Employment relationships can come to an end for a variety of reasons, such as an employee quitting, being fired, or being made redundant. In the Netherlands, employees and employers can also come to a mutual agreement to end their employment.
Whatever the situation, there are specific rules and regulations that apply to the end of an employment relationship. In this guide, we’ll take you through some of the most important things you should know before hiring in the Netherlands, including notice periods for both employers and employees, the rules around termination of employment contracts, and the post-termination restrictions you can impose on your employees.
In the Netherlands, employers have to give notice when they want to dismiss an employee, and employees have to give notice when they resign. The specific period of notice for either party might be different depending on the collective labour agreement that applies and the employee’s contract.
The statutory notice period for an employee in the Netherlands is one month. That means that an employee has to give notice at least one month before their planned end date when they leave their job. An employer and an employee can agree on a shorter or longer notice period, which should be explicitly stated in the employment contract. However, it can’t be longer than six months. If the employee’s notice period is more than one month, the employer’s notice period has to be at least twice as long.
The length of the notice period an employer in the Netherlands has to give an employee depends on their length of service. The statutory notice periods are:
Collective labour agreements can provide for shorter notice periods. Also, notice periods can be longer than four months if both parties agree, but can’t be more than six months.
Fixed-term contracts end on a fixed date, which means they don’t have a notice period. However, employers in the Netherlands have to inform employees on fixed-term contracts if they don’t want to renew their contracts. They should do this in writing at least one month before the end date.
There is no need for either party to give notice in the following circumstances:
If an employer in the Netherlands fails to give their employee the correct notice, they might have to pay them compensation. This amounts to the total the employee would have earned for working their notice period, which means it is equal to at least one month’s salary.
Severance pay in the Netherlands is known as a ‘transition payment,’ and it must be paid when either:
Employees are entitled to a transition payment from their first day of employment. However, employers only have to pay this when their employee doesn’t agree with the dismissal.
The amount employers have to pay depends on the employee’s monthly salary and length of service. You can calculate the transition payment you would have to pay an employee by dividing their total gross monthly salary by three and then multiplying that figure by the number of years they have worked for you.
For example, an employee who earned EUR 3,000 per month and had worked for you for a total of 4 years would be entitled to a transition payment of EUR 4,000. The maximum amount for a transition payment is EUR 94,000 as of 2024.
Termination of employment in the Netherlands is only permissible in certain circumstances, in accordance with Dutch employment law. There are also specific rules that employers need to follow to make sure the termination process is fair.
Valid reasons for termination of employment in the Netherlands
In the Netherlands, the following are considered valid reasons for dismissing an employee:
Employers can also dismiss their employees for a combination of the reasons listed above.
Different ways to terminate an employment contract in the Netherlands
In the Netherlands, employees have to agree to a dismissal. If they do, there are two options:
Once an employee has given their agreement for a termination of employment in the Netherlands, they have 14 days to reconsider. If they change their mind, they can revoke their consent without giving a reason.
If the employee doesn’t agree to the dismissal, things are a bit more complicated for the employer. They can still dismiss the employee, but they need the approval of the Employee Insurance Agency or the sub-district court, depending on the grounds for the dismissal. Specifically, the Employee Insurance Agency handles dismissals on the grounds of economic reasons or long-term incapacity, and the sub-district court handles all other reasons such as unsatisfactory performance or conflict between the employer and the employee.
Post-termination restraints are restrictions an employer can impose on their employees’ actions after they leave their employment. The idea is to protect your business by preventing ex-employees from poaching staff, soliciting customers, or launching a competing business. In the Netherlands, there are two main types of post-termination restraints that employers can impose on their employees: non-solicitation clauses and restrictive covenants. Collectively, these can be referred to as non-competition agreements or non-compete clauses.
A non-solicitation clause is a clause that can be added to an employee’s contract, which states that they may not approach or recruit any customers or employees from their former employer after they leave the company. This prevents the departing employee from causing their former employer to lose business.
