Doing Business in the Netherlands 2012 - American Chamber of ...

Doing Business in the Netherlands 2012
UWV. Consequently, dissolution proceedings serve as an alternative,
which – depending on the circumstances – can be preferred to a UWV
procedure.
The Cantonal Division of the competent court will dissolve the
employment contract only if there is a ‘serious cause’. A serious
cause may be an ‘urgent cause’ (i.e., reasons as described above) or a
‘change in circumstances’ which justifies dissolution.
Dissolution may be requested regardless whether the contract is fixedterm
or entered into for an indefinite period and even if the employee
is (for example) pregnant or sick. In principle, pregnancy and
sickness prohibit the employer from giving notice. However, even in
dissolution proceedings, the employer must be able to prove that the
request for dissolution is not in any way related to the employee’s
pregnancy or illness (or – for that matter – any other statutory
prohibition to give notice). Failure to meet this requirement can – in a
worst case scenario – results in the court denying the request for
dissolution.
In case of termination based on a change in circumstances, the
competent court may decide to award compensation to the employee
based on the principle of reasonableness. Whether such compensation
is awarded and how much is awarded depends on several
circumstances (e.g., the employee’s age, position, future prospects,
number of years of employment). Courts commonly use the
“Cantonal Court Formula” in calculating the level of severance pay: A
x B x C, where A is the number of weighed years of service, B is the
average gross monthly salary (including several fixed emoluments)
and C is the “adjustment factor.”
Until 1 January 2009, factor (A), the number of weighed years of
service, was calculated as follows: each year of service worked until
the age of 40 counted as 1; each year of service between the age of 40
and 50 counted as 1.5 and each year of service after the age of 50
counted as 2.
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