law, there are two routes for employers to terminate an employment contract unilaterally. The route the employer must take depends on the ground for dismissal:

• UWV route: for economic reasons (bedrijfseconomische redenen, sub a) and long-term illness (langdurige arbeidsongeschiktheid, sub b), the employer must request permission from the UWV (Employee Insurance Agency).
• Court route: for all personal grounds, the employer must request the subdistrict court (kantonrechter) to dissolve the employment contract. This is regulated in Article 7:671b BW.

The personal grounds that require the court route include:

• Frequent absenteeism (sub c)
• Underperformance / disfunctioneren (sub d)
• Culpable conduct (sub e)
• Conscientious objections (sub f)
• Disrupted working relationship (sub g)
• Other circumstances (sub h)
• Combination of grounds (sub i)

The employer may also go to court if the UWV has rejected a request for permission to dismiss on economic grounds or long-term illness. In that case, the employer can file a petition with the subdistrict court as a second attempt (Article 7:671b lid 1 sub b BW).

The dismissal grounds (a through i)

Article 7:669 lid 3 BW contains an exhaustive list of grounds on which an employer may terminate an employment contract. These grounds are referred to by their letter designations (a through i). The employer must demonstrate that at least one of these grounds is fully met (voldragen ontslaggrond). With the exception of the combination ground (i), the employer cannot combine partial grounds to construct a full dismissal case.

The complete list of dismissal grounds is:

• a. Economic reasons (bedrijfseconomische redenen): the employer needs to reduce staff due to financial circumstances, technological changes, or reorganisation. This goes through the UWV.
• b. Long-term illness (langdurige arbeidsongeschiktheid): the employee has been ill for at least two years and recovery within 26 weeks is not expected. This also goes through the UWV.
• c. Frequent absenteeism (regelmatig ziekteverzuim): the employee is frequently absent due to illness, causing unacceptable consequences for the business, provided the absence is not caused by insufficient working conditions or adjustments by the employer.
• d. Underperformance (disfunctioneren): the employee is unable to perform their duties satisfactorily, provided the employer has given timely notice, offered an improvement plan, and provided adequate support.
• e. Culpable conduct (verwijtbaar handelen of nalaten): the employee has acted in a culpable manner such that the employer cannot reasonably be expected to continue the employment. Examples include persistent refusal to follow reasonable instructions, violation of company rules, or misconduct.
• f. Conscientious objections (gewetensbezwaren): the employee has serious conscientious objections to performing their duties, and the work cannot be adapted or the employee cannot be reassigned.
• g. Disrupted working relationship (verstoorde arbeidsverhouding): the relationship between the employer and the employee is so severely disrupted that continuation of the employment cannot reasonably be expected.
• h. Other circumstances (andere omstandigheden): other circumstances that are of such a nature that the employer cannot reasonably be expected to continue the employment. This is a residual category for exceptional situations not covered by the other grounds.
• i. Combination ground (cumulatiegrond): a combination of two or more of the grounds under c through h, where each ground individually does not fully justify dismissal, but taken together they do.

Personal grounds in detail

The grounds that are most commonly used in court procedures are underperformance (d), culpable conduct (e), and disrupted working relationship (g). Each of these grounds has its own specific requirements.

Underperformance (sub d)

For dismissal on the ground of underperformance, the employer must demonstrate that you are unable to perform your duties satisfactorily and that this is not caused by illness. Crucially, the employer must show that they informed you of the underperformance in a timely manner, offered a concrete improvement plan with measurable goals, provided adequate support (coaching, training), gave you reasonable time to improve, and that despite all this, your performance did not improve. This is one of the most difficult grounds for employers because courts set high standards for the improvement process.

Culpable conduct (sub e)

Culpable conduct covers situations where the employee has acted blameworthy. This can range from serious misconduct (theft, fraud, harassment) to less severe but persistent issues such as repeatedly arriving late despite warnings, violating company policies, or refusing reasonable instructions. The severity of the conduct must be proportionate to the consequence of dismissal. The employer must have given warnings (except for very serious misconduct) and must demonstrate that the conduct makes continuation of the employment unreasonable.

An important distinction: if the culpable conduct is so severe that it constitutes an "urgent reason" (dringende reden), the employer may opt for summary dismissal instead of going to court. However, summary dismissal carries significant risks for the employer. Many employers prefer the safer court route even for serious misconduct.

