A US SaaS Company's First Dutch Termination: 14 Months, EUR 180K

The hire looked perfect on paper. Marcus, the new Sales Director for EMEA, joined TrueStack's Amsterdam office in January with a base salary of EUR 120,000, a company car allowance, and an indefinite contract. The VP of Sales in Austin had recruited him personally. By July, the honeymoon was over.

Marcus was missing pipeline targets. His quarterly reviews showed a pattern: strong relationship-building, weak conversion. Two enterprise deals he had been nurturing for months slipped to competitors. The VP of Sales, Jake, had seen this movie before. Back in Texas, the playbook was simple: put him on a 30-day performance improvement plan, document the failures, and if he did not turn it around, let him go with two weeks' pay and a handshake.

Jake drafted the PIP on a Friday afternoon and sent it to the Dutch HR coordinator, Femke, for review. Femke's reply arrived Monday morning and it was not what Jake expected.

"We cannot do a 30-day PIP. Dutch law requires a verbetertraject -- a genuine improvement trajectory -- and for a director-level role, courts expect a minimum of six months. The goals must be SMART, we must provide external coaching, and we must hold documented bi-weekly evaluation meetings. If we skip any of this, a judge will reject the termination and we will be worse off than if we had never started."

Jake pushed back. Six months felt like an eternity. Femke explained further: under Article 7:669 lid 3 sub d of the Dutch Civil Code, an employer can only terminate for underperformance if the employee has been given a "sufficient opportunity to improve." The Hoge Raad's 2019 Ecofys decision established several guiding factors that courts weigh when evaluating whether that opportunity was real. Duration, coaching, measurable goals, and the employer's active role in supporting improvement are all on the list. A 30-day document designed to build a paper trail for termination would be identified as a sham by any Dutch employment lawyer -- and certainly by a kantonrechter.

Jake reluctantly agreed. In August, TrueStack launched a formal verbetertraject. An external sales coach was retained at EUR 800 per session. Bi-weekly progress meetings were scheduled. SMART goals were defined: close two enterprise deals above EUR 50K by month three, maintain a pipeline coverage ratio of 3x, and complete a structured account planning framework.

Three months in, Marcus was showing some improvement. He closed one deal. His pipeline was growing. The coach reported "engagement and openness to feedback." This was not good news for Jake, who had already mentally moved on and started interviewing replacements. But the trajectory had to continue. Pulling the plug now, with partial improvement on the record, would almost certainly fail in court.

Then, in November -- month four of the trajectory -- Marcus called in sick. He reported stress-related complaints and stopped coming to the office.

Femke delivered the news Jake dreaded: the opzegverbod had kicked in. Under Article 7:670 lid 1 of the Dutch Civil Code, an employer cannot terminate an employee who is on sick leave. The verbetertraject was frozen. TrueStack could not resume it until the bedrijfsarts -- the independent company doctor -- declared Marcus fit to work. The bedrijfsarts assessed Marcus and classified his condition as "situational incapacity": not medically ill per se, but unable to function due to workplace stress. The bedrijfsarts recommended mediation and a cooling-off period of four to six weeks.

The mediation went nowhere. Marcus's lawyer, retained at TrueStack's expense per the recommendation, argued that the verbetertraject itself had created the stress. The bedrijfsarts extended the sick leave advisory. Weeks turned into months. TrueStack was paying EUR 10,000 per month in salary to an employee who was not working, could not be terminated, and whose verbetertraject was on indefinite hold.

By February -- month seven -- the CFO in Austin was asking pointed questions. The Dutch HR coordinator, the external coach, the mediation sessions, the bedrijfsarts consultations, and Marcus's full salary were all hitting the P&L. The total burn was approaching EUR 95,000 and climbing.

In March, TrueStack's Dutch employment lawyer recommended switching to a settlement. "You have a partial verbetertraject file," she explained. "It is not strong enough to win in court, but it is strong enough to negotiate from. If you go to the kantonrechter with this file, there is a better-than-even chance the judge rejects termination entirely. Then you are stuck with Marcus indefinitely and your settlement leverage evaporates."

The settlement negotiation took six weeks. Marcus's lawyer opened at 2.5 times the statutory transitievergoeding. The statutory severance under Dutch law -- one-third of a monthly salary per year of service -- came to roughly EUR 3,300 for Marcus's 14 months of employment. But nobody settles at statutory. Marcus had leverage: his sick leave was still active, the verbetertraject was incomplete, and taking the case to court would cost TrueStack another EUR 15,000-20,000 in legal fees with no guarantee of success.

They settled at a vaststellingsovereenkomst for EUR 45,000 in severance, plus three months of garden leave at full salary, plus the employer's contribution to Marcus's legal fees of EUR 2,500.

Then came the final twist. Under Article 7:670b lid 2 of the Dutch Civil Code, Marcus had a statutory 14-day cooling-off period to revoke the settlement agreement. On day 13, his lawyer called. Marcus wanted to renegotiate. He had received a competing job offer and wanted TrueStack to extend the garden leave by one month and add a positive reference letter.

TrueStack agreed. The alternative was starting over from scratch.

The final tally, 14 months after Jake first drafted that 30-day PIP:

The Lesson

Dutch termination law is not a more expensive version of American at-will employment. It is a fundamentally different system built on the principle that employees have a right to their job, and the employer must prove -- to a judge's satisfaction -- that termination is justified. The verbetertraject is not a formality. It is a legal requirement that must be genuine, documented, and adequate. Any shortcut taken in the process becomes leverage for the employee later.

What This Actually Costs

The headline EUR 180K reflects salary continuation and settlement -- the unavoidable cost of the termination itself. Add coaching, mediation, medical, and legal fees and the all-in figure reaches EUR 211K. Timeline: 14 months from first PIP draft to signed settlement. Budgeted by Austin HQ: EUR 0.