Netherlands EOR & PEO

The procedure for terminations in the Netherlands is highly complex and can be difficult to navigate for foreign organizations. In short, employers have several options:

• Terminating the employment by mutual agreement between employer and employee.
• Taking the case to the UWV (Employee Insurance Agency)
• Taking the case to the cantonal court.
• Urgent dismissal

The majority of employers aim to terminate by mutual consent, as this is the simplest and fastest route in most cases.

Sometimes, severance payments may be necessary. For example, if an employee has been with a company for over two years, they are entitled to one-sixth of monthly salary per half-year of employment for the first ten years. For ten years or more of service, employees are entitled to one-quarter of monthly salary per half-year of employment. Older employees (over 50 years old) may be entitled to even larger severance payments. The limit is generally €75,000, but additional payments may be awarded by the court if the dismissal is deemed to be unjust.

Due to the complexity of Dutch terminations and severance laws, and the potentially large payouts, it is important that you fully understand the relevant laws when expanding into the Netherlands.

Navigating employee terminations and handling severance packages can be complicated for companies expanding overseas for the first time. Horizons’ Netherlands EOR can mitigate risk for foreign companies and provide guidance through this process.