Under Dutch law, it is often easier to seek termination due to economic or organisational reasons rather than personal reasons. Employers have discretionary power regarding the decision to restructure their organisation. However, employers must have a sound business case to do so and will need to substantiate intended redundancies with objective arguments, documents and figures.
The Utrecht Cantonal Court recently considered whether an employee can be offered a different position following a TUPE transfer. The court ruled that TUPE legislation does not require an acquirer to offer a transferred employee exactly the same position. The acquirer may implement changes to a role if these changes are deemed necessary from an organisational perspective.
The Supreme Court recently confirmed that an employee's entitlement to continued payment during illness will lapse in full if he or she refuses to perform alternative suitable work. This means that the employee's right to salary for the period during which he or she was ill will also lapse.
The Senate has adopted a new bill which provides for several changes to Dutch employment law. Among other things, from January 1 2015 it will no longer be possible to agree on a probationary period for fixed-term contracts that do not exceed six months, or to include a non-compete clause in fixed-term contracts unless this is substantiated in writing by a significant business or service interest.
Authoritative Dutch market research company TNS NIPO and Statistics Netherlands recently published the results of a study of the national labour market in a report entitled Dynamics of the Dutch Labour Market: Focus on flexibility. The research would suggest that employers still prefer to enter into temporary and flexible working relationships rather than permanent employment relationships.
The minister of social affairs and employment has submitted a legislative proposal that will significantly revise the dismissal laws. The proposal will limit the use of probation periods and non-compete clauses and make changes to termination procedures. While it is anticipated that these changes will be implemented, it remains to be seen whether, and in what form, the current legislation will be amended.
On mutual termination of an employment contract, the parties conclude a settlement agreement, which normally includes a final discharge clause, under which the parties are no longer entitled to institute claims or disputes regarding the settled issues. Parties are advised to be precise as to which issues or disputes are settled in the contract, and consequently fall under the scope of the final discharge clause.
It is vital that industrial companies know the details of the health, safety and environmental regulations in order to protect their employees. Compliance with such regulations should be a top priority. In addition, employers should be aware of the actions to take in the event that non-compliance is established or an incident takes place.
In spite of the implementation of the EU Posting Directive, foreign employees seconded to the Netherlands do not always receive what they are entitled to. However, a new proposed directive contains specific provisions concerning contractors' obligations and (joint and several) liability with respect to compliance with the relevant terms and conditions of employment of posted workers by subcontractors.
Day-to-day management and supervisory board members are increasingly subjected to strict regulatory rules. Within financial institutions, the rules regarding the suitability of these people for such positions have become increasingly strict and the remuneration policies have become more restrained. As yet, the consequences from an employment law perspective are unclear.
An eight-year legal battle between a trade union and Heineken has finally been resolved by the Supreme Court. Employers purchasing assets or taking on outsourced services from a group business whose staff is employed by another group company must be clear about which staff are assigned to the transferring undertaking, and whether they are assigned permanently, in order to avoid infringing the EU Acquired Rights Directive.
In March 2012 several amendments were made to the Collective Redundancy (Notification) Act. Despite the anticipated difficulties of the amendments, one year on, no judgments have been published in respect of employees requesting their termination to be annulled on the basis of non-compliance with the act. Nevertheless, employers are advised to remain alert.
The new Dutch government is seeking consent from the unions to reform key aspects of the employment legislation. Among other changes, the coalition agreement proposes to abolish the existing dual dismissal system and to replace it with a preventive review of a dismissal by the UWV WERKbedrijf, the public employment service. The government also intends to reform the unemployment benefits system.
Under new legislation, from January 1 2012 a managing director who is appointed based on the articles of association of the company is no longer also an employee under Dutch law. The main reason behind the change is to provide that as a result of termination of the position, the managing director is no longer automatically entitled to a severance payment based on the Cantonal Court Formula.
A new employer which takes over the activities of a bankrupt company should be aware that it cannot always start with a clean slate, as a number of employment obligations may apply. If a new employer is regarded as a successor employer, it is possible that in cases of termination, the severance package will be based on the length of service accumulated with the bankrupt former employer.
One key element of Dutch employment law is the obligation that the employer continue to make salary payments during the first 104 weeks of illness. Under Dutch law an employee is deemed to be sick if he or she is not able to fulfil his or her contractual obligations (ie, his or her own job) fully and completely.
Dutch employees enjoy strong protection against dismissal, with the sole exception of managing directors, who do not enjoy the same levels of protection due to their dual role (ie, they have both a corporate position and an employment agreement with the company). This update outlines the key issues to consider when dismissing a managing director.
Discussions are taking place on the government's plan to increase the pension age under the General Old Age Act from 65 to 67. Although there is no legislative proposal as yet, such an increase is unlikely to affect the debate on the forced termination of employment agreements.
As of March 21 2009 employers can no longer opt for the special working hours reduction. However, in response to the ongoing economic crisis, the government has introduced a subsequent measure - the Partial Unemployment Benefits Decree, which has now come into effect.
The House of Representatives is considering a legislative proposal intended to provide works councils of public limited companies with the right to speak in respect of proposed resolutions of the general meeting regarding, among other things, the company's remuneration policy and the appointment, suspension and dismissal of board members.