UWV dismissal permit

The UWV dismissal permit is an authorisation from the UWV that the employer needs in order to terminate the employment contract on grounds of business economic reasons or long-term incapacity for work. In this article you will learn when the permit is required, how the procedure works and how you as an employee can mount a defence.

When is a UWV dismissal permit required?

The employer needs a UWV dismissal permit in two situations:

1. Business economic reasons

These include:

• Reorganisation or restructuring
• Poor financial situation of the company
• Reduced workload or decline in turnover
• (Partial) closure of the business
• Technological changes causing positions to become redundant
• Relocation of the business

2. Long-term incapacity for work

If an employee has been ill for more than 2 years, the employer can apply for a dismissal permit. All of the following conditions must be met: recovery is not expected within 26 weeks, there is no possibility of structural return to work in the employee's own or an adapted role, redeployment to another suitable position is not possible (including with the help of training) and the employer has fulfilled all reintegration obligations.

The UWV procedure step by step

The UWV procedure is conducted in writing and consists of the following steps:

1. Application by the employer — the employer submits a dismissal application via the UWV employer portal. The application contains a substantiation of the grounds for dismissal, the selection of employees (in the case of business economic reasons) and the substantiation of redeployment efforts.
2. Acknowledgement of receipt and preliminary check — the UWV checks whether the application is complete. If not, the employer is given the opportunity to supplement the application.
3. Defence round 1 — you receive the application and are given 14 days to submit a written defence.
4. Employer's response — the employer may respond to your defence.
5. Possible defence round 2 — the UWV may schedule a second round of hearing and counter-hearing if deemed necessary.
6. Decision — the UWV reaches a decision. The UWV aims for a processing time of 4 to 8 weeks after receipt of the complete application, but in complex cases or where a second defence round is held, the procedure may take longer (8 to 12 weeks or more).

Dismissal on business economic grounds

In the case of dismissal on business economic grounds, the UWV assesses the following points:

Substantiation of business economic necessity

The employer must demonstrate that there is a business economic necessity to eliminate positions. This must be substantiated with financial data (annual accounts, forecasts, order portfolio).

Reflection principle (afspiegelingsbeginsel)

The employer must correctly apply the reflection principle (afspiegelingsbeginsel). This works as follows:

1. Determine which positions are interchangeable
2. Divide employees in the interchangeable position into five age groups: 15 to 25, 25 to 35, 35 to 45, 45 to 55, and 55 and older (the lower limit falls within the group, the upper limit does not)
3. Dismiss employees proportionally per age group, in principle starting with the employee with the shortest length of service (exceptions include, among others, indispensable employees, employees with a disability and situations involving temporary agency workers or payroll employees for which different rules apply)

Redeployment efforts

The employer must demonstrate that there are no possibilities to redeploy you to another suitable position within the company or the group, including with the help of training.

Dismissal on grounds of long-term incapacity for work

In the case of dismissal after 2 years of illness, the UWV assesses:

• The employee has been incapacitated for work for more than 104 weeks (2 years)
• Recovery is not expected within 26 weeks
• The employee cannot be redeployed in adapted or other suitable work
• The employer has fulfilled the reintegration obligations
• There is a current assessment by the company doctor

Mounting a defence as an employee

As an employee, you have the right to mount a defence against the dismissal application. A strong defence is essential to protect your position.

Grounds for defence in case of business economic dismissal

• Challenge the business economic necessity — are the financial data correct? Is there genuinely a necessity to eliminate positions?
• Challenge the reflection principle — has the reflection principle (afspiegelingsbeginsel) been correctly applied? Have the correct positions been identified as interchangeable?
• Challenge the redeployment efforts — has the employer made sufficient efforts to redeploy you?
• Dismissal ban — does a dismissal ban apply? For example in the case of illness or pregnancy.

Grounds for defence in case of long-term incapacity for work

• Challenge the prognosis — recovery is in fact expected within 26 weeks (supported by medical advice)
• Redeployment possibilities — there are suitable positions available that have not been offered
• Insufficient reintegration — the employer has not fulfilled the reintegration obligations

Decision by the UWV

The UWV can reach two decisions:

Permit granted

The UWV grants the dismissal permit. The employer may terminate the employment contract subject to the notice period. The procedure time at the UWV may be deducted from the notice period, whereby in principle a minimum of 1 month notice period must remain (article 7:672(5) of the Dutch Civil Code).

Permit refused

The UWV refuses the dismissal permit. No formal objection or appeal is available to the employer against a UWV refusal. However, the employer may submit a dissolution request to the subdistrict court (kantonrechter), which will assess the case independently (article 7:671b(1)(b) of the Dutch Civil Code).

After the dismissal permit

After the permit has been granted, the employer has 4 weeks to terminate the employment contract (article 7:671a(6) of the Dutch Civil Code). If the employer does not give notice within this period, the permit lapses. Upon termination, you are entitled to:

• The statutory notice period (minus the UWV procedure time, minimum 1 month)
• The transition payment (transitievergoeding)
• Unemployment benefits (provided you meet the requirements)

Objection and appeal

No formal objection or administrative appeal is available against the UWV's decision. However, you can have the decision reviewed indirectly: after the employer gives notice of termination, you can bring the matter before the subdistrict court (kantonrechter), which will assess the grounds for dismissal independently. You have the following options:

Proceedings before the subdistrict court

After termination by the employer (with UWV authorisation) you can submit a request to the subdistrict court (kantonrechter) within 2 months to:

• Have the termination annulled (reinstatement of the employment contract)
• Claim a fair compensation (if the employer has acted in a seriously culpable manner)

Request for higher compensation

If the transition payment has been calculated incorrectly, you can claim the correct amount through the subdistrict court (kantonrechter). In addition, you can claim a fair compensation, but only if the employer has acted or failed to act in a seriously culpable manner. The mere fact that you consider the payment too low is insufficient grounds for a higher compensation through the court.

Alternative: settlement agreement

In practice, many employers offer a settlement agreement as an alternative to the UWV procedure. Advantages of a settlement agreement compared to the UWV procedure:

• Faster — a settlement agreement can be arranged within days, whereas the UWV procedure takes weeks
• Negotiable — the compensation and conditions are freely negotiable
• Compensation negotiable — the compensation in a settlement agreement depends on the employer's file and your negotiating position. It may be equal to, lower than, or higher than the statutory transition payment
• Additional arrangements — you can make arrangements regarding exemption from work, letter of reference, legal costs and more

Practical tips

1. Take your defence seriously — the defence at the UWV is your opportunity to challenge the dismissal application. Devote sufficient time and attention to it.
2. Seek legal assistance — a legal specialist or employment lawyer can draft and strengthen your defence.
3. Check the reflection principle — in the case of business economic dismissal, errors are regularly made in the application of the reflection principle (afspiegelingsbeginsel).
4. Consider a settlement agreement — sometimes a settlement agreement is more advantageous than the UWV procedure. Always have the agreement reviewed.
5. Pay attention to deadlines — you have 14 days for your defence at the UWV and 2 months for proceedings before the subdistrict court (kantonrechter) after termination.
6. Keep all documents — save the dismissal application, your defence and all correspondence carefully.

Frequently asked questions