Restrictive covenants are similar to non-solicitation clauses but are more comprehensive in scope. They can prevent employees from working with competitors, setting up a competing business, or otherwise engaging in activities which could harm their former employer’s business.
These clauses also often prevent employees from discussing trade secrets with their future employers. They may include penalty clauses that impose financial sanctions for violating the restrictive covenant.
Under Dutch law, there are certain requirements that non-competition clauses have to adhere to in order to be found valid. In general, post-termination restraints shouldn’t be too broad or restrictive. If a court finds that even one aspect of a non-competition clause is unfair, the entire agreement could be declared invalid.
The specific criteria that non-competition clauses need to meet are:
In the Netherlands, employers can enforce a non-competition clause in court if the employee has breached it. To do this, they need to prove that the clause serves a legitimate business interest and that it doesn’t unreasonably interfere with the employee’s ability to make a living. They also need to give evidence of any potential harm caused by breaching the agreement, and that this outweighs the benefits of doing so. Courts can impose financial penalties on employees if they find that they have breached a reasonable non-competition agreement.
In some circumstances, employees may choose to waive their rights to bring a claim against their employer. In the Netherlands, this is usually in the context of a settlement agreement.
A settlement agreement is a legally binding contract between an employer and an employee that outlines the terms and conditions of the end of their employment agreement. Settlement agreements may be used to address issues of wrongful termination, discrimination, breach of contract, or other disputes.
As part of a settlement agreement, employees can agree to waive their rights to bring any further claims against their employer. This is a way to provide closure to both parties and prevent future litigation.
Here are a few other factors that employers should keep in mind when drawing up settlement agreements in the Netherlands:
When a business is purchased by another business, there are rules about what happens to employees at that organisation. In the Netherlands, employees are protected by the European Acquired Rights Directive 2001/23/EC, which is implemented as part of the Dutch Civil Code.
These regulations stipulate that employees should be transferred from the old employer to the new one and that all of their rights and obligations transfer with them. The employees’ employment contracts remain unchanged, apart from the name of their employer.
What counts as a transfer of undertaking in the Netherlands?
In the Netherlands, only certain transactions count as transfers of undertaking. Dutch business law stipulates that the sale of an entire business and all its activities is always a transfer of undertaking. However, things get more complicated when only certain parts of a business are sold or transferred.
According to the Supreme Court of the Netherlands, the key question is whether the identity of the company is preserved. If a business’ activity is effectively closed down and then continued or renewed by another business with the same or similar business assets, this is likely to be considered a transfer of undertaking in the Netherlands.
Consulting with employee representatives
In the Netherlands, employers have to consult with employee representatives about any proposed transfer of undertaking. They must provide them with the reason behind the potential transfer, the potential consequences for employees, and what measures will be taken. Employers must also inform individual employees about transfers and their consequences.
Joint liability
When a business is transferred, the seller and the buyer are jointly responsible for the fulfilment of their obligations under employment contracts for one year after the sale. After this date, responsibility passes solely to the purchaser.
When employees object to the transfer
Employees don’t have to continue their employment with the new company if their company is purchased or transferred. If an employee objects to the transfer, they can refuse to continue their employment and their contract will end on the transfer date.
There are many different ways an employment contract can come to an end. But whatever the situation, you need to understand the rules that cover the end of employment in the Netherlands — or you could end up facing legal issues.
Our solutions ensure your business is protected from risk when a relationship with a worker comes to an end — whatever the reason. We can also help you to avoid missed opportunities by re-deploying talent where possible.
The statutory employee notice period in the Netherlands is generally one month unless a different period has been agreed clearly in the employment contract. An employee’s contractual notice period cannot normally exceed six months. The employer’s notice period may be longer and normally depends on the employee’s length of service.
The correct notice period in the Netherlands should be checked against the contract, collective labour agreement and employee’s status. The statutory notice rules also limit how a longer employee notice period can be structured. If the employee’s notice period exceeds one month, the employer’s period must generally be at least twice as long. A CAO may provide different arrangements. Notice normally takes effect at the end of a calendar month unless a lawful alternative has been agreed.
