Immediate Dismissal: What Is and Isn't Allowed?

An employee who copies confidential customer data during work hours and sends it to his personal email. A director who uses company funds for personal expenses. An employee who is repeatedly late and continues to do so despite warnings. Situations in which, as an employer, you might think: this can’t go on any longer.

Immediate termination seems like the logical solution. Letting the employee go right away, without a notice period. But legally speaking, this is the most severe measure you can take. And the rules are strict. One mistake, and the termination will be overturned by a judge—with all the financial consequences that entails.

When can you terminate someone’s employment with immediate effect?

The legal standard is clear: immediate termination is permitted only for compelling cause. This means a reason so serious that you cannot expect the employer to allow the employment contract to continue any longer—not even until the end of the notice period.

That definition is broad, but the court applies strict standards. Examples of conduct that are considered compelling cause in practice include:

• Theft or embezzlement of company property
• Serious breach of confidentiality (such as leaking trade secrets)
• Violence or serious threats in the workplace
• Refusal to perform essential work duties after repeated requests
• Fraud or forgery
• Serious dereliction of duty that continues despite warnings

Please note: it’s not just about the behavior itself, but also the context. How long has the employee been with the company? What is their position? Has there been similar behavior in the past? Were warnings issued? All of these factors are taken into account.

The procedure: acting quickly is essential

Do you have an urgent reason and want to terminate someone with immediate effect? Then you must act immediately. The law stipulates that termination with immediate effect must be issued “immediately” after you, as the employer, become aware of the urgent reason.

In practice, this means within a few days. If you wait too long, you lose the right to terminate employment with immediate effect. The court will then rule that you, as the employer, apparently did not consider the situation to be that urgent.

Steps you must take:

1. Gather evidence: Document what happened. Statements, emails, video recordings, witnesses. Make sure you can substantiate your case later.

2. Conduct an internal investigation: Hear the employee’s side of the story. This doesn’t have to be extensive, but the employee must be given the opportunity to tell their side of the story. This is known as “hearing both sides.”

3. Seek legal advice: This is no time to take chances. Have a lawyer verify whether the cause for immediate termination holds up.

4. Issue the termination in writing: Send a termination letter clearly stating the reasons for the immediate termination. Be specific: what facts, what date, and why is this an urgent reason?

5. Stay within the time limit: Issue the termination within a few days after you become aware of the urgent reason.

What if it goes wrong?

If the court rules that there was no urgent cause, or that you did not follow the proper procedure, the termination will be overturned. The consequences can be severe:

• You must pay back wages from the date of termination
• You may have to pay a transition allowance
• The employee may be entitled to equitable compensation (additional damages)
• You will be responsible for the legal costs

In short: the financial risks are significant. That’s why it’s essential to have a thorough assessment conducted in advance to determine whether you have sufficient grounds.

Practical Tips for Employers

Always document: Record incidents in personnel files. Issue written warnings in cases of persistent misconduct. This way, you build a case file that you can use later.

Be consistent: Handle similar cases in a similar manner. If you turn a blind eye to one employee’s behavior but punish another with immediate termination for the same offense, you’re exposing yourself to legal risk.

Consider alternatives: Is immediate termination really necessary? Or could you, for example, resolve the situation with a severance agreement? That may be faster and more reliable.

Seek legal advice in a timely manner: This is not an area where you, as an employer, should go it alone. Seek professional advice. The difference between a legally valid termination and one that is invalid often lies in the details.

In conclusion

Immediate termination is a powerful tool, but it also carries legal risks. As an employer, you must be certain that you have sufficient grounds, follow the procedure correctly, and stay within the time limits. Otherwise, a termination intended to provide quick clarity could turn into a lengthy and costly legal process.

Are you unsure whether there is an urgent reason in your situation? Or would you like to know how to ensure that a summary dismissal is legally airtight? Please contact us for a no-obligation consultation.