Dissolution during the notice period

It is commonly accepted for an employee to initiate proceedings for dissolving an employment contract at the time the employer has received the approval of the UWV to give notice for termination. The Supreme Court recently gave a clarification on the question how a request for dissolution of the employee during the notice period should be handled. Read more...

 

Introduction
In the Netherlands it is generally the employer who determines the course of proceedings of  a termination of an employment. The employer may choose to end the employment contract by giving notice (after having received permission from the UWV) or by dissolution through the subdistrict court.

 

In a situation where there is no offer of compensation for an employee's contract being terminated, an employee has a number of options available after the employer has received the permission for dismissal of the UWV and the contract has been terminated. The employee may, for instance, follow the generally accepted route of initiating a procedure claiming unfair dismissal. Such a procedure may easily take between one and two years. Alternatively, the employee may choose to submit a request for the contract to be dissolved prior to the end of his period of notice, and also request compensation. An employee is free to submit such a request at any time. The advantage of the dissolution procedure is that an employee receives a clear decision in the shortest time possible.

 

Lucky shot
A dissolution procedure initiated by the employee during the period of notice was often a so-called 'lucky shot'. In other words, the final outcome of the procedure was totally unpredictable. Some judges upheld an employee's dissolution request; others dismissed it by arguing that the employee was in a position to initiate a claim for unfair dismissal as that was the way to proceed.

 

Facts
In a recent judgement on 11 December 2009, the Supreme Court clarified how such a request for dissolution of an employment agreement should be dealt with. The case in question concerned a female employee who had worked for a firm for 18 years. Having received permission from the UWV, the employer ended her employment contract as per 1 January 2009. The employee submitted on 10 November 2008 a request for dissolution of the employment agreement on the grounds of changed circumstances and claimed compensation of Euro 40,000 (gross) for the termination of the employment agreement. The employer then terminated the employment agreement for a second time without taking into account the period of notice in order to frustrate the dissolution procedure initiated by the employee. (The basis for the employer giving notice a second time is not discussed in this article. Readers are referred to the article in this newsletter entitled, 'Damage liability from contract termination: an abuse of rights?'). The judge of the subdistrict court dissolved the employment contract as per 29 December 2009 and awarded compensation of Euro 27,500 (gross).

 

Supreme Court
The employer lodged an appeal. Amsterdam Appeal Court upheld the judgement of the subdistrict court. The employer then applied to the Supreme Court. The Supreme Court ruled that dissolution of the employment contract following its termination is allowable but that the dissolution can only apply to the remaining duration of the contract. The determining factor here is whether there has been such a change in circumstances that the employment contract has, in effect, has to be terminated on an earlier date than the date of notice. An employee needs to present (a) compelling argument(s) concerning the additional conditions that have arisen on the basis whereof the employment contract should end earlier by means of dissolution before the date on which the contract would otherwise have terminated by notice. Examples of circumstances that an employee might present are that there was a serious deterioration in the working relationship, bullying by the employer, suspension of the employee or gaining new employment, as a result of which the employee wanted to end the employment contract during the period of notice.

 

Compensation
The question remains as to the level of compensation that should be granted to the employee in such a dissolution procedure. The Supreme Court has not provided overall clarity but has decided that assigning compensation in such a situation should take into account the fact that notwithstanding the dissolution by the subdistrict court the employment contract would be terminated on short notice because notice was already given. Furthermore, the Supreme Court keeps open the possibility for an employee to present a case for unfair dismissal following a dissolution procedure.

 

Conclusion
As regards compensation, the situation of an employee is very much dependent upon the dismissal route which is chosen by the employer. Up to now an employee had an option for getting this around by submitting a request for dissolution of an employment contract during the notice period. However, the ruling by the Supreme Court as referred to above has somewhat undermined this practice. From now on, an employee will have to present extremely strong arguments in order for a judge to award the requested claim.