An employee with an allegedly dormant employment contract appealed to her employer in January 2017 to terminate the employment with granting of a transitional compensation, referring to the UWV's future compensation scheme for employers. Employer refused cooperation. Upon reaching retirement age in July 2019, the employment contract still ended, without a transitional compensation payment. Employee then claimed damages from employer for not fulfilling the role of good employer The matter was litigated up to the Supreme Court What eventually came out of this?
Both at first instance and on appeal, it was held that the employer was liable for damages due to the employee's failure to actively reconsider an earlier request to terminate dormant employment, following the introduction of the compensation scheme, despite the fact that the employee did not repeat the request after its introduction.
Both at first instance and on appeal, it is considered that given clarity on the compensation option from 20 July 2018, the employer should have taken the initiative to terminate the employment.
Failure to do so violates the standard of being a reasonable and fair employer as set out in Section 7:611 of the Civil Code.
In cassation before the Supreme Court, the Advocate General concluded that the employer was indeed liable for the damage suffered by the employee as a result of missing out on the transitional compensation (read the Advocate General's full opinion here). This compensation was set equal to the amount of the transitional compensation the employee would have received if the employment had been terminated in accordance with the Xella standard.
Indeed, in the so-called Xella ruling of 8 November 2019, the Supreme Court ruled that, on the grounds of good employment practice, employers must in principle agree to a proposal to terminate the employment contract by mutual consent of employees whose waiting period during sickness (104-weeks) has expired, subject to the award of compensation in the amount of the statutory transitional compensation.
We previously wrote an article on this matter on our website.
In conclusion, therefore, if an employee, before the compensation scheme came into force, made a request to terminate a dormant employment contract under the award of the transitional compensation, but did not repeat this request after the compensation scheme came into force, an employer is liable for damages on the grounds of violation of the principles of good employment practice.
It is therefore prudent for employer, to check, whether there are such dormant employments within its company.
Do you have questions about dormant employment contracts, Xella compensation and/or the right to compensation/allowance from the UWV? The employment lawyers at SPEE advocaten & mediation will be happy to help you.