Corporate employment law

What we do

For issues and conflicts at the corporate level, we are the experienced sparring partner for your boardroom. We handle complex matters with utmost discretion and care. We advise and support in all phases and on all fronts. Moreover, we are capable of resolving matters and issues through legal proceedings as well as negotiation, conciliation, or mediation. Examples include:

• Appointment and dismissal of directors
• Corporate governance
• Legal frameworks for remuneration (top incomes)
• Conflict within the boardroom, between directors, supervisory board members, and shareholders
• Survey procedure
• Employment law issues in mergers and acquisitions (including due diligence)

Questions regarding corporate employment law? Please contact us directly.

What is corporate employment law?

Corporate employment law is employment law at the intersection of the boardroom and the company. It concerns the employment law aspects of managerial relations: the position of the statutory director, remuneration and governance, employee participation, and the employment-related consequences of mergers and acquisitions. Unlike with an ordinary employee, these issues always touch upon two areas of law simultaneously: employment law and corporate law. This calls for legal experts who are at home in both. At MKB Juristen, lawyers and in-house counsel therefore work together in mixed teams, for clients ranging from an international group to the baker on the corner appointing his first director. This subject falls under our broader expertise in Employment Law.

The dual legal relationship of the statutory director

The core of corporate employment law is the special position of the statutory director. Typically, this person holds a dual legal relationship: a corporate law relationship (as a director, appointed by the competent body) and an employment law relationship (as an employee with an employment contract). Since the so-called April 15 rulings of the Supreme Court in 2005, the principle has applied that a legally valid corporate law decision to terminate an employment contract generally also terminates the employment contract. Consequently, the director lacks ordinary protection against dismissal: there is no preventive review by the UWV (Dutch Unemployment Insurance Agency) or the sub-district court, as is the case with a regular employee. However, exceptions do apply, for example, when a prohibition on termination under Article 7:670 of the Dutch Civil Code applies (such as during illness). Furthermore, a valid dismissal requires reasonable grounds within the meaning of Article 7:669 of the Dutch Civil Code, and the director retains the right to the transition payment under Article 7:673 of the Dutch Civil Code and to a reasonable notice period. Because one wrong step can render a dismissal decision void or voidable, careful preparation always pays off.

Appointment and dismissal: the corporate law route

Anyone wishing to validly appoint or dismiss a director must scrupulously follow the rules of corporate law. In principle, the appointment of a director is made by the general meeting of shareholders (Article 2:132 of the Dutch Civil Code for the public limited company (NV), Article 2:242 of the Dutch Civil Code for the private limited company (BV)). The power to suspend and dismiss rests with that same body (Article 2:134 of the Dutch Civil Code for the NV, Article 2:244 of the Dutch Civil Code for the BV), unless the articles of association designate another body; in the case of a structured company, this power rests with the supervisory board. Strict formalities apply to the decision to dismiss: proper notice and inclusion on the agenda of the general meeting, the principle of hearing both sides (the director must be able to present his views), and the director's advisory voting rights. In addition, the Works Council has a right of advice regarding the appointment or dismissal of a director pursuant to Article 30 of the Works Councils Act. We guide both the company and the director, from careful decision-making to a comprehensive settlement agreement in which the termination of both the directorship and the employment contract is arranged in conjunction.

Remuneration, governance and top incomes

Executive remuneration is under close scrutiny. We advise on terms of employment, bonus and option schemes, severance payments, and their relationship to good corporate governance. In doing so, we take into account sectoral frameworks, the remuneration policy adopted by the General Meeting, and the transparency and accountability requirements applicable to top remuneration. The goal is a remuneration package that the company can bear, that is legally sound, and that aligns with the governance agreements between the Executive Board, the Supervisory Board, and the shareholders.

Employee participation in mergers and acquisitions

The Works Council plays a leading role in mergers, acquisitions, and reorganizations. For decisions regarding the transfer of control, entering into or terminating a significant partnership, or a far-reaching reorganization, the Works Council is entitled to provide advice pursuant to Article 25 of the Works Councils Act. This advice must be sought at a time when it can still have a substantial influence on the decision—in practice, this is often done around the time of the letter of intent. Additionally, the regulations governing the transfer of undertakings protect employees: in the event of a transfer within the meaning of Article 7:662 of the Dutch Civil Code, the rights and obligations arising from employment contracts are automatically transferred to the transferee (Article 7:663 of the Dutch Civil Code), as an implementation of European Directive 2001/23/EC. The transferor remains jointly and severally liable for one year for obligations that arose prior to the transfer. We conduct employment law due diligence, guide the employee participation process, and ensure that the personnel aspects of the transaction present no surprises.

Conflicts in the boardroom and the inquiry procedure

Sensitive conflicts often arise where interests clash between directors, supervisory board members, and shareholders. We assist parties in disputes concerning suspension, dismissal, liability, and the conduct of business within the company. Sometimes, an inquiry procedure before the Enterprise Chamber is the appropriate means to have the course of events investigated and to put things in order. Our lawyers litigate where necessary, but often first seek the path of negotiation, conciliation, or mediation — discreetly and with an eye to the continuity of the company.

Why MKB Juristen?

Corporate employment law requires legal experts who master both employment law and corporate law, and who understand the dynamics of a boardroom. In our mixed teams, lawyers and in-house counsel work together, allowing you to combine legal acumen with practical, business-oriented support — at competitive rates. Whether you are a listed company facing a complex board dispute or a family business saying goodbye to its director: we think proactively at the boardroom level and on the shop floor. For a full overview of our services, see Arbeidsrecht.