Pursuant to Section 7:677 of the Dutch Civil Code (DCC), ‘either party is authorised to immediately terminate the employment agreement for an urgent reason, with immediate notification of such reason to the other party’ (the ‘double promptness test’). For the employer, urgent reasons consist of conduct by the employee that is serious enough that the employer can no longer be required to continue the employment relationship with the employee. Section 7:678 of the DCC lists a number of examples of urgent reasons, such as intentionally providing false information in the application process, assaulting, grossly insulting or seriously threatening the employer or (other) employees, theft, embezzlement and fraud. However, this list is non-exhaustive; other situations may also constitute an urgent reason.
It follows from established case law that all circumstances of the case, regarded in mutual relation to each other, must be taken into account when assessing whether there is an urgent cause. For example, the nature and seriousness of the urgent reason and the personal circumstances of the employee, such as the length of employment, position, age, his home situation and the consequences that the dismissal for urgent cause would have for the employee. Previous behaviour may also contribute to the opinion that there is an urgent cause (especially if the employee has previously behaved in a certain undesirable manner, has been addressed on this matter, but then again behaves in such undesirable manner). This previous behaviour must then be communicated to the employee at the same time as the immediate notice for the dismissal (or the employee must have understood that this behaviour contributed to the fact that dismissal for urgent cause is warranted).
Immediate dismissal and immediate notice
The dismissal must be immediate. This means that the employer must act expeditiously, i.e. the employer must act immediately after the conduct giving rise to the dismissal for urgent cause. If the employer fails to act quickly (for example, by waiting too long to investigate a potentially urgent reason), the employee can argue in proceedings that the dismissal was not given immediately, and the reason was therefore apparently not urgent enough. Consequently, this can lead to the opinion that there was no legally valid dismissal for urgent cause. However, the fact that an employer must act expeditiously does not mean that he is not allowed time for acting diligently. For example, the employer has time to first consult internally, seek (legal) advice or optionally, conduct additional (external) research, but again, the employer must act with a certain level of promptness.
In addition, it must be immediately communicated to the employee why he is being dismissed for urgent cause. It is therefore very important to correctly state the reason for dismissal, as the employee must know what he is being accused of. For example, the reason that the employee behaved ‘unprofessionally’ does not suffice, because it concerns a too general description which makes it insufficiently clear to the employee why he is being dismissed. Furthermore, the reason for the dismissal has to be communicated to the employee without delay, but it does not necessarily have to take place simultaneously with the notice of dismissal; a (very) short period of time between the immediate dismissal and the notice is allowed.
Possible actions of the employee against a dismissal for urgent cause
If the employee does not agree with the dismissal for urgent cause, the employee may, no later than two months after the dismissal for urgent cause, request the court to annul the dismissal. In those proceedings, the employee must claim that there was no urgent reason, or that the employer did not immediately terminate the employment agreement or did not give immediate notice of the termination. If the annulment is granted, the employee can in principle claim reinstatement and retroactive payment of wages (including statutory increase and interest on the wages) until the employment agreement is legally terminated. Instead of asking the court to annul the dismissal for urgent cause, the employee can also ask the court to award him/her a fair compensation, in addition to the award of the severance payment and compensation for the improperly ignored notice period. In this situation, the employee accepts that his or her employment agreement has been terminated.
The ruling by the district court of Zeeland-West Brabant involved a truck driver who had received written warnings almost annually since 2004, including for, among other things, taking goods from customers for private use without the employer's permission, intentionally dawdling when performing work, submitting its weekly statements too late, and dangerous driving behaviour. In 2022, the employee had received a final warning. The urgent reason that ultimately prompted an immediate dismissal for urgent cause was the surreptitious taking of two cans of soda from the refrigerator in the company cafeteria. Even though the subdistrict court ruled that taking the two cans was admittedly a minor fact and that the employer did not have a zero-tolerance policy in this regard, these facts were less relevant because the employee had already received numerous warnings throughout his employment for failing to follow work instructions. Consequently, the court ruled that this was the proverbial straw that broke the camel's back.
The ruling demonstrates that theft, even if it involves something of little value, is often a good reason for dismissal for urgent cause and highlights the importance of clear communication to an employee. In this case, the employee knew from company regulations that the refrigerator was only used by site personnel and not by drivers and more importantly, he had received a clear final warning.
The question on whether dismissal for urgent cause is legally valid depends very much on the specific circumstances of the case. In this regard, we advise employers to take the following points into account when considering a dismissal for urgent cause:
- The above ruling shows that an urgent reason (even for minor misconduct) is in principle more likely to be assumed if a prior history, including earlier warnings, has already taken place. Documenting previous misconduct and official (last) warnings in writing can help with building a file.
- Despite the above ruling, the importance of a clear policy should not be underestimated. An urgent reason is more likely to be assumed if it was known to the employee that he acted in violation of company regulations and/or rules of conduct (and what the consequences are in such case) and if these regulations are consistently applied by the employer (e.g., by applying a strict zero tolerance policy).
- In case of doubt, it is further advisable to conduct a careful investigation as soon as possible, taking into account the principle of hearing both sides of the argument. In some cases, it may be advisable to suspend the employee in advance (without delay) pending the final decision or outcome of the investigation in order to meet the immediate dismissal requirement.
Finally, in order to limit a possible wage claim as much as possible, it can be considered to start a (conditional) dissolution procedure (voorwaardelijke ontbindingsprocedure). In that case, the subdistrict court is requested to terminate the employment agreement in case the subdistrict court concludes that earlier given dismissal for urgent cause is not valid. However, this will require meeting the requirements for termination as set forth under Dutch law (such as a reasonable ground for dismissal and the redeployment requirement).
Do you need help or want to learn more about whether a dismissal for urgent cause is legally valid? Please feel free to contact us for advice. We are of course happy to assist you.