Employment law, title 10 of book 7 from Civil Lawbook, apply when between parties there is question of an employment contract. Often, to protect economic “weaker” employees, most of the by us employment law included provisions, ¾ of this is forced law. These are provisions that are (almost) impossible to be deviated from in agreements. The question about whether or not you can speak of a employment agreement is important to set the rights and obligations in de agreement for all of the involved parties.

What does the law tell us?

In article 7:610 part 1 Civil Lawbook a employment agreement is defined.

“The employment agreement is a agreement where one party, the employee, binds to be employed of the other party, the employer, for wage during a certain period of labor.”

From this definition appears three elements you can separate from each other, namely:

  1. The obligation to provide (personal) work;
  2. The obligation to pay wages; and
  3. To be employed of the other party (authority)

Are these elements present, then you can speak of an employment arrangement and the provision of employment law is applied to the agreement. This seems reasonably simple, but it’s not always that easy to see if there is an employment agreement. The question about how an agreement should be qualified, is frequently presented to a judge. Also in a recent arrest of the Supreme Court.

Jurisprudence

One of the most important arrests of the Supreme Court (Groen / Schoevers, HR November 14th 1977, NJ 1998/149) where is explained when you can talk about an employment agreement is from the year 1997. In this arrest, the Supreme Court considered, for as long as it’s relevant, the following:

“For the question whether or not a legal relationship should be qualified as a employment agreement, or as a contract for services, there is decided what parties had in mind when signing the agreement, partly taken into account is the way they gave a factual performance to the agreement and therefore then gave their own meaning to it. ”

After this arrest, there was attached considerable importance to the intentions of both parties. Do parties intentionally have started an employment agreement? Currently in practice, mostly the stronger employer is the one who decides this, in this arrest this was seen as erosion of the agreement.

Even after 1997, the Supreme Court multiple times has commented on about the question when a agreement can be qualified as an employment agreement. The arrest from 1997 stayed as the base. In a recent arrest the Supreme Court actually considered that the meaning that was awarded, wasn’t right.

ECLI:NL:HR:2020:1746

In its arrest from November 6th 2020, the Supreme Court has made a clear difference between the two phases, namely:

Phase 1: the content of an agreement; and
Phase 2: the qualification of an agreement

The Supreme Court clarifies that in the first phase the rights and obligations should be determined by explanation. The question about which rights and obligations are determined by the parties must be answered on the basis of the Haviltex criterion. This Haviltex-criterion is – shorty viewed – looked at the purpose which parties could assign and at what is reasonable to expect from each other.

In the second phase must be looked at if the determined content of an agreement meets the meaning of the artikel 7:610 BW. Does the agreement meets this requirement, then the agreement is being designated as a employment agreement. Different than expected based on arrest of the Supreme Court from 1997, in this it isn’t relevant if parties also really meant to include the agreement under the statutory regulation of an employer agreement.

Regarding the arrest from 1997, the Supreme Court considered the following:

“Different from what is derived from the arrest Groen / Schoevers, the meaning of parties doesn’t play a part in the question if an agreement is designated as an employment agreement.”

Conclusion

The question about whether or not an agreement is designated as an employment agreement is relevant to see if the agreed rights and obligations meets the legal description of the employment agreement. In other words, after the agreed rights and obligations are determined (explanation), the agreement can be rated to see if it is has characteristics of an employment agreement (qualification). If parties meant to conclude an employment agreement is, other than expected, not important for the question if an agreement should be designated as an employment agreement.

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A lot of companies are toughly toughed by the Corona crisis, should be clear.
The expectation was and still is that companies need to take measurements to save themselves. One of these measurements in this case is for companies to say goodbye to some of its’ employees to limit the (wage) costs. Meanwhile, the first big re-organizations are announced and launched.

Dismissal due to commercial interests

When a company wants to say goodbye to an employee because of circumstances in this company, we call this dismissal due to commercial interests. With commercial interests, there can be thought of:

  • Poor financial situation of a company
  • Reduced availability
  • Organizational and/or technical changes, like automation
  • (partly) Cessation of operations
  • Business relocation

When a employer wants to dismissal an employee due to commercial interests, the employer should ask permission to the UWV in the beginning, by asking for dismissal application. The UWV will investigate the cause of the dismissal of the workplace. The employer should be able to show that:

  1. There should be a question of commercial interests
  2. Because of this, functions expire, including the one from the employee;
  3. Both employee turnover and redeployment are not an option anymore, whether or not with education

If the UWV has featured enough information and the dismissal application is taken in progress, the concerning employee gets the chance to react to this, to defend themselves. After the reaction of the employee is received, the UWV decides if there is a second (and maybe a third) round, or if they received enough information to decide about the dismissal application.

