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Dismissal process

Dismissal process. Legal requirements in The Netherlands. Avvocati Ius Lavoristi Italiani Congresso Nationale, Genova, 19-20 September 2014. The employer who intends to terminate an employment contract has four options:.

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Dismissal process

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  1. Dismissal process Legal requirements in The Netherlands Avvocati Ius Lavoristi Italiani Congresso Nationale, Genova, 19-20 September 2014

  2. The employer who intends to terminate an employment contract has four options: • Obtain prior permission to give notice from the Social Security Institution (UWV); • Request the Court to rescind the employment contract; • Termination for urgent cause; • Reach mutual consent with the employee in the form of a settlement agreement Options 1, 2 and 3 will be explained in the next slides

  3. Approval by UWV Submit written application for a dismissal permit at the UWV -> must contain the dismissal ground + supporting documentation Possibility employee to submit statement of defens • Dismissal committee considers if there is a reasonable ground: • the employee’s incompetence or misconduct; • the economic reasons -> are the ‘principle of reflection’ and ‘seniority principle’ properly applied • Severe and prolonged disturbance of the labour relationship Approval: notice of termination < 5 years 1 month > 5 years - < 10 years 2 months > 10 years - < 15 years 3 months > 15 years 4 months if the noticeperiod is notrespected the employee can claim compensation Rejection: Remains employed The is no appeal possibleagainst the decision of the UWV Manifestly unreasonable dismissal; employee can start legalproceedingsclaimingthatdismissal was ‘manifestlyunreasonable”. Ifso, the employer must compensate the actualdamageincurredby the employee End contract The UWV is not in a positiontoimpose severance pay

  4. Termination of the employment contract without prior UWV consent is void, except: • Dismissal during a probationary period • Termination by mutual consent • Dismissal due to an urgent cause • Bankruptcy • Fixed term contracts expiring by operation of law • Resignation by the employee • Rescission by the Court

  5. Ask permission Cantonal court • Court: • Employer: Request for rescission due to an “important reason” • Employee: File a statement of defens • Oral hearing • Decision Request sustained: end contract Requestdenied: no termination of contract No possibilityto appeal! The amount of severance pay is calculated on the basis of a judicialformula: A (weighedyears of service) x B (grosspayment per monthx C (correction factor) A is years of service until the age of 35 count for 0.5; between 35 and 45 for 1; between 45 and 55 for 1.5 and as from 55 for 2. B is the gross payment per month, including other fixed elements of remuneration, such as holiday allowance, 13th month and average bonus (if structural) C is correction factor. If neither party is to be blamed for termination it will be set at 1. If the employer is to blame it will be adjusted upwards, while it will be adjusted downwards when the employee is to blame.

  6. Termination due to an urgent cause • No UWV permit is required • Has immediate effect • Without notice period • Requirements: Means conduct or characteristics of the empoyeewhich the employercannotreasonablyberequiredtoallow, such as fraud, theft etc. Urgent cause: serious misconduct Communicatedto employee as soon as possible (preferablywriting) afterhavinggiven the employee the opportunity todefend/respond End of contract Court Request sustained Termination is void

  7. Changes in dismissal law as of July 2015 • Under the proposed legalisation the employer can no longer freely choose between submitting a termination request to the court or the UWV. The ground for termination will be decisive in determining which procedure must be followed. • The new procedure allows parties to appeal UWV or court decisions to a higher court • Where an employment contract has lasted for at least two years, the employer must pay a transition budget to the employee if the employee’s termination is involuntary (regardless of the dismissal route) or if a temporary contract is not extended Transition budgets serve as a compensation for termination of an employment contract and as assistance to transition an employee to alternative employment. The transition budget amounts the first ten years 1/3 of a monthly salary for each year of service. After these ten years the transition budget amounts to ½ of a monthly salary for each year of service. A transition budget cannot exceed € 75,000.

  8. Employer’s decision to terminate • Economical • Technical • Organisational • Long term disability (> 2 years) Reasons related to the ‘person’ of the employee • Court • Termination • Compensation • Reinstatement • Nullification UWV Approval: Notice period No approval: Remains employed Termination with/without additional compensation No termination: remains employed New: court New: Court of appeal

  9. Changes in dismissal law as of July 2015 If the employer and employee agree to terminate their employment relationship by mutual consent, a mandatory two weeks reflection period will apply, during which the employee can revoke his or her consent to the termination of employment without reason. Accepts: End contract Initiative employer Termination agreement Employee 14days reconsider Withdraws: UWV/court

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