Dismissal permit

In almost all cases the termination of an employment contract requires a dismissal permit. Such a permit must be applied for at the Centre for Work Income, Centrum voor Werk Inkomen (CWI), formerly known as the Regional Director for Employment.The CWI can grant permissions only on a limited number of grounds. It must involve dysfunctioning, prudential financial circumstances, termination of the business, or continued unfitness for work for a period of at least 2 years.

Before deciding about the application, the CWI always needs to hear the employee involved first. In the application for a dismissal permit is submitted for reasons of prudential financial circumstances, the CWI may waive hearing the employee if that particular employee has signed a "Declaration of No Objection".

It is important that an application for a dismissal permit is drawn up and submitted prudently. The application must be carefully substantiated. Once the application has been submitted, chances are that the relationship with the employee may suffer. If then the application is rejected, the fat is in the fire.

When an application for reasons of prudential financial circumstances is submitted, the CWI will also need e.g. a recent profit-and-loss account, a specified list of all employees in the employment of the employer, proof that seniority has been taken into account and a substantiated projection for the future.

In his defence, an employee may demand that the CWI sets conditions to a possible granting of a dismissal permit. One of those conditions may be that, for the next six months, the employer shall not hire any employees other than those employees for whom dismissal permits have been granted.

Only when the dismissal permit has been granted does the employer have permission to send out the official notice. This is the moment the term of notice starts. The term of notice is the term agreed upon between the parties. If the parties have not agreed on a term of notice, the legal term of notice shall apply. The term of notice is shorted by a month when the CWI has granted a dismissal permit but can never be shorter than one month.

Redundancy scheme

As soon as the employment contract ends because the term of notice has lapsed, employer and employee can usually go their separate ways. It is not a matter of course that an employer is then obliged to pay for a redundancy scheme for the employee. However, if the employee has been in the employer's service for many years, s/he may claim compensation with the district court for "obviously unreasonable termination". It is important for the employer to anticipate such a claim.