The managing director of a private company with limited liability (‘BV’) or a public limited company (‘NV’) is appointed by the general meeting of shareholders or the supervisory board. The managing director who is employed by the BV or NV of which he is also the director has a different employment law protection against dismissal compared to a “normal” employee. The dismissal of a director under the articles of association does not require prior permission from the UWV or the court. A legally valid dismissal decision of the general meeting of shareholders or the supervisory board is sufficient. Also, there must be a reasonable ground for the dismissal of a director under the articles of association. Furthermore, the managing director is entitled to the transition payment. The managing director may also be entitled to a fair compensation if there is no reasonable ground, if there is a prohibition of termination during illness or in case of serious culpable acts or omissions by the employer.
Contrary to the position of a “normal” employee, it is possible to contract with a managing director more often consecutively for a specific period. The articles of association and/or the applicable governance code often prescribe how often the managing director may be (re) appointed. Due to the less extensive protection against dismissal, it often happens that a long(er) notice period is agreed in the employment contracts of directors or that a so-called golden parachute is included.
For the managing director of an association, cooperative and mutual insurance society the same requirements apply as for the managing director of a BV or NV. With the entry into force of the Management and Supervision Act in 2021, a director under the articles of association who is employed by a foundation will be equated with this and will then enjoy the same (less far-reaching) dismissal protection.
We can advise you on your special position as a managing director and assist you if you are about to be dismissed or suspended.