Consequences of Invalid Summary Dismissal in Amsterdam

# Consequences of Invalid Summary Dismissal in Amsterdam In the dynamic labour market of Amsterdam, where the subdistrict court of the Amsterdam District Court frequently handles cases concerning summary dismissal due to dereliction of duty, severe sanctions come into effect upon annulment. Article 7:686 of the Dutch Civil Code (BW) provides employees in the North Holland region with options: reinstatement of the employment contract or compensation for damages. ## Reinstatement of Employment In the event of a successful claim by the Amsterdam subdistrict court, the employer must reinstate the employee within four weeks with retroactive effect. Wages, holiday pay, and benefits, including Amsterdam collective labour agreement (CAO) allowances for hospitality or tech sectors, will be paid retroactively up to the date of the ruling. Refusal to comply results in a fine of up to €20,000 per day (Article 7:683(6) BW), as recently ruled in a case before the Amsterdam District Court. ## Alternative Compensation If the employee opts for financial compensation, this amounts to at least the transition payment plus one-third of a month's salary per year of service, with a maximum of two additional months' salary. In a case comparable to *Ballast Nedam v Employee* in Amsterdam, the court awarded €150,000 due to lost earnings in the city's expensive rental market. ## Practical Challenges Reinstatement rarely succeeds due to disrupted relationships in Amsterdam startups or among multinationals in the Zuidas business district, often leading to negotiations via local law firms or a settlement agreement. Employers risk high costs, reputational damage, and negative publicity in local media. ## Tips for Employers in Amsterdam Document all matters thoroughly and consider mediation at the Legal Counter Amsterdam. Employees must act swiftly and initiate proceedings within two months at the Amsterdam District Court. This article highlights the financial and relational risks of failed dismissals in the capital.