Unjustly dismissed: what can you do?

Unjustly dismissed: routes to restore your position

When a dismissal or suspension is imposed that you believe to be unjustified, every day counts. The legal landscape offers various routes: annulment of the decision, summary proceedings for reinstatement, compensation for manifestly unfair dismissal, or structured negotiations for a better exit. Which route is the right one depends on the role you held (director, employee, shareholder, or a combination), the nature of the dismissal (corporate decision, termination under employment law, termination of a management agreement), and what you ultimately want: a return or a financial settlement. A swift legal triage in the first week following the dismissal is decisive for the outcome.

Statutory director: annulment of the decision

For a statutory director, the corporate law resolution of the general meeting forms the starting point. If that resolution is defective on formal or substantive grounds, annulment may be sought pursuant to Article 2:15 of the Dutch Civil Code. Possible grounds include: the absence of a valid notice of the General Meeting, an incorrect composition of the meeting, failure to provide the right to be heard under Article 2:227 paragraph 4 of the Dutch Civil Code, or a dismissal that is contrary to the articles of association or to reasonableness and fairness under Article 2:8 of the Dutch Civil Code.

If the annulment is granted, the decision is deemed never to have been taken. The director then formally remains in office, with all associated rights and obligations. In practice, summary proceedings are often initiated in parallel to obtain provisional measures pending the outcome, such as continued payment of the management fee or access to the company systems.

A second route is the inquiry procedure before the Enterprise Chamber pursuant to Article 2:344 of the Dutch Civil Code and subsequent articles. In the event of well-founded grounds to doubt the proper management, the Enterprise Chamber may order an investigation and, if mismanagement is proven, take measures, including possibly the return of the director or the appointment of an independent interim director.

Employee: termination and grounds

For an employee in an employment relationship, the law offers specific protection mechanisms. A termination without the permission of the UWV or without a ruling by the subdistrict court is generally not legally valid and can be annulled within two months pursuant to Article 7:681, paragraph 1, of the Dutch Civil Code. The employee may claim reinstatement in the position or demand equitable compensation.

In the case of a termination that took place via the UWV or the sub-district court but where reasonable grounds are lacking or procedural requirements have been violated, an appeal may be lodged. On appeal, the employee may claim reinstatement or demand additional compensation.

Special rules apply to summary dismissal (Article 7:677 of the Dutch Civil Code). The employee may claim annulment within two months. If the annulment is well-founded, the employment contract is reinstated retroactively, including continued payment of wages for the intervening period. In cases of doubt regarding the reasons for the summary dismissal, this is generally an attractive route for the employee.

Summary proceedings for reinstatement

A frequently used instrument in the first weeks following a dismissal deemed unfair is summary proceedings for reinstatement. In these summary proceedings, the employer is ordered to allow the employee or director to return to work, usually subject to a penalty payment. The summary proceedings can lead to a ruling within a few weeks of the dismissal.

The preliminary relief judge assesses whether it is sufficiently plausible that the court of first instance will ultimately annul the dismissal or deem it unjust, and weighs the interests of the parties. In the case of a reasonably disrupted employment relationship, the threshold is high; in the case of an evidently flawed decision, it is lower. An awarding summary proceeding is a powerful leverage tool in the negotiations that usually follow.

Compensation for damages and equitable compensation

When return is no longer realistic or desired, the route of financial settlement remains open. For employees, in cases of seriously reprehensible conduct by the employer, the equitable compensation under Article 7:671b paragraph 9 of the Dutch Civil Code (sub-district court route) or Article 7:683 paragraph 3 of the Dutch Civil Code (appeal) applies. The compensation is determined on a case-by-case basis taking into account a large number of factors, including the degree of culpability, loss of income, and age.

For statutory directors, the route of manifestly unreasonable dismissal exists pursuant to Article 7:681 of the Dutch Civil Code, provided there was an employment contract. For management agreements, there is ordinary compensation for damages pursuant to Article 7:408 of the Dutch Civil Code (termination of mandate without weighty cause), which often includes compensation for the notice period supplemented by any damages suffered.

When negotiating is wiser than litigating

Not every justified grievance leads to an attractive legal proceeding. An ongoing lawsuit can drag on for years, damage self-confidence, and ultimately result in a lower outcome than an early settlement. An experienced negotiator can often achieve an improvement of twenty to fifty percent on the offered compensation within the first week following dismissal, without initiating legal proceedings.

The choice between litigation and negotiation requires a fair assessment of the chances of success, costs, turnaround time, and the importance of a quick restart with another employer. A lawyer familiar with both routes can support you in making the right choice.

Follow-up action

Have you recently been dismissed or suspended and are you unsure whether the decision will stand? Our employment and corporate law practice offers a rapid initial triage in which we assess the legal starting position, procedural options, and realistic outcome. Time is the most important legal tool in these cases; do not wait longer than a week after the dismissal to seek an initial legal opinion.