Dismissal Procedure via UWV or Subdistrict Court: The Differences

As an employer, you cannot simply dismiss an employee. The Netherlands has a preventive dismissal system: you need permission from the UWV or the subdistrict court. But when do you choose which route? And what are the differences? In this article, we explain it clearly.

The Dutch dismissal system

In the Netherlands, dismissal is only possible via one of the following routes:

• Dismissal by mutual consent: Employer and employee agree to a termination (settlement agreement)
• Dismissal via UWV: Dismissal permit for commercial reasons or long-term illness
• Dismissal via subdistrict court: Dissolution request for all other reasons
• Summary dismissal: For an urgent reason
• During the probationary period: Without permission or stating reasons

Statutory grounds for dismissal: Art. 7:669 BW

The law has a closed system of grounds for dismissal. This means an employer can only terminate an employment contract based on the grounds listed in Art. 7:669 BW. Below is an overview of all nine grounds for dismissal:

1. Commercial reasons (a-ground): Redundancy of jobs due to commercial circumstances, such as a reorganisation, business closure or structural reduction in work.
2. Long-term incapacity for work (b-ground): The employee has been ill for more than two years and recovery is not expected within 26 weeks, not even in an adapted role.
3. Frequent sickness absence (c-ground): The employee is frequently absent and this has unacceptable consequences for business operations, while recovery is not expected within 26 weeks.
4. Underperformance (d-ground): The employee is unsuitable for the contracted work, provided the employer has informed the employee of this in a timely manner and has offered sufficient opportunity for improvement.
5. Culpable act or omission (e-ground): The employee has acted or failed to act in such a culpable manner that the employer cannot reasonably be expected to continue the employment contract.
6. Refusal to work on grounds of conscientious objection (f-ground): The employee refuses to perform the contracted work due to a serious conscientious objection, and it is not possible to perform the work in an adapted form.
7. Damaged working relationship (g-ground): The working relationship is so damaged that the employer cannot reasonably be expected to allow the employment contract to continue.
8. Other circumstances (h-ground): A residual ground for situations not covered by the other grounds, such as the employee's detention or lack of a work permit.
9. Cumulative ground (i-ground): Since the Balanced Labour Market Act (WAB) came into effect on 1 January 2020, it has been possible to combine two or more incomplete grounds (from categories c, d, e, g and h (the f-ground is excluded)) to form a complete ground for dismissal.

The choice of dismissal route is directly linked to the applicable ground. The a-ground and b-ground mandatorily lead to the UWV. Grounds c to h are submitted to the subdistrict court. The i-ground (cumulative ground) is also assessed by the subdistrict court, as it concerns a combination of personal grounds.

When to go to the UWV?

The UWV route is mandatory for:

• Commercial reasons: Reorganisation, poor financial situation, reduction in work
• Long-term incapacity for work: The employee has been ill for more than 2 years and recovery is not expected

For these grounds, you cannot go to the subdistrict court; the law prescribes the UWV route.

The UWV procedure step by step

1. Submit application: You submit a dismissal application to the UWV with substantiation
2. Completeness check: The UWV checks if the application is complete
3. Employee's defence: The employee is given 2 weeks to respond
4. Possible second round: Sometimes a further round of hearing both sides follows
5. Decision: The UWV decides, usually within 4-8 weeks
6. Termination: With permission, you can terminate the employment contract

UWV procedure timeline

The total turnaround time for a UWV procedure is on average four to six weeks, depending on the complexity of the case and whether a second round is necessary. The timeline generally proceeds as follows:

• Day 1: The employer submits the dismissal application with full substantiation (commercial figures or medical documentation).
• Within a few days: The UWV forwards the request to the employee.
• 14 days: The employee is given two weeks to submit a written defence.
• Optionally 14 extra days: In a second round, both parties are given another two weeks.
• Decision: The UWV makes a decision, usually within four to six weeks of submission.
• After permission: The employer can terminate the employment contract, observing the notice period, from which the procedure time may be deducted (with a minimum of one month remaining).

When to go to the subdistrict court?

The subdistrict court has jurisdiction for all other grounds for dismissal:

• Underperformance: The employee is not performing satisfactorily
• Culpable act: Seriously culpable conduct by the employee
• Damaged working relationship: The relationship is irreparably damaged
• Regular sickness absence: Frequent short-term absence with unacceptable consequences
• Conscientious objections: The employee cannot perform the work due to conscientious objections
• Other circumstances: Residual category for special situations
• Cumulative ground: Combination of incomplete grounds

The subdistrict court procedure step by step

1. Petition: The employer submits a petition
2. Statement of defence: The employee responds in writing
3. Oral hearing: A hearing where both parties are heard
4. Order: The judge issues a ruling, usually within 4-8 weeks
5. Appeal: An appeal can be lodged against the order

Subdistrict court procedure timeline

The subdistrict court procedure takes an average of eight to twelve weeks. The timeline is structured as follows:

• Week 1: The employer's lawyer submits the petition to the district court.
• Weeks 4 to 6: The employee (or their lawyer) submits a statement of defence. The court registry schedules a hearing date.
• Weeks 6 to 10: The oral hearing takes place, usually two to four weeks after the statement of defence is submitted.
• Weeks 8 to 12: The subdistrict court issues a ruling (order), usually within two to four weeks after the hearing.
• Appeal: An appeal against the order can be lodged with the Court of Appeal. The time limit for this is three months from the date of the order.

Comparison: UWV and subdistrict court

The cumulative ground (i-ground)

Since 1 January 2020, dismissal law has included the so-called cumulative ground, introduced by the Balanced Labour Market Act (WAB). Before then, an employer had to have a fully complete ground for dismissal. If the employer could not demonstrate that all requirements of a single ground were met, the dissolution request was rejected.

