news

The notice period: how does it work?

14 October 2021

For both the employee and the employer, a notice period applies when terminating an employment contract. It is important that this term is observed. If the party giving notice does not do so, he owes the other party damages equal to the wages over the period the employment contract would have continued if the correct term of notice had been applied. In this blog we will discuss the possible notice periods and the consequences of not (correctly) applying them.

Statutory notice period

The statutory notice period applies to the termination of:

  • an open-ended employment contract; and
  • a fixed-term contract that includes a termination clause. If there is no termination clause in a fixed-term contract, the contract cannot be terminated prematurely and ends by operation of law. Read in our blog about agreeing on a termination clause in a settlement agreement that is terminating the fixed-term employment contract.

For the employee, the statutory notice period is one month, regardless of the duration of the employment.

The notice period for the employer depends on the duration of the employment contract. If the employment contract is terminated after permission has been obtained from the court or the UWV, the procedural time is deducted from the notice period, provided at least one month of notice remains.

An example: the employer wants to give notice on 10 October. The notice period is (for example) 2 months (10 December) and the UWV took four weeks to assess the dismissal request. In that case, the employer may deduct four weeks from 10 December (approximately 10 November). Notice is given at the end of the month, which means that the employment contract ends on 1 December.

Please find below the statutory notice period for the employer, depending on the duration of the employment:

Duration of employment Statutory notice period
Less than 5 years One month
5 to 10 years Two months
10 to 15 years Three month
15 years or more Four months

 

 

 

 

 

Derogation from the statutory notice period

It is possible to extend the notice period for the employer. This can only be agreed upon in writing, for example in the employment contract. Furthermore, shortening the notice period for the employer is only possible by means of a CAO or a regulation under public law. However, the notice period may not exceed six months.

If the notice period for the employee is extended, then the notice period for the employer must be (at least) twice that of the employee (unless otherwise agreed in a CAO or regulation). For example, if the employee's notice period is extended to two months, the employer's notice period should therefore be (at least) four months.

Termination by the end of the month

The law requires that termination must take place by the end of the (calendar) month, unless another day has been agreed by written agreement or by custom (in general or in a certain sector/company). The notice period commences on the 1st of the following month.

Example: an employee wants to leave his employment on 1 April. The notice period is one month. In that case, the employee must give written notice prior to 1 March. In principle, the employee must still work in the month of March.

Fixed damages

If a party does not observe the correct (legal or agreed) notice period, he owes the other party fixed damages. If a fixed-term contract is terminated without a termination clause, fixed damages are also due. The fixed damages apply to both the employee and the employer.

The compensation amounts to the stipulated (gross) salary (determined in the employment contract) for the period that the employment contract would have lasted if the correct notice period had been applied. This amount has been determined by law and therefore does not depend on whether damage has actually been suffered. In case of termination of a fixed-term contract without a termination clause, the fixed damages are equal to the salary over the remaining term of the employment contract.

No notice period

No notice period applies for both the employee and the employer, if:

  • the notice is given during the trial period;
  • the employee is dismissed with immediate effect;
  • the employee is dismissed with immediate effect.

 

Do you have any questions about the notice period? Please contact one of our lawyers.



More information?

All lawyers of our firm specializing in labor law. We have extensive experience in providing employment law advice and resolving employment disputes.