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Employment dispute

As in every relationship, the one between employer and employee has its ups and downs at times too. This may lead to a dispute which, in turn, may result in the employee reporting ill. In such cases, it is important the company doctor is kept well informed about the situation that has arisen. Incapacity for work caused by an employment dispute is not the same as incapacity for work caused by illness, and therefore requires a different approach. The company doctor usually allows for a two-week ‘time-out’, during which the employer and the employee must attempt to resolve their differences. This could be achieved through mediation. If an employee refuses to help work towards a resolution of the dispute, thereby effectively making his return to work impossible, the employer has the option to temporarily suspend payment of his salary. It is therefore important to have a clear picture of the reasons why the employee reported ill.


Termination of employment

A contract of employment may end for several reasons: the employee passes away, the contract has expired, by mutual agreement, by (consensual) resignation, or by dissolution. As of July 1st 2015 the Wet Werk en Zekerheid (the Act on Work and Security, WWZ) has come into force, and is it no longer possible to go down the way of terminating a contract. As of now, the grounds for dismissal as well as the accompanying benchmarks, and the procedures on appeal are stipulated by law. A contract of employment can not be terminated unless it fulfils the benchmarks as laid down by the law.

An employer may terminate a contract of employment if there is reasonable cause, and relocation to another suitable position is not possible within reasonable times. In case your employee is incapacitated for work for the long-term, or if you would like to dismiss employees because of a reorganisation, you need to turn to the UWV WERKbedrijf. For all other causes, like poor performance and lack of confidence, you need to turn to the sub-district court. After a ruling by the UWV WERKbedrijf, both parties can appeal this ruling at the sub-district court. Next, one may appeal the sub-district court’s ruling and appeal in cassation.

Another common practice to end a contract of employment is by mutual agreement. The agreed terms of termination are recorded in a so-called settlement agreement, signed by both the employer and the employee. This way, the employee remains entitled to his unemployment benefits. Secondly, as of July 1st 2015, it is also possible for the employer to agree to a resignation by an employee. Because this alternative offers no added value over termination by mutual agreement, it is barely used.

Either way, whenever you need to let go of an employee, we would be happy to advise.


Transitional fee

As of July 1st 2015 any employee employed for at least 24 months is legally entitled to a transitional fee, regardless of whether the contract of employment was a temporary or indefinite one. The right to a transitional fee is therefore not dependent on being awarded by a judge, but stems from the law. It is the intent of the legislator for the transitional fee to be used to find another job.

Culpability and age of the employee are in principle irrelevant. An employee is entitled to a transitional fee if the contract of employment:

  • Ends by termination by the employer
  • Ends by dissolution at the request of the employer
  • Expires legally and isn’t extended by the employer.

The transitional fee is also due in cases the termination, dissolution or non-extension is initiated by the employee but as a result of culpable behaviour by the employer.

Even though the transitional fee is in principle not due if a contract is terminated by mutual agreement, in practice the transitional fee is used as a starting point for negotiations. The employee will receive 1/6th of his monthly salary for every six months during the first 120 months of the duration of the contract of employment (next, it will become 1/4th of his monthly salary). The transitional fee is capped at €76.000 or, if this is higher, an annual salary. Contrary to before, no cap is put in place for terminations shortly before the employee reaches the legal age for AOW or retirement. In these instances, the employer will have to determine whether to pay an employee near retirement a transitional fee higher than what the employer would have to pay him up until he reaches the legal age for retirement, or if he prefers to keep the employer in their service. In principle, the transitional fee will be the maximum an employer receives. An additional (equitable) compensation shall only be awarded if the discontinuation or dissolution of the contract of employment is due to culpable behaviour by the employer. This will not quickly be the case.


Instant dismissal

In certain circumstances, it is possible to terminate an employee’s contract of employment with immediate effect. However, there must be a compelling reason to do so; for example, if the employee is guilty of theft or threatening behaviour. It is possible to launch an investigation into the facts, if need be, but this will have to be conducted with the necessary urgency. This way, the employer clearly demonstrates the cause for instant dismissal is of such severity he no longer wishes to continue the employment relationship. The compelling reason must be mentioned when the employee is dismissed, and the employee must be given the opportunity of stating his own position vis-à-vis his dismissal. If the dismissal is not given with immediate effect, or if the employee is not allowed an opportunity to provide his version of events, the courts may decide that the dismissal is unlawful. In such a case, the contract of employment will continue to be effective. As a result of instant dismissal, the employee will lose his job with immediate effect. Moreover, it is very likely he will be denied WW-benefits because of culpable unemployment.

With the implementation of the WWZ the procedure to appeal an instant dismissal has changed. Employees who disagree with their instant dismissal and would like to continue their job, have to appeal to the sub-district court to request an annulment of the dismissal. Such a request needs to be submitted two months, at the latest, after the instant dismissal was given. An employee who no longer wishes to continue his job, but equally does not agree to the instant dismissal, may request the sub-district court for reasonable compensation.

If the contract is terminated by the employer, an employee is also, in principle, entitled to a transitional fee (please refer to “Transitional Fee” for more detail). An employee will only partially or entirely forfeit this benefit in case of culpable behaviour. As explained, an employee may, at their request, have his immediate dismissal annulled in court. This means the contract of employment is not terminated and that, in principle, the employer has to continue to pay his salary. In order to avoid this risk, a request to grant a provisional dissolution of the contract of employment may be submitted to a sub-district court after the immediate dismissal has been given. Since the implementation of the WWZ on July 1st 2015 this option is used considerably less. This is because, nowadays, the timeframes for judges to rule in on requests of annulments of dismissal have been shortened substantially. Also, such an annulment has become less secure now that it may be appealed and appealed in cassation.

We would gladly advise you on all matters related to instant dismissal of an employee.

© 2016 Van Hall Advocaten Arbeidsrecht