Only when the UWV has given permission for the dismissal, the employer can terminate the employment agreement. This permission is being called a dismissal permit. In some cases there is a cancellation ban. This is, for example, the case with a sick or pregnant employee. In that case, the employer cannot terminate the employment contract, not even with the permission of the UWV.

The influence of Corona

In view of the foregoing, the existence of a bad financial situation is not the only reason for which a business economics reason can be assumed. Yet it is expected that this will often be the business economic reason that will be put forward in the coming reorganizations.

Although demonstrating poor(er) results will not be difficult for many companies, given the current crisis, good financial substantiation for this reason is of great importance. This concerns not only a poor financial situation at the moment, but also an expectation that this poor financial situation will last for at least 26 weeks if no measures are taken. After all, the loss of jobs must be necessary for business reasons.

In the context of this necessity of job losses, it is also important which other measures have been taken or could be taken to prevent dismissal. In this context, consideration can be given to applying for the so-called NOW scheme.

NOW scheme 1, 2, 3

Until recently, making economic dismissals during the period in which the NOW scheme was used had an influence on the amount of the NOW subsidy. During NOW 1.0, a company was fined 50% of the dismissed employee’s wages. In addition, the wage bill of the dismissed employee was deducted from the final subsidy. During NOW 2.0, there was no longer a fine, but the employee’s wage bill was still deducted from the final subsidy.

We have now arrived at NOW 3.0. The subsidy deduction for applying for economic dismissal no longer applies under NOW 3.0. Under NOW 3.0, there are no longer any consequences for the amount of the subsidy if an employer requests dismissal for economic reasons. However, the employer is obliged to make every effort to guide people who will lose their jobs to new work.

With the expiration of the discount on the subsidy for applying for dismissal for economic reasons under the NOW 3.0 scheme in force from October 1, 2020, the doors to submitting a dismissal application for a commercial reason are again fully open. It is therefore expected that companies, in an attempt to keep their heads above water, will use this option to say goodbye to employees in order to limit (wage) costs. As noted at the beginning of this contribution, the first (major) reorganizations have now been announced.

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Evidence can be obtained unlawfully for various reasons.
In many cases, employment law concerns evidence that has been obtained in a way that compromises privacy. This could include secretly recording or having an employee followed.

Illegal obtained evidence

In a specific case, whether evidence has been unlawfully obtained will be assessed on the basis of all the circumstances of the case (Supreme Court July 11th 2014, ECLI:NL:HR:2014:1632). But what is the consequence if it were to be ruled in an employment law procedure that evidence was unlawfully obtained? Can this evidence still be relied upon or will it have to be ignored by the judge?

Article 152 RV stipulates that evidence can be provided by any means and that the appreciation of the evidence is left to the judge’s discretion, unless the law provides otherwise. The fact that evidence has been obtained unlawfully does not automatically mean that the judge should not pay attention to this evidence and that this evidence must be excluded.

The general social interest in having the truth come to light in legal proceedings and the interest that parties have in being able to prove their statements in legal proceedings outweighs the interest in excluding evidence. Only if there are additional circumstances is it justified, according to established case law, to exclude evidence (Supreme Court April 18th 2014, ECLI:NL:HR:2014:942).

The foregoing will be different in other legal areas, such as criminal law.

Amsterdam Subdistrict Court ruling June 18th, 2020

The question of whether there is unlawfully obtained evidence and, if so, whether this would mean that this evidence should be disregarded in an employment law procedure, was recently addressed in a ruling by the Amsterdam District Court came. In the case in question, an employee had been summarily dismissed. To prove the compelling reason presented by the employer – in short, reporting sick contrary to the truth, which seriously damaged the employer’s trust – the employer brought into the dispute the employee’s WhatsApp conversations with, among others, her boyfriend.

During her work, the employee used a colleague’s laptop shortly before her dismissal. The employee has installed a WhatsApp application on this laptop. Apparently the employee was not aware that WhatsApp messages later exchanged via her phone were also visible on the laptop. At some point the employee reported sick. During the employee’s absence, another employee started using the laptop. WhatsApp conversations of the employee who was later summarily dismissed were also revealed.