Disrupted working relationship (sub g)

The disrupted working relationship ground requires the employer to demonstrate that the relationship has deteriorated to such an extent that productive collaboration is no longer possible. The disruption must be severe and durable. The employer is expected to have made genuine efforts to resolve the situation, including offering mediation, and must have investigated reassignment possibilities.

The combination ground (i-ground)

The combination ground (cumulatiegrond, sub i) was introduced on 1 January 2020 as part of the WAB (Wet Arbeidsmarkt in Balans). Before this date, the employer had to demonstrate one fully met dismissal ground. The introduction of the i-ground allows the employer to combine two or more incomplete grounds from sub c through h to form a sufficient basis for dismissal.

For example: if the employer can partially demonstrate underperformance (sub d) and there are also signs of a disrupted working relationship (sub g), but neither ground is individually fully met, the employer may use the combination ground. The court then assesses whether the circumstances in combination justify dissolution of the employment contract.

An important feature of the combination ground is the additional compensation. If the court dissolves the employment contract on the i-ground, it may award additional compensation of up to 50% of the statutory severance pay on top of the regular statutory severance pay (Article 7:671b lid 8 BW). This additional compensation reflects the fact that the dismissal is based on a combination of grounds rather than one fully demonstrated ground, which places the employee in a disadvantaged position.

In practice, courts have been cautious in applying the combination ground. It is not a catch-all that allows employers to dismiss employees without meeting any standard. The court still requires that the circumstances in combination make continuation of the employment genuinely unreasonable, and that the employer has acted as a good employer throughout.

The court procedure step by step

The court procedure for dissolution of an employment contract follows a structured process:

Step 1: Filing the petition (verzoekschrift)

Your employer files a written petition with the subdistrict court requesting dissolution of the employment contract. The petition must contain: a description of the dismissal ground(s), the factual basis and supporting evidence, a demonstration that reassignment is not possible, and any other relevant circumstances. The petition is submitted through a lawyer or legal representative (although this is not mandatory for the subdistrict court, it is strongly recommended).

Step 2: Receiving the petition

The court sends you a copy of the petition. You are informed of the hearing date and given time to prepare your defence. Typically, you have several weeks to prepare.

Step 3: Preparing your defence (verweerschrift)

You have the opportunity to submit a written defence in which you respond to the employer's claims, present your own evidence, and argue why the dismissal request should be rejected or why you should receive equitable compensation. You may also file a counter-request (tegenverzoek).

Step 4: The oral hearing (mondelinge behandeling)

Both parties attend a hearing at the subdistrict court. Each party presents their arguments, and the judge asks questions. Witnesses may be heard in some cases. The hearing is relatively informal compared to other court proceedings and typically lasts one to two hours.

Step 5: The decision (beschikking)

The court issues a written decision, usually within two to four weeks after the hearing. The decision addresses: whether the dismissal ground is sufficiently demonstrated, the end date of the employment (if dissolution is granted), the statutory severance pay, and any equitable compensation. The employer cannot appeal the interim step of paying severance: the severance pay is determined in the dissolution decision.

Step 6: Execution

If the court grants the dissolution, the employment ends on the date specified in the decision. The court determines the end date by taking into account the applicable notice period, reduced by the duration of the court procedure (with a minimum of one month). The employer must pay the statutory severance pay and any additional compensation awarded.

Your defence

As an employee, the court procedure gives you the opportunity to challenge the dismissal and present your side of the story. An effective defence strategy may include:

• Challenging the factual basis: disputing the employer's claims about underperformance, culpable conduct, or the disrupted relationship. Provide counter-evidence such as positive performance reviews, supportive emails, or testimony from colleagues.
• Procedural deficiencies: arguing that the employer failed to follow the required procedures, such as not offering an improvement plan (for underperformance) or not attempting mediation (for disrupted relationship).
• Reassignment not investigated: demonstrating that the employer failed to properly investigate reassignment possibilities, particularly in larger organisations with multiple departments or locations.
• Employer culpability: arguing that the employer's own actions contributed to or caused the situation, which may lead to equitable compensation.
• Requesting equitable compensation: if the employer's conduct was seriously culpable, requesting additional compensation beyond the statutory severance pay.
• Counter-request for reinstatement: in some cases, you may request that the court order your reinstatement rather than dissolution, although courts rarely grant this.

