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7 Jul 2021 Corona and employment law cases: what is allowed and what is not allowed

After almost 1.5 years of the corona (crisis), judges in the Netherlands have now regularly ruled on interventions in the employment contract as a result of the corona crisis. This includes issues such as the right to continued payment of wages, holidays and leave, the right to work from home, unilateral changes to employment conditions, the employer's obligation to replace employees and dismissal. The common thread in these judgments is that the presence of the coronas crisis is often no reason for judges to apply labour law less strictly.

Non-sick employee is entitled to continued payment of wages in full in case of corona crisis

In practice, a discussion has arisen about whose risk it is for an employee not to work due to corona quarantine and whether or not the employee is entitled to continued payment of wages in full in such cases. The Limburg District Court is clear on this: this is at the employer's risk, so the employee is entitled to salary. If an employee - who is free of symptoms - has been in contact with a person who is possibly infected with the coronavirus or has a sick housemate and has to go into corona-quarantine and cannot work at home because this is impossible for his/her profession, then this is a circumstance that is not at the employee's risk, according to the court. In that case, the employer is obliged by virtue of Section 7:628 of the Dutch Civil Code to continue paying wages in full (unless the parties have validly excluded this for the first six months of the employment contract). Because there is no question of illness in this situation, the employer is not allowed to withhold waiting days from the salary or to continue paying less than 100% of the salary. A ruling by the subdistrict court in Alkmaar is along the same lines: the failure to work on RIVM advice due to a chronically ill wife and a son with corona complaints (and later also the employee himself) is not at the expense of the employee (and does not provide an urgent reason for instant dismissal), as the employee in question was not absent without permission. The employee (workplace manager) stayed at home on RIVM advice in connection with the care of his chronically ill wife and sick child, while the employer did not investigate whether (modified) work at home was possible. In that case, the employee is entitled to continued payment of salary in full, according to the court. According to the employer, the employee should have taken care leave to look after his wife and child, but this appeal was not upheld by the court.

The website of the central government also explicitly states that the employer must continue to pay wages in the event of a coronary illness.

However, it is very questionable whether this position applies to all corona quarantines. There are situations conceivable in which the home quarantine should not be at the expense of the employer. For example, it is conceivable that if an employee knowingly goes on a non-emergency trip to an area with negative (orange) travel advice, this should not be in the sphere of risk of the employer and the employee is therefore not entitled to continued payment of wages. Moreover, one may wonder whether non-work due to corona-quarantine is a (regular) business risk.

Non-work due to corona crisis is for the account of the employer

In practice, the question of whose risk it is to be unable to work because of the corona crisis - without the employee being in quarantine - also gave rise to discussion. The District Courts of Limburg and Den Bosch gave their opinions on this matter and ruled unanimously: the inability to work due to the coronary crisis is first and foremost an employer's risk, so that the employee is entitled to full pay pursuant to Section 7:628 of the BW (unless the parties have validly excluded this for the first six months of the employment contract). Both judges were firm on this point and ruled that (the financial circumstances or the non-working in connection with a temporary closure due to) the corona crisis is for the risk of the employer and that the employee is therefore entitled to full salary payment.

Corona crisis does not entitle employees to work at home

Until recently, the government advised employees in connection with the coronavirus to work at home as much as possible. However, Dutch law does not give employees an absolute right to work at home. The question before the District Court of Gelderland was whether the government advice to work at home as much as possible (does) lead to a right for employees to work at home.

The judge was clear: no. The mere fact that the government asks employees to work at home as much as possible does not create a right for employees to work at home. The court considered that it was not plausible that the employer (a wholesaler in kitchens) had breached the obligations arising from good employment practice, its authority to instruct and/or its duty of care, as it had taken several appropriate measures to ensure a safe workplace and had explained that, in view of the nature of the work, it was necessary for all employees to be present at the workplace. According to the employer, the employees are needed at the workplace because packages must be accepted and orders must be processed and shipped, where short lines of communication are important. In addition, the employee supervised a colleague, which supervision could not be transferred to other colleagues at that time. The employee's demand to work from home at least until 1 September 2020 - in accordance with government advice - was therefore rejected.