The WhatsApp conversations showed that the employee was not sick at all. For example, in one of the WhatsApp conversations, the employee writes that she does not know how long she can use the flu to stay at home and in another conversation she indicates that she is thinking well.

The subdistrict court judge considers that it is clear that the employer has taken note of extremely privacy-sensitive information, which the employee did not want her employer to see. However, according to the subdistrict court judge, the employee himself contributed to this by installing the WhatsApp application on the (work) laptop. According to the employer, the employee’s account was not “hacked” to access the information, but the laptop could be used via a simple password.

The subdistrict court judge goes further by considering that, if it were to be ruled that the evidence was obtained unlawfully, this does not mean, according to established case law, that the judge may not take this into account. In general, the social interest in having the truth come to light in legal proceedings and the interest that parties have in being able to prove their statements in legal proceedings outweighs the interest in excluding evidence. The foregoing is only different if there are additional circumstances. The subdistrict court judge indicates that in the present case it has neither been stated nor proven that this is the case. The subdistrict court judge therefore simply takes the evidence into account and rules that there is a legally valid summary dismissal.

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This contribution focuses on the question of what happens to the vacation days that are left after the year in which they were accrued.
In order to properly answer the previous question, the accrual of vacation days will first be discussed below. The question will then be discussed whether, and if so under what circumstances, accrued but not taken vacation days can be paid out in money. Finally, the forfeiture of the entitlement to unused vacation days will be discussed.

Accrual of holiday days/h2>
An employee is in principle entitled to at least four times the agreed working hours per week in holiday days. For full-time employment, this amounts to at least 20 vacation days per year.

The minimum number of days that an employee is entitled to vacation are called the statutory vacation days. Of course, an employer and employee may agree that an employee has more vacation days. The days that exceed the minimum are called extra-statutory holidays.

Payment of holiday entitlements

During employment

In principle, an employee cannot waive his entitlement to holiday days during the term of his employment. Not even for payment. An exception to this concerns extra-statutory vacation days. Entitlement to these days can be waived in writing in return for compensation.

At the end of the employment contract

If an employee is still entitled to vacation at the end of the employment contract,

Much has been written in the literature about the question of what exactly should be paid out. In this context, the next newsletter will consider the question of how much a day of vacation is worth.

In view of the foregoing, employees can only renounce accrued, but not taken, vacation days during their employment to a limited extent. This means there is a risk that employees will have accrued a whole reservoir of unused vacation days at the end of their employment.

Expiry of vacation days

A measure that limits the build-up of such a reservoir is that unused vacation days will expire at a certain point.

Statutory vacation days/h3>
The entitlement to statutory vacation days expires in principle six months after the last day of the year in which they were accrued. This means that an employee must have used up the statutory vacation days before July 1 each year.

The aim of applying this expiration period is to encourage the employee to take holiday.

However, the expiration period of six months only applies if the employee has been reasonably able to take the days off. If this is not the case, these days will not expire after six months, but only after five years.

Extra-statutory holiday days

The entitlement to extra-statutory holiday days expires after five years.

In principle, deviations from the rules described in this newsletter can only be made to the benefit of the employee.

Do you have a question about Payment of vacation law and decline of vacation days?

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Article 7:611 of the Dutch Civil Code stipulates that the employer and the employee are obliged to behave as a good employer and a good employee.
The article contains a vague standard. The use of such a standard ensures that there is room for legal development and that the article can function as a so-called safety net provision. The foregoing is important as the legislator cannot possibly foresee all situations or include them in regulations. For this reason, this article is also called the most important provision of labor law.

Good employment practices in particular seem to play a role in (almost) all employment law procedures. Aspects that play a role in being a good employer include the principle of equality, the principle of motivation, the principle of trust and the principle of care.

Although good employeeship should in principle be regarded as the mirror image of good employership, it does not appear to be as strict for employees as good employership is for the employer. The reason for this is the fact that the employee is much more dependent on the employer than the employer is on the employee. However, the employee must ensure that he behaves as a good employee. If he does not do so, this may have consequences such as receiving a warning, suspension or even dismissal.

Good employer practices

Rb. Rotterdam September 5th, 2017
That Article 7:611 of the Dutch Civil Code plays an important role in labor law, partly due to its safety net function, is evident from, among other things, the decision of the subdistrict court in Rotterdam of September 5th, 2017.

The employee in this case requested re-employment after a complaint submitted by the employer request for dissolution was rejected.

