{"id":30955,"date":"2026-09-09T15:36:31","date_gmt":"2026-09-09T15:36:31","guid":{"rendered":"https:\/\/thelegalcompany.nl\/?p=30955"},"modified":"2026-09-09T15:36:31","modified_gmt":"2026-09-09T15:36:31","slug":"dismissal-of-a-statutory-director-be-aware-of-the-dual-legal-relationship-and-take-the-right-steps-at-the-right-time","status":"publish","type":"post","link":"https:\/\/thelegalcompany.nl\/en\/dismissal-of-a-statutory-director-be-aware-of-the-dual-legal-relationship-and-take-the-right-steps-at-the-right-time\/","title":{"rendered":"Dismissal of a statutory director: be aware of the dual legal relationship and take the right steps at the right time"},"content":{"rendered":"

Introduction<\/strong><\/h4>\n

If, as an entrepreneur, you are considering dismissing your director due to persistent dissatisfaction, it is important to know that this works differently for a statutory director appointed by the general meeting of shareholders than for an ordinary employee appointed purely in a functional capacity. With a statutory director, there is always a dual legal relationship: on the one hand, the corporate-law appointment and dismissal as a director by the general meeting of shareholders (or the supervisory board); on the other hand, the employment-law dismissal (the employment relationship, with all the dismissal rules of employment law). That combination can make the dismissal of a statutory director legally complex and risky.<\/p>\n

That said, the dismissal of a statutory director generally requires a less strict substantive review than that of an ordinary employee, who can only be dismissed on the basis of a complete file and the presence of a statutory ground for dismissal. If the director is dismissed by the shareholders, this usually also means the end of the employment relationship. A company, and its shareholders in particular, must be able to rid itself of a director whom it believes is not serving the interests of the company and, by extension, the interests of its shareholders.<\/p>\n

In this blog, I will take you step by step through this duality, based on the prevailing doctrine of the Supreme Court. This will help you, as an SME entrepreneur, better understand what to watch out for when parting ways with your statutory director \u2014 or when appointing a new one.<\/p>\n

Understand the dual position of the statutory director<\/strong><\/h4>\n

A statutory director has two “roles” at the same time:<\/p>\n

The corporate-law role of director: he or she is formally appointed as director\/statutory director of the B.V. Appointment and dismissal proceed in accordance with the rules of the articles of association and corporate law (Book 2 of the Dutch Civil Code).<\/p>\n

The employment-law appointment: the statutory director is usually also employed by the company. The normal employment-law rules of Book 7 apply to that employment contract, including dismissal protection, prohibitions on termination, and the statutory transition payment.<\/p>\n

This means that, both on appointment and on dismissal, you actually need to think things through twice: what must I arrange from a corporate-law perspective, and what from an employment-law perspective? And how do the two relate to each other?<\/p>\n

Dismissal route and points of attention<\/strong><\/h4>\n

Step 1: Corporate-law points of attention on dismissal<\/strong><\/h4>\n

When dismissing a statutory director, the central question is always: has the dismissal resolution been validly adopted, so that it cannot later be successfully challenged?<\/p>\n

Pay attention to the following points:<\/p>\n

1. Competent body and procedure: Check whether the general meeting or the supervisory board adopts the dismissal resolution, and how the statutory director must be given timely and proper notice to convene the meeting. My advice is to allow for a somewhat longer notice period, so that there is still room to reach an amicable settlement if needed. Make sure the agenda clearly states that dismissal will be discussed, but do not yet give an extensive explanation in that notice, as this tends to escalate matters. Save that for the meeting itself, so it can be properly explained there.<\/p>\n

2. The right to be heard: The statutory director must be given the opportunity to respond during that meeting. Failing to do so can render the resolution voidable. Try, therefore, to ask questions and to suspend the meeting to allow time for reflection before the dismissal resolution is adopted. Also offer that possibility of a suspension to the director.<\/p>\n

3. Reasoning: Although a corporate-law dismissal is, in principle, “free” (from a corporate-law perspective, you do not need a strict statutory ground for dismissal under Section 7:669 of the Dutch Civil Code), in practice it is nevertheless wise to give reasons for the resolution: what are the grounds for the dismissal (breakdown of trust, strategic disagreement, underperformance)? This plays a major role in the employment-law consequences and any damages claims brought by the director.<\/p>\n

4. Formal record-keeping: Record the dismissal resolution carefully in writing in the minutes, and report the dismissal to the Dutch Chamber of Commerce (Kamer van Koophandel) in good time. The date of the corporate-law dismissal is crucial for the further legal process.<\/p>\n

Step 2: Employment-law points of attention on dismissal<\/strong><\/h4>\n

For the employment-law dismissal of the statutory director, largely the same rules apply as for other employees, but with a few important particularities:<\/p>\n

1. Ground for dismissal:<\/p>\n

In principle, there must be a reasonable ground (for example underperformance, culpable conduct, a disrupted working relationship, or economic reasons) that justifies the dismissal and on the basis of which a court, in the event of a dispute, will confirm the lawfulness of that dismissal. A dismissal validly given by the competent corporate body cannot be reversed by the court, but the court can award damages. This judicial review can be avoided by entering into a settlement agreement.<\/p>\n

