Indefinite Contract Termination Netherlands


Indefinite Contract Termination in Netherlands: What You Need to Know

Ending an employment contract is never easy, whether you are an employer or an employee. In the Netherlands, the process of terminating an indefinite employment contract can be complex, and there are specific legal requirements that must be followed to ensure that the termination is lawful and fair.

The Dutch law recognizes two types of employment contracts – definite and indefinite. A definite contract has a fixed end date, while an indefinite contract doesn`t. The latter is the most common and offers greater job security to employees.

Why terminate indefinite contracts in the Netherlands?

There can be various reasons for terminating an indefinite employment contract in the Netherlands. An employer may want to downsize the workforce due to business or economic reasons, or may need to terminate an employee due to poor performance, misconduct, or other reasons. Whatever the reason, it`s important to follow the legal process to avoid legal repercussions.

What are the legal requirements for indefinite contract termination in the Netherlands?

1. Notice period: The employer must give the employee notice of termination in writing. The notice period varies depending on the length of service, but it can range from one to four months.

2. Grounds for termination: The employer must have a valid reason for terminating the employment contract. The reasons for termination can be economic, behavioral or personal. If the employee has been with the company for more than two years, the employer must provide a valid reason for the termination.

3. Consultation: The employer must hold a consultation meeting with the employee before the termination to discuss the reason for the termination and explore alternative solutions.

4. Severance payment: If the employee has been with the company for more than two years and the employer is terminating the contract without a valid reason, the employer must pay a severance payment. The amount of the payment is determined based on the length of service and salary.

What happens if the termination is not lawful?

If the employer fails to follow the legal process for terminating an indefinite contract, the employee may take legal action against the employer. This can lead to costly and time-consuming legal proceedings.


In summary, terminating an indefinite employment contract in the Netherlands can be complex, and employers must follow the legal requirements to avoid legal repercussions. Employers must give notice, have a valid reason for the termination, hold a consultation meeting, and pay a severance payment if required. By following these legal requirements, employers can ensure that the termination process is fair and lawful.

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