Is this still possible?
As our readers will know, an employer must inform the employee at least one month before the expiration date in writing whether the fixed-term employment contract will be extended, and if so, under what conditions. But what is the legal situation if the employer first announces its intention to extend the employment contract, but then changes its mind? Important detail: the employer withdrew the offer after the employee had announced her pregnancy.
A recent case brought before the Subdistrict Court in Utrecht concerned the following. On June 1, 2021, the employee joined the employer on a one-year contract as business development manager. On December 22, 2021, and on May 4, 2022, the employee was rated satisfactory in assessment interviews but there were also areas for improvement. In the May 4 interview, employer informed employee that employment would be extended beyond May 31, 2022, and that she needed to work on her areas of improvement on the basis of an action plan. Employee then prepared an action plan with a July 2022 deadline.
On May 12, 2022, the employee sent an offer (signed on behalf of the employer) from her employer via DocuSign to extend the employment contract for a period of one year.
Subsequently, the renewal of the employment contract was discussed on May 18, 2022. Employee requested a permanent contract, but the employer did not agree with a permanent contract. It was then agreed that in September 2022 it would be assessed whether the temporary contract would be converted into a permanent contract. The employee argues that after this commitment, she still verbally agreed to a fixed-term extension, effective June 1, 2022.
But employer disputes this: the employee never indicated that she was happy with the offer and that she was going to sign the contract. On the same day, also on May 18, 2022, employer invalidated the fixed-term employment contract on DocuSign with the reason “expired”. After receiving a notification from DocuSign, the employee contacted HR the next day and wrote, “Oh damn Jo! I'm too late!!! Could you send it again?" Also on that day, May 19, 2022, employee told HR in a conversation at the office that she was pregnant. The next day, a Friday, employee worked from home.
The following Monday, employee was told at work that the offer to extend the employment contract had been withdrawn, that the employment contract would end on May 31, 2022, and that she was suspended until then.
The employee did not agree and went to court. She primarily claimed performance of the fixed-term employment contract as of June 1, 2022, payment of her salary, statutory increase and statutory interest. In the alternative, she claimed a declaratory judgment that her employer had acted unlawfully by not extending the employment contract beyond June 1, 2022, in violation of equal treatment of men and women, and claimed damages.
Decision of the Subdistrict Court
Offer and acceptance
The Subdistrict Court first assesses whether or not the employment contract continued after May 31, 2022. This is where the doctrine of offer and acceptance comes into play. After all, this is how an employment contract is established, and this can be done orally or in writing. The Subdistrict Court ruled that it cannot be established that an acceptance of the offer had already taken place during the conversation on May 18.
Employer invalidated the offer at the end of the day on Wednesday, May 18 (and thus before employer knew that employee was pregnant). However, the Subdistrict Court found that employer did not inform employee that the offer had been rescinded until May 23, 2022, and that employee was also not suspended until then. If employer had already decided to definitively withdraw the offer on May 18, 2022, it would have been reasonable for employee to have been informed of this in the interview on May 19, 2022. Employer did not do so. By doing so only after employer knew about the pregnancy, there is a presumption that employer withdrew the offer to renew the employment contract because of her pregnancy. But even if this were not the case, employer acted in violation of good employment practice.
Good employment practice
After all, employer did not warn employee in the conversation on May 18, 2022, that it would withdraw the offer if she did not sign that day. According to the Subdistrict Court, the employee did not need to be aware of this either. After all, the negotiations were about extension for a definite or indefinite period of time, and on May 18 the parties had found a middle ground in that respect. Indeed, it had been agreed that if the targets in the action plan were met, an extension for an indefinite period would be decided on as early as September 2022.
In the opinion of the Subdistrict Court, the employee's conduct sufficiently shows that she accepted the offer, if not in, at least after the May 18 conversation. Thus, on May 19, 2022, she asked HR for a new link (for inspection and acceptance) of the offer in DocuSign. Moreover, that same day, employee agreed with colleagues to announce her pregnancy on Monday, May 23, 2022, during a team meeting. The parties did not discuss announcement of departure at that time. Apparently, therefore, they did not assume this at the time. It is further established that on Friday, May 20, 2022, employee registered for a conference on July 1, 2022 and that she put the evaluation moments from the action plan until September 2022 in her business calendar and in the agenda of a colleague.
Thus, employer should have realized that its announcement on May 23, 2022, that the offer had been withdrawn and that employee could leave immediately, would take employee completely by surprise. Employee could not have inferred this from DocuSign's automatically generated notification on May 18, 2022 that the document had been declared invalid because it had expired. Employer, on and after May 18, 2022, left employee under the impression that the renewal was a fact.
Under these circumstances, employer did not have the freedom to withdraw the offer. As the employee accepted the offer, a one-year extension of the employment contract was established effective June 1, 2022.
The Subdistrict Court therefore granted the claim for continued payment of salary from June 1, 2022. However, the statutory increase on the late payment of wages was mitigated to 25%, as the employee initially appears to have accepted the end of her employment contract and only in a letter from her authorized representative dated August 16, 2022 did she invoke performance of the employment contract.
You can read the full judgment here.
It is therefore clear from this ruling that an employer may not simply withdraw an offer made for an extension if negotiations are still ongoing. Do you also have employment law questions? The experienced team of SPEE advocaten & mediation will be happy to help you.