Dismissal of hospitality staff by mutual agreement: what about it?
Date: June 03, 2019
Modified November 14, 2023
Written by: Ruud Olde
Reading time: +/- 2 minutes
Date: June 03, 2019
Modified November 14, 2023
Written by: Ruud Olde
Reading time: +/- 2 minutes
Dismissal proceedings leave no one untouched. Employer and employee often get involved in a long and expensive process in which emotions can run high. Working together with the employee to come to an arrangement can therefore offer a solution in many cases. How does mutual agreement work and when is it a good option?
When employer and employee agree on the termination of employment and its terms, it is called a "termination by mutual agreement. The agreements made regarding the termination of employment must be recorded in writing. A settlement agreement is often used for this purpose.
The major advantage of terminating employment by mutual agreement is that the (strict) rules that govern termination or dissolution of an employment contract do not have to be met.
For example, if an employer wants to terminate an employment contract due to inadequate performance of the employee, the employer must go through many of the steps previously described in the article Dismissing Hospitality Staff Who Cut Their Sides.
With termination by mutual agreement, none of that is necessary. All that is required is the employee's agreement. In many cases, that agreement can be reached by offering the employee compensation for job loss.
Making a settlement with an employee has more benefits, such as:
For example, if there is still dispute over pension contributions that have not been properly paid, an underpayment of salary or a liability claim due to an accident that occurred at work, all of these can be resolved at the same time.
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If you want to terminate employment by mutual agreement, the first thing you need to do is talk to your employee. You then tell him or her that you want to terminate the employment and why. Then you explain that the termination of the employment (depending on the grounds for dismissal) can take place through the intervention of the UWV or the subdistrict court or through a termination by mutual agreement, and that the latter option is your preference.
You can let the employee know the conditions under which you are willing to part ways by mutual agreement. In some situations, this can be made concrete immediately by giving the employee a proposal.
In other situations, it is wiser to set aside a little more time for such a process and, after an initial orientation meeting, schedule one or more follow-up meetings before a proposal is developed in writing.
The content of a termination agreement is form-free. The parties may determine the conditions under which the employment contract ends.
The agreement must contain at least the following:
In addition to the mandatory parts that there must be in a termination agreement, it is often wise to make and include in the agreement, for example, agreements on:
Making a severance agreement is always customized. So don't just grab a model off the Internet, but work to record all the relevant agreements. If the employee is also a director or works across the border, things get even more complicated. Get timely advice on this to avoid skipping matters that need to be arranged properly.
In a termination by mutual agreement, the employee is not entitled to a transition fee. In practice, employer and employee do usually negotiate about payment of a (transition) compensation in cases of dismissal by mutual agreement, because employees often weigh what they will get if they decide to litigate the dismissal anyway. To avoid risk and uncertainty, many employers are willing to pay some for the dismissal.
The employee may also be eligible for WW benefits in the event of a termination by mutual agreement, provided that the employee meets all applicable conditions and, for example, has worked in the Netherlands long enough to be eligible for WW benefits at all.
The UWV further verifies, among other things, whether the settlement agreement shows that the employer initiated the termination and the termination is not due to the employee.
This does not alter the fact that the UWV itself assesses whether the employee is entitled to WW benefits. Therefore, as an employer, it is not wise to give a guarantee of WW benefit.
Unlike a dismissal route through the UWV or the subdistrict court, this form of dismissal does not require consideration of specific grounds for dismissal or prohibitions on notice. The parties can decide to jointly terminate the employment contract at any time and for any reason.
In theory, this is possible even if the employee is sick. However, in practice, the employee will not readily cooperate with a sickness termination agreement, as it may deprive him of his right to benefits.
Making a severance arrangement with a sick employee is usually not wise for other reasons as well. For example, you can think about increasing the premiums you pay to the UWV if you do cooperate in such an arrangement.
Employees have a right of withdrawal. This means that they may reconsider termination within 14 days. If they exercise that option, the employment remains or negotiations resume. Incidentally, an employee may not revoke twice within a six-month period.
Dismissing an employee is not easy. If you are uncertain about the outcome of a dismissal procedure with the UWV or the subdistrict court or have an interest in a quick and relatively inexpensive settlement, dismissal by mutual agreement is often a good solution.
However, as an employer, you must be willing to work with the employee and come to an arrangement that is attractive to both parties. Finally, make sure that you arrange everything around the departure well and put it in writing to avoid any discussion afterwards about so-called loose ends.
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