Fixed-term contracts usually end automatically on the agreed date, although an early-termination clause may allow notice before then. A separate written notification requirement may apply where the employer must tell the employee whether the contract will be renewed. This notification obligation generally applies to fixed-term contracts lasting at least six months and must be satisfied at least one month before the end date.
Notice should be calculated carefully and confirmed in writing. The employer should state the final working date, treatment of holiday and benefits, and whether the employee will continue working or be placed on garden leave.
Generally, no. Employees generally must observe the contractual or statutory notice period unless the employer agrees to an earlier departure or a legally recognised exception applies.
The resignation notice period in the Netherlands is normally one month for employees, although the contract or collective labour agreement may provide a different arrangement. During a valid probation period, either party may usually end employment immediately without giving ordinary notice.
Immediate resignation may also be possible where the employer has seriously breached its obligations or circumstances make continued employment unreasonable. The employee should obtain advice before relying on that route, because leaving without proper grounds may create financial or procedural consequences.
An employee with a fixed-term contract that does not contain an interim termination clause generally cannot resign before the agreed end date unless the employer agrees, an urgent cause exists or another lawful route is available. An employee who terminates irregularly may be liable to compensate the employer. A resignation should be given clearly, preferably in writing, with the intended final working date. The employer should confirm receipt and explain how outstanding holiday, expenses, bonuses, benefits and company property will be handled.
Employees should not assume that simply stopping work ends the contract. Until the employment relationship ends lawfully, contractual duties generally continue.
Employees in the Netherlands remain entitled to salary, contractual benefits, holiday accrual and normal employment protections during the notice period. The employment relationship continues until the agreed final date unless both parties arrange an earlier end.
The employee may continue working, take approved holiday or be released from duties under an agreed garden-leave arrangement. Garden leave should be documented clearly, including whether the employee must remain available, whether benefits continue and whether outside work is restricted. Unless validly agreed otherwise, the employer must continue paying normal salary and contractual benefits throughout garden leave.
The employer must continue to respect confidentiality, privacy, sickness rights and protection against discrimination or retaliation. A termination decision does not remove the employee’s right to raise a complaint or challenge an unlawful dismissal.
Payroll should calculate salary, holiday allowance, expenses, bonuses and benefits through the final date. The employee should receive information about returning equipment, access to systems, references and any continuing confidentiality obligations.
A well-managed notice period gives the employee clarity while allowing the employer to protect continuity, information and customer relationships.
The end-of-contract process in the Netherlands depends on whether the employee has a fixed-term or permanent employment contract. A fixed-term contract normally ends automatically on the agreed end date, but where the contract lasts six months or longer, the employer must usually notify the employee in writing at least one month before the contract ends whether it will be renewed. This is known as the notification obligation (aanzegplicht) under the Dutch Civil Code (Burgerlijk Wetboek).
If the employer fails to provide this notification, the employee may claim compensation equal to one gross monthly salary. If notification is late, compensation is generally calculated proportionately. The employee must normally claim this compensation within two months after the contract ends. Before the contract ends, employers should confirm the employee’s final working day, calculate outstanding salary, holiday allowance, accrued annual leave and any transition payment (transitievergoeding) that may be due. The transition payment generally accrues from the employee’s first day of employment and may be payable when the employer does not renew a fixed-term contract. Payroll should also finalise statutory deductions, while HR should arrange the return of company property, remove system access and provide any required employment documentation.
If the employer intends to continue the employment relationship, new employment terms should be agreed before the existing contract expires. Where employment is ending, employers should also check whether additional protections apply, such as during pregnancy or long-term sickness absence, as these may affect how employment can lawfully end.
