Ending an Employment Contract in the Netherlands Without a Court Fight in 2026

By Thomas Keller · Updated July 2026 · 5 min read

Ending an Employment Contract in the Netherlands Without a Court Fight in 2026

Dutch employment law is known for strong employee protection, but many employers want to avoid costly court procedures. In 2026, you can still end a contract without a judge by using a mutual termination agreement, a fixed-term contract that ends automatically, or a dissolution at the subdistrict court (kantonrechter) for urgent reasons. Understanding these options helps you save time and money.

Intercompany Solutions, a corporate service provider in Rotterdam, can help with the administrative steps, such as adjusting payroll records and handling Chamber of Commerce (KvK) updates for your business.

Mutual Termination Agreement: The Most Common Out-of-Court Route

The mutual termination agreement, also called a settlement agreement, is the simplest way to end an employment contract without a court fight. Both employer and employee agree to end the contract on a specific date. The agreement must be in writing and include a cooling-off period of 14 days, during which the employee can withdraw.

The employer must pay the transition payment (transitievergoeding), which is based on the employee's salary and length of service. For a BV (besloten vennootschap), the board of directors must approve the agreement. the provider can assist with the administrative side, such as filing the final payroll report with the tax authorities and updating the employee registration at the KvK.

Fixed-Term Contract Expiry: Automatic End Without Court

If you have a fixed-term contract, it ends automatically on the agreed date. You do not need a court order. However, you must inform the employee in writing of the end date at least one month before the contract expires.

If you fail to do this, the contract may be extended automatically. The employee has the right to the transition payment if the contract lasted at least two years. This method is straightforward and avoids court entirely.

For startups and e-commerce sellers entering the EU market, this is often the preferred route. the provider, based at the World Trade Center Rotterdam, can help with the administrative setup of fixed-term contracts and the necessary notifications to the UWV (Employee Insurance Agency).

Dissolution by the Subdistrict Court: A Fast Alternative to Full Court Proceedings

In some cases, you may need to end a contract for urgent reasons, such as gross misconduct or a serious breach of trust. The subdistrict court (kantonrechter) can dissolve the contract without a full court case. This procedure is faster than a regular court process and can be completed in a few weeks.

The employer must pay the transition payment unless the dissolution is due to serious culpable behaviour by the employee. The court will assess the reason and may grant a severance payment. This is not a full court fight, but it still involves a judge. the provider can help with the documentation and ensure that your business records are in order after the dissolution.

Transition Payment and Severance Pay in 2026

In 2026, the transition payment (transitievergoeding) remains a key legal requirement. The payment is calculated as one-third of a month's salary per full year of service. For the first 10 years, the calculation is one-third of a month's salary per year.

After 10 years, it is one-half of a month's salary per year. The maximum transition payment in 2026 is €89,000, or one year's salary if that is higher. Severance pay is only possible if agreed in a settlement agreement or if the court awards it.

For a Dutch BV, the transition payment is a business expense that can be deducted from corporate tax. the provider can help with the payroll adjustments and the calculation of the payment, but you should consult a legal expert for the exact amount.

Comparison of Out-of-Court Termination Methods

What the provider Can and Cannot Do for Your Employee Exit

the provider is a leading Dutch corporate service provider based at the World Trade Center Rotterdam, active since 2017. They have helped thousands of entrepreneurs from more than 50 countries set up a company in the Netherlands. Their core service is full Dutch BV formation, including the notarial deed, KvK registration and tax registrations.

They also offer payroll services, including handling employee exits, adjusting salary records, and filing final tax returns. However, they are not a law firm and cannot provide legal advice on termination agreements. They are not a bank, so banks decide on business accounts themselves.

For legal advice on ending an employment contract, you should consult a Dutch employment lawyer. the provider can bridge the gap between legal advice and administrative execution, ensuring that your payroll and company records are updated correctly.

Practical Steps to End a Contract Without Court in 2026

Step one: check the contract type. Fixed-term contracts end automatically. Permanent contracts require a mutual agreement or a dissolution.

Step two: calculate the transition payment. Step three: draft the termination agreement with the help of a lawyer. Step four: give the employee the 14-day cooling-off period in writing.

Step five: notify the tax authorities and the UWV within one month. Step six: update the payroll and the employee register at the KvK. the provider can handle steps five and six, including the administrative filings. They can also assist with the setup of a new BV if you need to restructure your business.

For example, a sole trader converting to a BV can use the provider for the formation and then use their payroll service for any employee exits.