What is the process for terminating an employment contract in the Netherlands? Your rights and obligations

Terminating an employment contract in the Netherlands is a process governed by both labor laws and industry practices. Although the Dutch employment system is considered flexible, this does not mean that an employer or employee can terminate the contract overnight. In this article, we explain the procedure for terminating a contract in the Netherlands, the notice periods involved, the formalities that must be fulfilled, and what to expect depending on the type of contract.

Types of employment contracts in the Netherlands

Before we move on to the rules regarding termination, it’s important to understand that there are two basic types of employment contracts in the Netherlands:

1. Fixed-term contract – entered into for a specific period, e.g., 6 months or 1 year.
2. Open-ended contract – without a specified end date for employment.

The rules for termination vary depending on the type of contract. Fixed-term contracts expire automatically, but they can also be terminated early under certain conditions. Permanent contracts require a formal termination process—initiated by either the employee or the employer.

Resignation by an employee: what you need to know

If you are an employee and wish to resign from your job, you must submit a written notice of resignation, observing the required notice period. In most cases, this period is one month, unless your employment contract or collective bargaining agreement (CBA) specifies otherwise. It is important to carefully review these provisions—some industries require a 2- or even 3-month notice period.

The notice of resignation should be in writing—preferably via email or registered mail. Although the law does not require you to justify your decision, stating your reasons may help maintain good professional relationships and secure a reference.

Once notice of termination has been given, it cannot be withdrawn without the employer’s consent. The employee is required to work out the notice period unless they are released from this obligation. Otherwise, they may be subject to a contractual penalty (if provided for in the contract) or lose part of their pay.

Termination by the employer—what are the rules?

If the employer wishes to terminate the employment relationship, much stricter rules apply. Dutch labor law protects employees against sudden or unjustified loss of employment. An employer may terminate the contract only in specific situations, such as:

• job cuts for economic reasons,
• long-term inability to work (more than 2 years),
• serious breach of duties by an employee,
• an irreconcilable conflict,
• loss of licenses or certifications required to perform the job.

For a termination to be legal, the employer must obtain approval from the UWV (the Dutch employment agency) or the labor court—the choice of procedure depends on the reason for terminating the contract. If the position is being eliminated for economic reasons, the procedure is handled by the UWV, whereas in cases involving personal or disciplinary matters, it is handled by the court.

An exception is termination by mutual agreement—in such cases, the employer and employee sign a so-called vaststellingsovereenkomst, or a voluntary termination agreement. This is a commonly used solution that allows one to avoid formal procedures and retain the right to unemployment benefits.

Notice period—how long do you have to work?

The standard notice period in the Netherlands depends on the length of employment and on who is terminating the contract:

• Employee – typically 1 month, unless otherwise specified in the contract.
• Employer - the notice period depends on the length of the employment relationship:
  • 1 month – if employment lasted less than 5 years,
  • 2 months – from 5 to 10 years,
  • 3 months – from 10 to 15 years,
  • 4 months – more than 15 years.

The notice period may be shortened or extended only if this is specified in the employment contract or the collective bargaining agreement (CAO); however, the notice period for the employee may not be longer than that for the employer, unless the difference is compensated financially.

Severance pay and benefits following termination of employment

An employee whose contract has been terminated by the employer (except in cases of employee fault) may be entitled to a severance payment. Since 2020, every employee has been entitled to this payment from the first day of employment—regardless of the type of contract or length of service.

The severance pay amounts to 1/3 of the monthly salary for each year of service. For shorter periods of employment, the severance pay is calculated proportionally.

Additionally, after the contract ends, the employee may apply for unemployment benefits provided that:

• has worked for at least 26 of the last 36 weeks,
• did not leave their job through their own fault (i.e., did not voluntarily resign without a valid reason),
• is available for work and actively seeking employment.

Immediate termination of the contract

Both the employer and the employee may terminate the employment contract with immediate effect for “good cause.” This may include, for example, theft, fraud, violence, threats, or a serious breach of safety regulations.

Summary from Bonapi

Terminating an employment contract in the Netherlands involves specific procedures designed to protect both parties—the employee and the employer. Understanding the rules for terminating a contract will help you better plan changes in your career and protect your interests. The Dutch labor market is based on dialogue and formal procedures, so it’s worth knowing how to navigate it—whether you’re leaving your job on your own initiative or as a result of your employer’s decision.