A fixed-term contract can ordinarily expire on its agreed date even if the employee is pregnant or sick. However, the decision not to renew must not be discriminatory or retaliatory, and an employer may have additional UWV reporting and reintegration obligations where an employee remains sick when the contract expires. A well-managed end-of-contract process helps employers meet their obligations under Dutch employment law while ensuring employees receive the correct pay, documentation and statutory entitlements when employment ends.
The end of a contract in the Netherlands is mainly governed by the Dutch Civil Code (Burgerlijk Wetboek) and the Dismissal Decree (Ontslagregeling). These rules set out when employment can end, the procedures employers must follow, and the payments employees may be entitled to receive.
The legal requirements differ depending on how employment ends:
Situation | Legal requirement |
Fixed-term contract expires | Normally ends automatically on the agreed date. If the contract is 6 months or longer, the employer must usually notify the employee in writing at least one month before the end date whether it will be renewed (aanzegplicht). |
Permanent employment | The employer cannot simply terminate the contract. Depending on the reason, dismissal usually requires approval from the UWV, a decision from the subdistrict court, or a mutually agreed settlement agreement. |
Early termination of a fixed-term contract | Only possible if the employment contract includes an early termination clause or both parties agree to end the contract early. |
Transition payment | Employees are generally entitled to a transition payment (transitievergoeding) when the employer ends or does not renew the employment contract, unless a statutory exception applies. |
Employers should also consider whether the employee has additional protection, such as during pregnancy, maternity leave, sickness or membership of a works council, as these situations may restrict dismissal or require additional legal safeguards.
Before ending employment, employers should confirm the correct dismissal route, calculate final salary and statutory entitlements, and ensure payroll and employment documentation are completed accurately. Failure to follow the correct legal process can result in compensation claims or a finding that the dismissal was unlawful.
The key difference is how employment comes to an end. An end of contract usually means a fixed-term employment contract expires on the agreed end date. Termination of employment means the employer or employee actively ends the employment relationship before that point or ends a permanent employment contract through one of the legal dismissal routes.
This distinction is important because the legal requirements are different. A fixed-term contract generally ends automatically when it reaches its agreed expiry date, although employers must usually comply with the one-month written notification requirement (aanzegplicht) where the contract lasts six months or longer. A permanent contract, however, cannot simply be ended by giving notice. Employers must follow one of the dismissal procedures set out in the Dutch Civil Code (Burgerlijk Wetboek).
Early termination of a fixed-term contract is generally possible only where a written interim termination clause exists or another lawful route applies. Even where such a clause exists, an employer may still need UWV permission or a court order, depending on the dismissal reason.
Regardless of how employment ends, employers should calculate final salary, holiday allowance, accrued leave and any transition payment (transitievergoeding) that may be due before the employee leaves. A transition payment may be payable when the employer terminates employment or decides not to renew a fixed-term contract, but it is not automatically required where the employee resigns voluntarily, or the parties negotiate a settlement.
Employers cannot terminate an employee in the Netherlands simply by giving notice. Under the Dutch Civil Code (Burgerlijk Wetboek), there must be a legally recognised reason for dismissal, and the employer must follow the correct legal procedure.
The dismissal route depends on the reason for termination:
Reason for termination | Legal route |
Redundancy or long-term sickness | Apply for permission from the Employee Insurance Agency (UWV). Dismissal for long-term sickness generally becomes possible only after the 104-week dismissal prohibition and reintegration period, provided the relevant conditions have been met. |
Performance, misconduct, poor working relationship or other personal grounds | Apply to the subdistrict court (kantonrechter) to terminate the employment contract. |
Mutual agreement | Employer and employee sign a settlement agreement (vaststellingsovereenkomst) setting out the agreed termination terms. |
Summary dismissal | Immediate dismissal is only permitted for serious misconduct and must meet strict legal requirements. |
Probation | Either party may end the employment during a valid probation period without following the normal dismissal procedures. |
Before starting any dismissal process, employers should confirm the legal ground for dismissal, gather supporting evidence and consider whether redeployment is required. Additional protections may also apply during pregnancy, maternity leave, works council membership or certain periods of sickness, which can restrict when dismissal is permitted.