Legal representation is not mandatory before the subdistrict court, but it is strongly recommended. Employment law is specialised, and the court procedure involves strategic decisions that require expertise. An experienced employment lawyer can identify weaknesses in the employer's case and present your arguments most effectively.

Severance pay upon court dissolution

If the subdistrict court dissolves the employment contract, you are in principle entitled to the statutory severance pay (transitievergoeding). This right is established in Article 7:673 BW and applies regardless of the dismissal ground, with limited exceptions.

Calculation of the statutory severance pay

The statutory severance pay is calculated as one-third of a monthly salary per year of service. The calculation is proportional for incomplete years. The monthly salary includes the base salary, holiday allowance (vakantiegeld, 8%), fixed year-end bonus (dertiende maand), structural overtime, and other fixed salary components.

For example: if you have worked for 9 years and 6 months at a gross monthly salary of EUR 4,000 (including holiday allowance), the statutory severance pay would be: 9.5 x (1/3 x EUR 4,000) = 9.5 x EUR 1,333.33 = approximately EUR 12,667.

When no severance pay is awarded

The court may decide not to award the statutory severance pay in exceptional cases where the employee has acted seriously culpably (ernstig verwijtbaar). This is a high threshold and applies only to cases of serious misconduct such as theft, fraud, persistent refusal to work, or similar behaviour. The mere fact that the employer's dismissal request succeeds does not mean you acted seriously culpably.

Additional compensation on the i-ground

If the court dissolves the employment contract on the combination ground (i-ground), it may award additional compensation of up to 50% of the statutory severance pay. This additional compensation comes on top of the regular statutory severance pay and, if applicable, equitable compensation.

Equitable compensation (billijke vergoeding)

In addition to the statutory severance pay, the court may award equitable compensation (billijke vergoeding) under Article 7:671b lid 9 sub c BW if the dissolution is primarily the result of seriously culpable conduct or omissions by the employer (ernstig verwijtbaar handelen of nalaten van de werkgever).

When is equitable compensation awarded?

Equitable compensation may be awarded in situations where the employer:

• Created or deliberately escalated the situation that led to the dismissal request.
• Failed to provide the required support, training, or improvement plan before requesting dismissal for underperformance.
• Set up a sham improvement process that was designed to fail.
• Made unfounded accusations or conducted an inadequate investigation before claiming culpable conduct.
• Failed to address harassment, bullying, or an unsafe work environment.
• Suspended or isolated the employee without legitimate reason and then claimed a disrupted relationship.
• Violated reintegration obligations during illness.
• Acted in bad faith in other ways that caused or contributed to the dismissal situation.

How is the amount determined?

The amount of equitable compensation is determined by the court on a case-by-case basis. Following the landmark Dutch Supreme Court decision in New Hairstyle (ECLI:NL:HR:2017:1187), the court must consider all circumstances, including:

• The severity of the employer's culpable conduct.
• The consequences for the employee (loss of income, damage to career, pension loss).
• What the employee would have earned if the employment had continued (the expected duration of the employment).
• The employee's prospects on the labour market (age, education, specialisation).
• The statutory severance pay already awarded.
• Any other relevant circumstances.

Equitable compensation can be substantial. In practice, amounts range from a few thousand euros to over a year's salary, depending on the severity of the employer's misconduct and the consequences for the employee. There is no fixed formula or maximum.

Appeal options

If the subdistrict court's decision is unfavourable, you have the option to appeal. The appeal options in employment dismissal cases are:

Appeal to the Court of Appeal (hoger beroep)

Both the employer and the employee can appeal the subdistrict court's decision to the Court of Appeal (gerechtshof). The appeal must be filed within three months after the date of the decision. The Court of Appeal reassesses the case in full, including the facts and the legal assessment.

An important consideration: filing an appeal does not automatically suspend the dissolution. If the subdistrict court has granted the dissolution, the employment ends on the specified date, even if you appeal. However, if the Court of Appeal overturns the decision, it can order reinstatement or award additional compensation.

Cassation to the Supreme Court (cassatie)

After the Court of Appeal's decision, either party may file for cassation at the Supreme Court (Hoge Raad). Cassation is limited to questions of law; the Supreme Court does not reassess the facts. The deadline for filing cassation is also three months after the Court of Appeal's decision.