2. Consent requirements:<\/p>\n

Unlike with ordinary employees, you do not first need to go through the UWV or the subdistrict court for a preventive dismissal review if there is a valid corporate-law dismissal resolution. The Supreme Court has emphasised that this resolution carries significant weight in the assessment of the employment-law termination.<\/p>\n

3. Statutory transition payment and any additional compensation:<\/p>\n

A statutory director too is, in principle, entitled to the statutory transition payment. In the event of seriously culpable conduct on the part of the employer, fair compensation may be awarded on top of that. This is where the lawfulness review mentioned earlier comes into play.<\/p>\n

4. So make sure you have a solid file:<\/p>\n

Performance review meetings, reports, warnings and evaluations remain crucial. An “unwelcome opinion” or merely a difference of strategic insight without a substantiated file is a weak basis, and can therefore give rise to the fair compensation referred to under point 3.<\/p>\n

Core principle \u2014 corporate-law dismissal and the employment contract<\/strong><\/h4>\n

An important starting point in case law is that a valid corporate-law dismissal of the statutory director in principle also means the end of the employment contract. In other words: if the general meeting of shareholders validly dismisses the director as statutory director, the employment relationship generally ends as well.<\/p>\n

Why is that so? Because the employment-law role is inextricably linked to the corporate-law position as director. If the director loses that position, the basis for the employment relationship generally lapses as well.<\/p>\n

But this principle has important exceptions. And it is precisely there that things become complicated \u2014 and risky \u2014 for you as an entrepreneur.<\/p>\n

Exception 1 \u2014 the prohibition on termination during illness<\/strong><\/h4>\n

A crucial exception is the prohibition on termination during illness. For “ordinary” employees, you are not allowed to terminate the employment contract as long as the employee is incapacitated for work (in principle during the first 104 weeks).<\/p>\n

This prohibition on termination also applies to statutory directors. This means that, from a corporate-law perspective, you can indeed decide to dismiss the statutory director as director, even during illness, but you may not terminate the employment contract if the prohibition on termination during illness applies.<\/p>\n

The result is that the person in question is no longer statutory director (and thus no longer a director of the B.V.), but the employment contract continues, along with the obligation to continue paying salary, the reintegration obligations, and any redeployment possibilities.<\/p>\n

To prevent the above, it is important to treat your intention to dismiss the director at the general meeting of shareholders as highly confidential. Do not discuss it with the director before you have sent the notice convening the general meeting at which that dismissal will be discussed. This is because the prohibition on termination no longer applies if the sick notification is made after the date of the notice convening the meeting.<\/p>\n

Exception 2 \u2014 a fixed-term contract without an early termination clause<\/strong><\/h4>\n

Another important exception arises in the case of a fixed-term employment contract without an early-termination clause. In that case, the employment contract cannot, in principle, be terminated early under employment law, not even after a corporate-law dismissal resolution.<\/p>\n

In practice, this means that if you adopt a valid corporate-law dismissal resolution, the statutory director is no longer a director. But here too, the fixed-term employment contract continues to run until the agreed end date, because early termination is not contractually permitted.<\/p>\n

This can mean that you no longer want someone at the helm, but must nevertheless continue paying their salary for a considerable time, or arrange a buy-out settlement.<\/p>\n

A well thought-out departure arrangement, or dissolution proceedings before the subdistrict court, can offer a solution here, but this costs time and money. It is therefore better to think consciously in advance about what you will agree at the time of appointment.<\/p>\n

Other contractual arrangements affecting dismissal<\/strong><\/h4>\n

In addition to these two main exceptions (illness, and a fixed term without an early-termination option), parties can also make other arrangements that affect the end of the employment contract, such as:<\/p>\n

Specific departure arrangements linked to the corporate-law dismissal (for example, a pre-agreed severance payment or golden parachute).<\/p>\n

Good-leaver\/bad-leaver provisions in participation or share plans.<\/p>\n

Arrangements on non-competition, non-solicitation clauses and confidentiality that continue to apply even after the employment relationship ends.<\/p>\n

Finally: seek legal advice in good time<\/strong><\/h4>\n

The message from prevailing case law is clear: dismissing a statutory director is, in principle, easier than dismissing an ordinary employee, but it is not a “simple” act. It is a highly legal and time-sensitive operation with both corporate-law and employment-law components. A misstep or a delayed action in the process can lead to voidable resolutions, prohibitions on termination, continued salary payment obligations, high compensation payments, or lengthy proceedings.<\/p>\n

Seek advice in good time, therefore. At The Legal Company, our business lawyers advise SME entrepreneurs on a daily basis on the appointment, remuneration and dismissal of statutory directors. This helps you avoid surprises and stay in control \u2014 even when you need to replace a director.<\/p>\n

Blog by our employment law expert mr Hella Vercammen.<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

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