Corona crisis in itself does not justify unilateral change of employment conditions

Several employers saw the corona crisis as a reason to unilaterally change the terms of employment of their staff, such as a salary adjustment or an obligatory inclusion of holiday hours. These were drastic changes with a single reference to the corona crisis, without substantiating the necessity with financial documents (and without taking into account the impact on and the personal situation of the employees concerned). The bar for unilaterally changing employment conditions is high. Typical of this high bar is that each of the employers in the following cases was found to be in the wrong. It concerns the following cases:

  1. 25% reduction in salary; The District Court of Amsterdam ruled that an employer (in this case IT) was not allowed - and was even seriously culpable - to unilaterally implement a 25% reduction in salary due to corona, without substantiating the need for this with financial documents. This concerned a dismissal procedure and the employee was awarded fair compensation of EUR 20,000 gross (in this case equivalent to two months of lost salary) in connection with the employer's seriously culpable actions.
  2. 50% reduction in salary; The District Court of Amsterdam has previously ruled that unilaterally reducing salary by 50% without further consultation is not acceptable due to corona. The case concerned an employee of a sandwich shop in Amsterdam that worked with tourists. In this case, the reduction in salary implied too great a loss of income, while the employee was dependent on his salary for his livelihood. According to the judge, the employee could not be expected to agree to such a reduction in salary according to the criteria of reasonableness and fairness.
  3. 30% pay reduction; The judge in Maastricht ruled that an employer is not allowed to unilaterally reduce the salary of a sick employee from 100% to 70% (30% reduction) by invoking the corona crisis. In this case, the employee had a legitimate expectation that his salary would be paid in full (since the employer had been doing so for 16 months). The presence of the corona crisis could not lead to a different opinion, according to the judge.
  4. Compulsory inclusion of 20% holiday hours; The Rotterdam District Court rejected a measure unilaterally imposed by the employer and held that the coronary crisis did not justify the compulsory inclusion of 20% holiday hours. This case concerned an administrative and facilities company that had obliged all its staff to take 20% of their holiday hours, with a single reference to the coronary crisis. The court found against the employer and ruled that a mere reference to the coronary crisis is insufficient to impose such a unilateral measure. The starting point is and remains that employers may not force employees to take their holiday hours.
  5. Conversion into a zero-hours contract; A restaurant owner in Curaçao also fails to win the case: the Court of First Instance of Curaçao ruled that the employer was not allowed to convert the employment contract into a zero-hours contract (which in fact means a covert dismissal) and to withhold wages completely, with a mere reference to the corona crisis, without any further substantiation with documents.

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The above judgments confirm that the bar for unilaterally changing employment conditions due to corona is high. However, some judges do see some room for unilateral changes as a result of corona. For instance, in the sandwich case under (b) above, the District Court of Amsterdam ruled that it is sufficiently plausible that the employer, due to the extraordinary circumstances in which it now finds itself (corona), has an unforeseen, business emergency and therefore has a substantial interest that, in principle, may require the employees - in consultation - to suspend or even relinquish certain employment rights. However, unilaterally and without consultation proceeding to 50% salary reduction was not considered acceptable.

It is therefore advisable to first talk to the employees and reach a solution together. If the employer - in the absence of consent from the employee - wishes to unilaterally change an employment condition on account of corona, this must be done carefully and only after consultation and the employer must have a strong interest for this, provided with sound substantiation. This is a balancing of interests: the impact on the employee must be taken into account at all times. Merely referring to the corona crisis - without adequate (financial) substantiation - is in any case insufficient. A drastic measure, such as a reduction in salary or the compulsory inclusion of holiday hours, is less likely to succeed than a less drastic measure, such as the temporary surrender of certain fringe benefits.

Not going on holiday is within the employee's sphere of risk

Once a holiday is given, it stays given, according to the Rotterdam District Court. The court considered that not being able to go on holiday due to corona does not mean that the employee gets his holiday hours back. The fact that the employee did not actually leave or is leaving is at his own risk. A possible suspension does not change this. This seems justified, as the recuperation function of holidays does not seem to be at issue here: the point is that the employee has free time - free from work - and not that the employee actually travels somewhere.

Hiring freeze due to corona crisis does not affect employer's obligation to redeploy

In a dismissal procedure before the Rotterdam subdistrict court - which, incidentally, was not initiated because of corona, but because of malfunctioning and a disrupted working relationship - the court emphasised that a hiring freeze in connection with the corona crisis does not affect the employer's redeployment obligation. This re-employment obligation, which has been laid down by law since July 2015, means that the employer must actively investigate whether the employee can be re-employed in another suitable position within (the group of) the employer before the employer can terminate the employment contract. This also applies during the corona crisis. In this case, the court ruled that it had not been sufficiently demonstrated that the employer had carried out any concrete activities with regard to reinstating the employee, so that (partly for this reason) the dismissal was rejected.

Summary

The lower court judgments show, that judges are critical and continue to apply labour law in full even during corona. Do you have questions about any of these topics of employment law, or do you have any other questions? Then please feel free to contact one of the expert lawyers SPEE advocaten & mediation.

SPEE advocaten & mediation Maastricht

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