A compliant termination process should also include the correct notice period where applicable, calculation of the transition payment, final payroll, accrued holiday pay and all required employment documentation.
Dutch law does not provide a separate universal severance payment in addition to the statutory transition payment. Employees are, however, generally entitled to a statutory transition payment (transitievergoeding) when the employer dismisses them or decides not to renew a fixed-term employment contract, unless a legal exception applies.
Although people often refer to this as severance pay in the Netherlands, the statutory payment is officially called the transition payment. Additional severance may also be agreed under a settlement agreement (vaststellingsovereenkomst), an employment contract or an applicable collective labour agreement (CAO).
A transition payment is generally payable from the employee’s first day of employment, including most fixed-term contracts. However, it is not usually payable where the employee resigns voluntarily or where the employment ends because of the employee’s serious culpable conduct, unless a court decides otherwise. An employee who resigns because of the employer’s seriously culpable conduct or failure to act may still qualify for a transition payment. Other statutory exceptions can apply, including dismissal at or after the state pension age, bankruptcy and certain employees under 18 who work no more than 12 hours per week on average.
In 2026, the transition payment is capped at €102,000 gross or one gross annual salary where the employee’s annual salary exceeds €102,000. Before employment ends, employers should calculate any transition payment due separately from the employee’s final salary, holiday allowance, accrued leave and other contractual payments. Providing employees with a clear breakdown of each payment helps avoid confusion and disputes.
The statutory transition payment (transitievergoeding) is generally calculated at one-third of the employee’s gross monthly salary for every full year of employment, with a proportional calculation for part of a year. The calculation is set out in the Dutch Civil Code (Burgerlijk Wetboek) and applies from the employee’s first day of employment.
When calculating the transition payment, employers should include the employee’s gross monthly salary together with any salary components that Dutch law requires to be included, such as fixed allowances and certain variable pay. The final amount depends on the employee’s length of service and earnings immediately before employment ends.
For 2026, the resulting statutory payment cannot normally exceed €102,000 gross. If the employee’s gross annual salary is higher than €102,000, one gross annual salary applies as the maximum instead. Before making the final payment, employers should also check whether a collective labour agreement (CAO) or a settlement agreement (vaststellingsovereenkomst) provides for an additional payment. These payments are separate from the statutory transition payment and should be identified clearly in the final settlement.
Employers dismissing an employee after more than two years of sickness must generally still pay the transition payment, including for the period during which the employee was sick. As of July 2026, eligible employers can still apply to UWV for compensation after paying it, subject to the applicable conditions and deadline. The transition payment should also be calculated separately from final salary, holiday allowance, accrued annual leave, bonuses and expense reimbursements. A clear written breakdown helps employees understand how the payment has been calculated and reduces the risk of disputes.
CXC provides Employer of Record (EOR) services in the Netherlands, helping businesses manage employee terminations in line with Dutch employment laws. Our local specialists support the employment administration associated with termination, including notice periods, final payroll, holiday allowance, transition payments, employment documentation and statutory offboarding requirements.
We help employers coordinate every stage of the termination process, from reviewing employment terms and preparing the required documentation to calculating final entitlements and ensuring payroll is processed accurately. Our team also helps employers apply Dutch employment requirements consistently, including where collective labour agreements (CAOs) or statutory employee protections affect the termination process.
Whether you are ending a fixed-term contract, managing a redundancy or supporting a mutually agreed separation, CXC provides local expertise backed by more than 30 years of global workforce experience. By managing the employment administration and compliance requirements, we help reduce administrative complexity while supporting a fair and consistent employee experience.
This allows your HR and leadership teams to focus on managing the business, while CXC helps ensure the termination process is handled accurately, compliantly and respectfully from start to finish.
With our EoR solution, you can engage workers anywhere in the world, without putting your business at risk. No more worrying about local labour laws, tax legislation or payroll customs — we’ve got you covered.
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