Although there is no general rule that entitles an employee to re-employment, this can under certain circumstances be successfully claimed on the grounds of good employment practices. In the relevant decision, the subdistrict court judge considered that the question of whether there is a right to re-employment on the basis of good employment practices depends on the circumstances of the case, such as the nature of the employment relationship, the nature of the agreed work and other circumstances.

The subdistrict court judge further considered that an employer must not only have good reasons to be able to suspend an employee, but also to be able to keep him or her on layoff. Since the existence of such reasons had not emerged in the present proceedings, the subdistrict court granted the re-employment claimed on the basis of good employment practices.

Good employee behavior

Good employee behavior plays an important role in, among other things, the question of whether the employee can be required to accept a change to the agreement.

In such a case, good employeeship means that an employee must generally respond positively to reasonable proposals from the employer in connection with changed circumstances at work, and may only reject such a proposal if its acceptance is reasonable. cannot be expected of him.

The changes that employers may be able to make in this way may relate to various aspects of the employment contract, such as:

  • Changing the location of the company, which increases the employee’s travel time (significantly);
  • Shifting working hours, as well as;
  • Implementing a job change or even a demotion.

Whether acceptance cannot reasonably be expected of an employee depends on the circumstances of the case. This means that what can reasonably be expected of one employee may not be expected of another employee.

Do you have a question about Good employer ship and good employee ship?

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At the request of the Rozon association, Kop Lawyers recently gave a presentation to approximately 40 law students, all working at a law firm. Rozon is the umbrella association of legal advice centers in the South-East Netherlands region, which offers legal advice centers the opportunity to broaden the knowledge of their employees.
The presentation concerned the topics of illness and reintegration. Following the presentation given by Maida and Roel, this newsletter will address the (preliminary) question of who actually determines whether an employee is ill. In this context, an example in the form of a recent statement will be discussed.

he presentation concerned the topics of illness and reintegration. Following the presentation given by Maida and Roel, this newsletter will address the (preliminary) question of who actually determines whether an employee is ill.

Reporting illness

An employee must inform his employer if he is unable to work due to illness or disability. An employer cannot refuse a sick report. Sick reporting is done unilaterally. The employer determines how and when this notification must be made.

Sick or not?

If the disease goes beyond the flu, a company doctor will often be called in. It is the company doctor who initially determines whether an employee is unfit for work due to illness.

If the employee or employer does not agree with the company doctor’s assessment, a second opinion can be requested from the UWV. Please note: there are costs involved.

Since July 1st, 2017, the employee is also entitled to a second opinion from another company doctor at the expense of the employer.

If the parties disagree on the question of whether the employee is indeed ill and/or whether he is sufficiently cooperating with the reintegration obligation and the employer ceases to pay wages, the employee must in principle even request an expert opinion (second opinion) before he or she a wage claim procedure can begin. He must then submit this expert opinion during the procedure. If the employee does not comply with this, his claim will be declared inadmissible. The case will then not be dealt with substantively.

However, an expert opinion is not binding; not for the parties and not for the judge. The judge often follows the expert opinion, but can also appoint another expert (third opinion). The final judgment as to whether there is illness is reserved for the judge.

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The Coronavirus is currently in its grip on the Netherlands. New developments are reported all day long and government measures follow each other in rapid succession. These are exciting and difficult times for many companies. For example, it was in the news yesterday that many shops remain empty. Although they are currently allowed to remain open, this appears not to be feasible for many stores. This is only different for supermarkets, DIY stores, garden center, drugstores and pharmacists. They appear to be doing good business at the moment.

Reduction of working hours (until March 17th, 2020)

Given the current situation, many companies have recently been forced to apply for a reduction in working hours. Short-time working is a scheme that companies can rely on when they are faced with a temporary loss of working hours due to a disaster. On March 17th, the Ministry of Social Affairs and Employment reported that a total of more than 54,000 applications had been submitted for a permit to shorten working hours. The ministry also reported that in previous years, on average between 100 and 200 companies submitted such an application.

Now that the outbreak of the coronavirus has led to unprecedented demand for the Short-time Working Scheme in recent weeks and the scheme is not tailored to the far-reaching consequences of the corona outbreak for Dutch companies and organizations, the Short-time Working Scheme was closed on March 17th, 2020. withdrawn with immediate effect. Instead of the short-time working scheme, a new compensation scheme will be introduced, the so-called NOW scheme. In this context, the government has indicated that it wants to provide financial assistance to more employers, as well as to accommodate employees more quickly than was possible under the Short-time Working Scheme.

