Amsterdam Attorney Managing Director
Our Dutch employment law attorney and solicitor (lawyer) in Amsterdam counsel both employers and directors under the articles of association. The managing director is distinct from other employees: a dual employment relationship exists. The director is appointed by: the General Meeting of Shareholder or by the Supervisory Board and has an employment contract (or a Management Agreement) with the company. The managing director is registered in the Dutch Register of the Chamber of Commerce. In case of an employment contract, the managing director is also considered an employee of the company and Dutch Employment Law applies in most cases to this situation.
Dismissal of a Managing Director in The Netherlands
The appointment of the managing director can be rescinded at any time, where there are reasonable (fair) grounds, like not performing satisfactorily, provided the right procedure had been followed. This regards the same entity that is competent to appoint the managing director (Article 2:224 of the Dutch Civil Code). The procedure is listed in the articles of association of the company. The director should be given the opportunity to render his opinion about the intended dismissal. The managing director is also allowed to bring a legal advisor to the meeting.
Since July 1, 2015, the General Meeting of Shareholders must also inform a director about the reason for dismissal. Also it must be considered whether the director can be reassigned within the company. According to the Rotterdam District Court, a difference of opinion with a manager about the policy to be followed is a reasonable ground.
- A lack of performance
- or unacceptable behavior
may also be a fair ground for dismissal.
Compensation Dutch Law
The director cannot claim reinstatement of the employment. He can only apply to the court for compensation. Managing directors are entitled to a transition payment
- if the employment agreement has continued for at least 24 months
- and the employment contract is terminated or not extended by the employer.
A high(er) severance payment may be imposed by the court if the employer has engaged in ‘seriously culpable conduct’ or if there are no reasonable grounds for termination the agreement.
Also the contractual and statutory notice periods apply. This means that the employer should inform the director in due time about the termination of a temporary employment agreement.
For more information about the legal position of the Managing Director in The Netherlands, please contact our Dutch employment lawyer in Amsterdam: 0031205221999