Employment, Pensions & Incentives
Dutch law is quite employee friendly and dismissal due to poor performance is subject to a number of legal requirements. Those legal requirements for a legally valid dismissal are established to protect employees from possible arbitrary decisions from the employer. A Dutch employer has room to make its own decisions, even if they are detrimental to employees. However, such decisions must be verifiable, in retrospect.
An employer may not unilaterally dismiss an employee due to underperformance without initiating a court procedure. The employer must request the court to dissolve the employment agreement and must be able to justify to the court how it has reached its decision to terminate the employment.
For a successful court procedure for dismissal due to underperformance, the employer must be able to demonstrate the following:
The employer must inform the employee specifically where it feels the problem lies and, if there is reason to do so, give the employee the opportunity to improve his or her performance, i.e. in line with the employer's expectations. This can be done by e.g. initiating a performance improvement plan (PIP). It is advisable to record these steps.
Moreover, with regard to answering the question of whether an employee is performing inadequately, the court will often assess the job requirements laid down in the job description. The job requirements, required skills and necessary results must have been made known to the employee. If that is not clear, for example due to the lack of a clear job description, it will be more challenging for the employer to prove why the employee is underperforming. Moreover, the poor performance must not have been caused by insufficient care in training the employee.
The Supreme Court, the highest court of the Netherlands, has ruled that it is not necessarily required that the facts and circumstances regarding the underperformance are proved incontrovertible, but that it is sufficient that these are sufficiently plausible.
The question then rises when something is sufficiently plausible. This is usually the case if interview reports or e-mails show that the employer and employee have discussed the employee's performance, and that the employer has indicated very specifically where the employee's performance needs to be improved. If it is then also plausible, again by means of reports or emails, that the employee - despite a thorough improvement process in which the employer has offered its help - has not been able to improve his or her performance, the road to dismissal is open, unless the employee's unsuitability for the job follows from an illness or if the employer itself has made quite a few mistakes and has thus acted culpably.
In practice, the dissolution procedure due to underperformance has a high rejection rate compared to other grounds for dismissal. Therefore, termination by mutual consent is advisable in most cases rather than requesting the court to dissolve the employment. However, whether or not the employee is willing to render its consent, will likely depend on several factors e.g. the offered severance payment and the strength of the case file – which in its turn is established by the requirements 1-6 above. Therefore, it is important to act with due care and thoroughly prepare the performance improvement process.
Our recommendations for the employer:
Our exact advice will vary from case to case. Are you facing an underperforming employee and are you unsure about the right steps to take? In that case, feel free to contact us. We are more than happy to assist with assessing the best way forward.