What happens to applications that have already been submitted and/or approved?

As of March 17th, 2020, 6:45 PM, reduced working hours will no longer be granted. Applications already submitted will be considered as an application for the temporary NOW scheme. Additional information may be requested from the employer. Permits already granted remain in force, but will not be extended. If an employer uses the permit for short-time working and wants to extend it after it has expired, the employer will have to use the temporary NOW scheme.

The temporary NOW scheme

An entrepreneur who expects a loss of turnover of at least 20% from March 1, 2020 can apply to the UWV for a compensation for wage costs for a period of three months. The three-month period can be extended once by another 3 months (further conditions may be imposed on the extension). A condition for making use of the scheme is that no dismissal for employees on economic grounds will be requested during the period for which employers receive the compensation.

An auditor’s report will be required for applications exceeding a yet-to-be-determined amount of compensation.

Under the NOW scheme, employers remain obliged to continue paying 100% of their employees’ wages. However, depending on the loss of turnover, employers can receive a compensation for wage costs of up to 90%. The compensation for wage costs applies to both permanent employees and employees with a flexible contract.

Compensation for wage costs depends on loss of turnover

The foregoing shows that the amount of the compensation depends on the loss of turnover. For example, the amount of the compensation is 90% of an employer’s wage bill if 100% of turnover disappears and the compensation is 22.5% of the employer’s wage bill if 25% of turnover disappears.

Advance of 80% of the requested compensation

The UWV will provide an advance of 80% of the requested compensation, so that companies can continue to pay their staff. It will be determined afterwards what the actual decline in turnover was. When finalizing the compensation, an adjustment may be made if there has been a decrease in the wage bill.

NB! Applications for the temporary NOW scheme cannot yet be submitted (March 19th, 2020). The government is currently indicating that they are working hard to change this as quickly as possible and that the exact date from which applications can be submitted will be announced as soon as possible. In addition, the government has indicated that the period for which an employer can receive compensation does not depend on the date on which the application can be submitted. According to the government, loss of turnover from March 1st, 2020 will be eligible for compensation.

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With the entry into force of the Work and Security Act (WWZ), the problem of “dormant employment” arose. This problem also remains under the Balanced Labor Market Act (WAB), which came into effect on January 1st, 2020.

The dormant employment relationship

In short, a dormant employment contract is an employment contract that continues to exist after 2 years of incapacity for work of the employee, despite the absence of an obligation to continue paying wages for the employer and despite the employer’s authority to terminate the employment contract. Because the employer owes a (transition) compensation in the event of such termination, some employers choose to maintain the employment contract.

Many employers have indicated that they find it unreasonable that they have to pay these types of employees a transition payment. In that case, the employer has usually continued to pay wages for two years and has often also incurred costs in the context of reintegration (see the Wet Verbetering Poortwachter).

Now that an employer is in principle not obliged to terminate the employment contract after two years of illness, he can choose to maintain the employment contract and therefore keep the employment contract “dormant”. In principle, the employer is no longer obliged to continue paying wages after two years of illness and, if the employment contract is not terminated, no transition compensation has to be paid.

However, a long-term ill employee often has an interest in the employment contract ending and the transition payment being paid.

Since the WWZ came into effect, there have been repeated legal proceedings on the question of whether unwillingness to pay the transition payment is sufficient reason to maintain the employment contract.

The first ruling regarding dormant employment was made in December 2015. The subdistrict court judge considered that maintaining the employment contract in order to avoid the transition payment could be regarded as indecent, but that this did not mean that the employer had to terminate the employment contract.

However, rulings from the lower courts subsequently went in all directions. On November 8th, the Supreme Court, in response to preliminary questions, commented on this issue for the first time and provided clarity on how to deal with dormant employment.

Supreme Court judgment November 8, 2019

The procedure before the Supreme Court concerned – in short – the question of how to deal with the problem of weak employment.

The Supreme Court answers this question as follows: If an employment contract can be terminated due to long-term disability, the basic principle is that the employer, on the grounds of good employment practices, is obliged to agree to a proposal from the employee to terminate the employment contract by mutual consent. , with compensation to the employee equal to the statutory transition payment.

The foregoing is a starting point. This means that exceptions are possible. In that case, the employer will have to demonstrate that he has a legitimate interest in maintaining the employment contract. It is clear that simply not wanting to pay the transition compensation is not sufficient for this. (Legal) practice will have to show when an exception is possible.

Do you have a question about The problems of dormant employment?

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