The key differences between Dutch labour law and English employment law
Despite still both (currently) being within the EU and subject to EU laws, there are a number of differences in the rights and protections offered to employees within these jurisdictions.
The protection offered to employees based in the Netherlands is in essence much greater than that afforded to employees working in the UK.
Under English law, if an employee is off sick (unless they have been provided with enhanced rights under their contract of employment), then they are only entitled to be paid by their employer statutory sick pay (SSP) and this only applies once they have been off sick for more than 3 days, otherwise nothing has to be paid. SSP is currently £88.45 (equivalent to €103.21 per week) and must be paid for 26 weeks, after which no support is provided and the employee will need to seek state support. By contrast, under Dutch law employers are required to pay at least 70% of the employee's last earned wages for a maximum of 2 years (and it is common under the employee's contract for employers to provide 100%, at least for some of this period).
The most notable difference however is the protection offered in respect of termination of employment.
In the Netherlands, with very limited exceptions, an employment contract can only be terminated by the employer with the consent of the employee, the labour office (UWV AJD) or the court. Furthermore, permission can only be requested for very specific reasons, which have to be proven completely. If the grounds are not properly substantiated then termination will not be possible. If an employee is given notice by an employer when permission has not been obtained and the employee has not agreed to this, the notice is invalid.
Upon termination, if the employee has been employed for more than two years, the employer has to pay severance pay in accordance with the formula called "Transition compensation" (Transitievergoeding). Compensation is calculated based on the number of years of employment and the employee's salary. The Transition Compensation is currently capped at EUR 77.000 gross or one year's salary if this is more.
By contrast, under English law an employment contract can be terminated by an employer within the first 2 years of service by giving 1 weeks' notice (unless a longer notice period has been agreed between the parties in the employee's employment contract). This is the case unless the termination is for a discriminatory reason (such as age, sex, disability or religion) or for whistleblowing, as these reasons are considered to be "automatically unfair" and the 2 years' service requirement does not then apply. After 2 years' service an employee has the right not to be unfairly dismissed and the employer can only dismiss the employee if it has a fair reason for doing so (such as capability, conduct or redundancy). A fair procedure must also have been followed in implementing the decision, including (if for example the reason is capability), giving the employee additional training and support and a chance to improve. Termination is a decision for the employer and if the employee considers the dismissal was unfair, the employee can submit a claim to the Employment Tribunal who will then list the case for a hearing and determine whether or not the dismissal was "in the range of reasonable responses" open to the employer or whether it was unfair and compensation should be awarded. Compensation is capped at £80,541 (€94,298.85) or 1 year's salary if this is less, unless the dismissal is automatically unfair in which case it is uncapped. The employee, regardless of the reason for dismissal, is required however to try and mitigate their loss by obtain new employment and is required to provide proof of the attempts made to find new work (or medical evidence as to why they cannot work). The evidence provided will impact of the amount of compensation awarded.
It is therefore very important to take advice when dismissing employees based in the UK where discrimination could be a risk (such as dismissing someone for sickness related absence as the employee could be considered to have a disability and further obligations would then apply) and when an employee has 2 years' service.
Search ADVOC News