Reinier advises national and international companies
reinier.russell@russell.nl +31 20 301 55 55A statutory director may be dismissed by a shareholder resolution. In that case, the employment contract ends too. However, regular dismissal law does apply to this dismissal. If this is not complied with, it may lead to a substantial compensation for the dismissed director under the articles of association.
A statutory director may be dismissed by a shareholder resolution. In that case, the employment contract ends too, without the need for a permit from the UWV or the dissolution of the contract by a court. However, a statutory dismissal ground is required. If there is no statutory dismissal ground, this could lead to substantial compensation for the dismissed director under the articles of association. This can be seen from a recent decision of the Amsterdam District Court.
An international wholesaler in flowers and plants in Aalsmeer dismissed its director as a statutory director. The director contested this at court: he claimed to be only a nominal director. And indeed, there was no appointment decision to be found. However, this did not help the director. He was listed as a statutory director in the Commercial Register. And this title was also included in his last employment contract. The court thus found that he had indeed been dismissed as a statutory director and that therefore the employment contract had ended. Game, set and match for the company?
No. The company claimed that the director had been dismissed because of culpable acts and that, as a consequence, no severance pay or transition compensation was payable. Also, the notice period would no longer apply. However, the court did not agree with this. The accusations were not serious enough.
As a result, the wholesaler had terminated the employment contract without a good reason. Therefore, the employee is entitled to a fair compensation, in addition to other statutory and contractual compensation. The employer must pay a total of over € 550,000. This includes:
Added to this are the legal costs and statutory interest.
Do you have any questions about the dismissal of a statutory director? Have you been dismissed as a director and do you want to know what your rights are? Or do you, as a company, want to avoid additional costs in the event of a dismissal? Please contact our labour law specialists:
A statutory director can be both a director and an employee of a company. What are the consequences if a director under the articles of association is dismissed? What do the company and the director have to keep in mind?
Job titles, such as managing director, CEO, director, and authorised director, are common. From a legal point of view there are just two different jobs. So what are the differences and who is authorised to do what?
A director under the articles of association is appointed by an appointment decision by an authorised body. What might be the consequences if this decision was not established in writing?
On Monday 4 November 2024, Russell Advocaten Russell Advocaten will host a seminar on Dutch labour law for diplomats, consular agents, and administrative staff from Embassies and Consulates in collaboration with Diplomat Magazine.
On Wednesday 2 October 2024, Jan Dop will be one of the members of the panel that will present timely labor and employment law issues to Primerus clients.
On Tuesday 24 September 2024, Reinier Russell and Jan Dop will speak at the Technical Meeting of PAiE, the organisation of professional accountants in Europe.
