What to Do in the Event of a Labor Dispute? Practical Tips for Employers and HR

A workplace conflict is one of the most difficult challenges for an employer or HR professional. What starts as minor irritations between coworkers or tension between a manager and an employee can escalate into a strained working relationship. But when exactly does that happen? What are your options as an employer? And how do you ensure you’re on solid legal ground?

In this blog, we explain in simple terms how to recognize, prevent, and resolve workplace conflicts. We also discuss the legal aspects of the matter, such as termination based on the “g” ground (deteriorated working relationship).

What exactly is a labor dispute?

The term “labor dispute” is commonly used in practice, but the law refers to a “distressed employment relationship.” There is no exact definition. In case law, this often refers to situations in which trust between the employee and employer has broken down, communication has stalled, and cooperation has become virtually impossible.

Examples of situations that can lead to a conflict:

A mismatch between personalities or expectations
Inappropriate behavior or persistent criticism without improvement
A Failed Workplace Romance
Poorly functioning teams or conflicting leadership styles

The Role of HR: Prevention Is Better Than Cure

Before you, as an employer, resort to legal measures, it is important to engage in dialogue. In many cases, misunderstandings can be resolved through open communication. HR plays a key role in this process. HR professionals can often mediate in a neutral manner and create a safe environment for discussion where conflicts can be addressed.

Tip: Make sure your organization has a code of conduct and clear guidelines for communication and collaboration. This will help you identify problems early on.

Mediation: A Professional Solution for Ongoing Tensions

If you’re unable to resolve the conflict internally, bringing in an independent mediator is a wise move. This can be done on the advice of the company physician—for example, if the issue involves illness caused by work-related stress—but you can also engage a mediator on your own initiative.

Mediation often provides an opportunity to express emotions, clear up misunderstandings, and reach agreements about the future. Sometimes this leads to the restoration of the working relationship. In other cases, the parties part ways by mutual agreement.

When a separation is unavoidable: the settlement agreement (VSO)

What if mediation doesn’t lead to a solution? Or if it’s immediately clear that continuing to work together is no longer an option? In that case, a termination by mutual agreement through a settlement agreement (vso) may offer a solution. This avoids legal proceedings and allows for customized agreements regarding, for example, the termination date, compensation, and payments.

Please note: Drafting a good VSO requires careful attention to detail. As an employer, you want to avoid running into problems later on, such as with the UWV or in small claims court. We’re happy to help you draft a watertight agreement.

Termination Based on a Strained Working Relationship

If the parties truly cannot reach an agreement and the working relationship has become irreparable, termination through the courts may be the last resort. This is done on the basis of the so-called “g” ground (Article 7:669(3)(g) of the Dutch Civil Code).

A judge will terminate the employment contract only if:

There is, in fact, a lasting disruption of the employment relationship;
It is not reasonable for the employer to continue the employment relationship;
Reassignment within the organization is not possible;
There is no prohibition on termination (for example, due to illness, pregnancy, or whistleblower status).

In other words: the case file must be in order. That means: document everything, try to resolve the conflict, and demonstrate that you have carefully followed all the steps.

Get good advice if you’re involved in a workplace dispute

Labor disputes can have a major impact on the entire team, your organization’s reputation, and your bottom line. So make sure you handle the situation properly, take prompt action, and have a solid legal foundation.

This blog was written by Stijn Blom, Esq., an employment law attorney at Arbeidsadvocaat.nl B.V. Stijn has extensive experience in employment law and assists employers and employees on a daily basis with a wide range of employment law issues. From dismissal cases to drafting watertight contracts and policies—with his practical and personalized approach, he helps employers and employees move forward. Want to learn more? Visit Stijn’s page.

Arbeidsadvocaat.nl is happy to work with you to find solutions if you have questions about an ongoing dispute. Please feel free to contact us .

April 2025