A REQUEST TO TERMINATE AN EMPLOYMENT CONTRACT BASED ON THE NEW CUMULATIVE GROUND FOR DISMISSAL HAS BEEN GRANTED FOR THE FIRST TIME: THE BEGINNING OF CUMULATING DISMISSAL GROUNDS
The Dutch Government has recently introduced a new ground for dismissal, in addition to the already existing 8 exhaustive grounds for dismissal. As from 1 January 2020, the judge may terminate an employment contract on the basis of this cumulative ground if there are two or more grounds for dismissal applicable, which on their own individual merit do not constitute a reasonable ground for a termination. The idea behind this new cumulative ground is that a continuation of the employment contract can (at least in some cases) not reasonably be required from the employer in the given circumstances. Until now, the application of the cumulative dismissal ground has always proven unsuccessful for employers due to the lack of an explicit legal foundation or due to the fact that it was considered that at least one of the grounds in itself should (almost) be sufficient for a termination, which was not the case.
Judgement of the Court
On the 6th of July 2020 the Court granted a request for termination on the basis of the cumulative dismissal ground. The employer requested a termination of the employment contract primarily based on (i) a lack of performance of the employee (the fourth ground) or (ii) an impaired employment relationship (the seventh ground). Alternatively, the employer requested a termination of employment based on the cumulative dismissal ground.
The request to terminate the employment contract based on the fourth dismissal ground (a lack of performance) was rejected because it was insufficiently substantiated. The Court ruled as follows: “While the Court agrees with the position of the employer, that a performance improvement process in respect of an employer with such a senior position within the organization is subject to less stringent conditions, the Court is of the opinion that the employer has provided the employee with insufficient specific opportunities for improvement, thereby granting hum too short a period for improvement.”
The request to terminate the employment contract based on the seventh dismissal ground (an impaired relationship) was also was rejected because it was insufficiently substantiated: “The employment relationship between parties has been impaired. However, this is not a sufficient ground for termination, because the main reason for the impaired relationship is the disagreement about the employee’s lack of performance.”
The Court then ruled that a termination on the basis of the cumulative ground is only possible insofar as one of the presented dismissal grounds is almost sufficiently substantiated to warrant a termination of employment and that this is indeed the case here: “Employer and employee have invested time in restoring confidence through mediation. Given the senior level at which the employee and manager had to work together, it is understandable that a restoration of confidence was necessary to actually facilitate a decent performance improvement process.” In the opinion of the Court, the combination of the employee's lack of performance and the impaired employment relationship leads to the request for termination of employment based on the cumulative dismissal ground being granted. In view of this, the Court awards an additional severance compensation to the employee amounting to 50% of statutory transition compensation, which is the maximum compensation that can be awarded in the event of a termination based on the cumulative dismissal ground.
The ruling provides insight into the new cumulative ground for dismissal in practice and confirms the required existence of at least one almost fully substantiated dismissal ground. Although it is not yet clear whether the ruling will be upheld in future case law, the judgement of the Court is the starting point for more terminations of employment contracts granted on the basis of the cumulative dismissal ground.
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Sam E.J.M. van Well
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