Provisional measures (voorlopige voorziening)

In urgent cases, you can request provisional measures from the court, for example to continue receiving salary during the appeal process. This is a separate procedure from the main appeal.

Settlement agreement as alternative

Even when the employer has filed a court petition, it is still possible to resolve the matter through a settlement agreement (vaststellingsovereenkomst). In fact, many court cases are settled before the hearing takes place or even during the hearing itself. Negotiating a settlement agreement during a court procedure can be advantageous for several reasons:

• Known legal position: once the petition is filed, both parties have a better understanding of the strength of each other's case, which enables more realistic negotiations.
• Control over the outcome: a settlement agreement gives both parties control over the terms, whereas a court decision may be less favourable for either side.
• Speed and costs: settling avoids the continuation of the court procedure, saving time and legal costs.
• Flexibility: a settlement agreement can include provisions that the court cannot order, such as agreed references, communication plans, and outplacement budgets.

If you receive a settlement agreement during a court procedure, have it reviewed carefully. The terms should reflect the legal position: if the employer's case is weak, you should negotiate a higher severance than the statutory minimum. If the employer's case is strong, a settlement agreement may still offer better terms than a court decision, particularly regarding agreed references and departure communication.

Practical tips

If you are facing a court procedure for dismissal, the following tips can help protect your rights:

• Engage a lawyer immediately: as soon as you receive a dismissal petition, seek legal representation. The deadline for submitting your defence is limited, and preparation requires time.
• Gather evidence: collect all relevant documents: your employment contract, performance reviews, correspondence with your employer, the improvement plan (if applicable), mediation reports, and any other evidence that supports your case.
• Respond to the petition in writing: submit a thorough written defence that addresses each of the employer's claims. The defence should not only rebut the employer's arguments but also present your own narrative of events.
• Request equitable compensation if appropriate: if your employer has acted culpably, explicitly request equitable compensation in your defence or counter-request. The court will not award it if you do not ask for it.
• Consider the combination ground: if the employer invokes the i-ground, be prepared for the court to award up to 50% additional compensation. This can work in your favour financially.
• Stay open to settlement: while preparing for the court hearing, remain open to negotiation. A well-timed settlement can be more advantageous than a court decision.
• Attend the hearing prepared: the oral hearing is your opportunity to present your case to the judge. Prepare your key arguments, anticipate the employer's position, and be ready to answer the judge's questions clearly and calmly.

Frequently asked questions

How long does the court procedure take?

The procedure from filing the petition to the court decision typically takes two to four months. The hearing is usually scheduled within a few weeks to two months after the petition is filed, and the decision follows within two to four weeks after the hearing. The exact timeline varies by court.

Do I need a lawyer for the court procedure?

Legal representation is not legally required before the subdistrict court. However, it is strongly recommended. Employment law is specialised, and the court procedure involves strategic decisions and legal arguments that benefit significantly from professional expertise. Most employees who participate without legal representation are at a significant disadvantage.

Can the court reject the employer's dismissal request?

Yes. The court independently assesses whether the dismissal ground is sufficiently demonstrated and whether the employer has met all requirements. Rejection is not uncommon, particularly for underperformance cases where the employer failed to follow a proper improvement process, or disrupted relationship cases where mediation was not attempted.

What is the difference between statutory severance pay and equitable compensation?

The statutory severance pay (transitievergoeding) is a standard payment that you are entitled to upon dismissal, calculated as one-third of a monthly salary per year of service. Equitable compensation (billijke vergoeding) is an additional payment that the court may award if the employer acted seriously culpably. The two are cumulative: you can receive both.

Can I appeal the court's decision?

Yes. Both the employee and the employer can appeal to the Court of Appeal within three months after the decision. The appeal does not automatically suspend the dissolution. If the Court of Appeal overturns the decision, it may order reinstatement or award additional compensation.

What if my employer offers a settlement agreement during the court procedure?

It is common for parties to negotiate a settlement agreement during the court procedure, even during the hearing itself. A settlement can be advantageous as it gives you control over the terms. However, make sure the agreement reflects your legal position and protects your unemployment benefit rights. Always have it reviewed by your lawyer before signing.