The scope of the reinstatement requirement (“herplaatsingsvereiste”) in international context following the ‘Expat/Shell’ decision of the Supreme Court

The scope of the reinstatement requirement (“herplaatsingsvereiste”) in international context following the ‘Expat/Shell’ decision of the Supreme Court

With the introduction of the Work and Security Act (WWZ), the reinstatement requirement (also known as reinstatement obligation or redeployment obligation), became codified law in the Netherlands. The requirement states – in brief – that the employer must investigate prior to a dismissal whether reinstatement in another suitable position within the company is possible. This formal codification in law has caused confusion as both legislation and parliamentary history is unclear on several points.

The Supreme Court provided some clarity in its Expat/Shell decision of 18 January 2019. In our article which was published in the May 2019 edition of the professional journal ‘ArbeidsRecht’. We have indicated the significance of this decision for the employment law practice in the Netherlands. We have raised the issue (i) whether the reinstatement requirement is still subject to the principle of reasonableness and fairness, (ii) what the scope of the reinstatement requirement in international group context is, (iii) which category of jobs should be considered with regard to the reinstatement requirement and (iv) what the expected efforts of the employer with regard to reinstatement requirement in an international group context are.

Please find a summary of our findings in the below.

Ad (i) The standard of reasonableness

In the Expat/Shell decision the Supreme Court has ruled that the principle of reasonableness and fairness still plays a role in the question as to whether reinstatement can be required. This is good news for employers which form part of an international group of companies. If this were different, this could lead to the problematic situation whereby group companies abroad were in any case to be confronted with the - from their point of view 'negative' and unknown - consequences of Dutch employment law. In that case, they could have the obligation to employ an employee that was eligible for dismissal in the Netherlands, possibly against their will.

Ad (ii) The scope in international group context

The reinstatement requirement applies to the entire international group, at least insofar as (i) the employer is part of a group within the meaning of Section 2:24b of the Dutch Civil Code (a group which acts as an economic unit with central management) and (ii) it has not been established that an employee is not prepared to work abroad. If the aforementioned criteria are met, the suitable positions in other companies within the (international) group must be taken into account.

Ad (iii) Which category of jobs should be considered as suitable positions

In assessing whether there is a suitable position within the group, the employer must take into account both positions for which there is a vacancy or which will occur within a short period of time, as well as positions currently fulfilled by flexible workers. However, case law appears to suggest that the latter (positions fulfilled by flexible workers) are not taken into account with regard to international reinstatement within the group. The Supreme Court has not ruled on this yet, but one argument in favor of this would be that what is known as the temporary workforce in the Netherlands cannot be applied directly to positions abroad.

Ad (iv) Expected efforts in international group context

The employer cannot be considered to have met the reinstatement requirement, if it has merely referred to a vacancy page of the global group. The employer has a so-called best-efforts obligation: it is expected to actively guide the employee, to take the initiative and to remove any obstacles to new-vacant positions. In practice, the precise level of required efforts depends on the employer's executive power over the group company within which a suitable position is available. The inherent difficulties with regard to reinstatement in an international group context are taken into consideration by the courts. In any case, it is clear that the group employer must explain in detail why reinstatement elsewhere in the (international) group 'is not possible or not logical', in the event that no reinstatement has taken place.  

For more information regarding this subject, please contact Suzanne Gerritse or Sam E.J.M. van Well. 

Further information as PDF