The i-ground makes it possible to combine two or more incomplete grounds from categories d, e, g and h. For example, consider an employee who is partially underperforming (d-ground) and where the working relationship has also become somewhat damaged (g-ground). Separately, these grounds are insufficient, but in combination, they can justify a dissolution.

An additional payment is attached to a successful claim on the i-ground: the subdistrict court can award an additional payment of up to 50% on top of the statutory transition payment. This is to compensate for the fact that the employer has not demonstrated a fully complete ground.

In practice, judges apply the i-ground with caution. It is not enough to simply add up several weak grounds. The judge expects the combination of circumstances to be such that the continuation of the employment contract can no longer reasonably be expected. For current case law on the cumulative ground, we refer you to rechtspraak.nl.

Summary dismissal

Summary dismissal is the most drastic form of dismissal and may only be given for an urgent reason. It involves the immediate termination of the employment contract, without a notice period and without prior permission from the UWV or the subdistrict court.

A legally valid summary dismissal is subject to three cumulative requirements:

1. Urgent reason: There must be conduct so serious that the employer cannot reasonably be expected to allow the employment contract to continue any longer. Examples include theft, fraud, repeated refusal to work, threats or violence in the workplace.
2. Immediate notice: The dismissal must be given immediately after the urgent reason has become known. Delay, for example to first seek legal advice, is only permissible to a limited extent.
3. Immediate communication: The reason for the dismissal must be communicated to the employee at the same time as the notice of dismissal.

The risks of an invalid summary dismissal are significant. If the subdistrict court annuls the dismissal, the employer owes the full salary from the moment of dismissal, plus the statutory increase. In addition, the employee may be entitled to the transition payment and fair compensation. Our advice is therefore to always consult an employment lawyer before proceeding with a summary dismissal.

The transition payment

In case of dismissal via the UWV or subdistrict court, the employee is entitled to a transition payment. This also applies if the employee has acted in a seriously culpable manner, unless it is so serious that the judge sets the payment to zero.

The transition payment amounts to 1/3 of a month's salary per year of service. In cases of seriously culpable conduct by the employer, the judge can award additional fair compensation.

Common mistakes in dismissal cases

In our employment law practice, we regularly see these mistakes:

1. Insufficient file-building

In cases of underperformance, you must be able to demonstrate that you warned the employee in a timely manner, offered a performance improvement plan, and gave the employee a fair chance. Without a good file, the dissolution request will be rejected.

2. Forgetting about redeployment

Before you can dismiss an employee, you must investigate whether redeployment to another position is possible. This applies to all grounds for dismissal.

3. Choosing the wrong dismissal route

A dissolution request to the subdistrict court for commercial reasons will be rejected. You must go to the UWV for that.

4. Proceeding too quickly with summary dismissal

Summary dismissal is a last resort. The bar is set high and the risks are significant if the dismissal is annulled.

5. Negotiating without a plan

Many employers enter into negotiations about a severance package too quickly, without a clear plan or alternatives. This weakens your position.

The settlement agreement as an alternative

In practice, most employment contracts are terminated by mutual consent, recorded in a settlement agreement. This has several advantages:

• Quicker and more certain than a procedure
• No litigation risk
• More flexibility in the arrangements
• Less damage to the working relationship and reputation

With a well-drafted settlement agreement, the employee retains their right to unemployment benefits (WW). Please note: the employee has a 14-day cooling-off period to withdraw their signature.

Tips for employers

1. Start building a file early - Don't wait until you want to dismiss someone
2. Document everything in writing - Emails, meeting notes, warnings
3. Seek legal advice in good time - Better too early than too late
4. Investigate redeployment options - This is a requirement
5. Consider mediation for a damaged working relationship
6. Be realistic about costs and time - A procedure costs money and attention

Frequently asked questions

How long does a dismissal procedure take?

That depends on the chosen route. A UWV procedure takes an average of four to six weeks. A procedure at the subdistrict court usually takes eight to twelve weeks. A settlement agreement can be finalised within one to four weeks, provided both parties are willing to cooperate.

Can I dismiss an employee without a reason?

No. The Netherlands has a closed system of grounds for dismissal. An employer must always have a statutory ground to dismiss an employee. The only exception is dismissal during the probationary period, for which no reason needs to be given.

What does a dismissal procedure cost?

At the UWV, the procedure itself is free of charge; no court fees are payable. At the subdistrict court, the petitioner pays court fees (approximately €300 to €700, depending on the nature of the case). In both cases, the costs of legal assistance are additional, unless you conduct the procedure yourself. The total costs depend heavily on the complexity and duration of the dispute.

Can I dismiss multiple employees at the same time?

Yes, that is possible for commercial dismissals via the UWV. However, bear in mind that if you dismiss twenty or more employees within a three-month period, the Collective Redundancy (Notification) Act (WMCO) applies. You are then obliged to notify the UWV in advance and consult the relevant trade unions.

What if the employee does not cooperate with a settlement agreement?

If the employee does not agree to a severance package, the formal dismissal route via the UWV (for commercial reasons or long-term illness) or the subdistrict court (for personal grounds) remains. You cannot force an employee to sign a settlement agreement.

Conclusion

The choice between the UWV and the subdistrict court depends on the ground for dismissal. For commercial reasons or long-term illness, the UWV route is mandatory. For personal grounds such as underperformance or a damaged working relationship, you go to the subdistrict court.

In all cases, good preparation is crucial. A rejected dismissal application costs not only money but also time and energy. Therefore, seek timely advice from an employment law specialist.