Termination of employment contract without financial compensation

A commercial director was having an affair (during working hours) with the wife of an account manager at the same employer. The employer did not tolerate this and went to the subdistrict court. That did not exactly end well for the employee!

What were the facts?

The case involved a commercial director working for a supplier of professional automotive and industrial paints since 1 November 1985. The director is responsible for sales and manages 15-20 sales and technical staff. He earns €11,750 gross per month excluding holiday allowance and bonus. Furthermore, the employment contract contains a relation and non-competition clause. A Code of Ethics applies within the employer's company.

On 1 April 2021, X joined the same employer as an account manager. The account manager was married to a lady who works as a receptionist at a client of the employer. She announced to her husband on 13 February 2022 that she wanted a divorce. A day later, the account manager reports sick to his employer.

A few days later, the account manager finds a large amount of WhatsApp messages on the laptop owned by himself and his wife, including (nude) photos and videos of a sexual nature. He finds out that his wife was having a sexual relationship with the commercial director. The account manager hands over the messages between his wife and the commercial director to his employer.

Employer finds that the sexual messages were sent over the business phone. It becomes clear that the commercial director had sex appointments of several hours with the account manager's wife on Friday afternoons (and thus during working hours), in a cottage or hotel. This affair lasted from early July 2021 to late January, early February 2022.

The account manager subsequently complained to his employer about the commercial director. In this complaint, the account manager states that the commercial director allegedly threatened not to renew his contract if the (sick) account manager did not return to work.

The account manager's complaint leads to talks between the employer and the commercial director. The commercial director is suspended and a further investigation is carried out. Eventually, the parties enter into discussions about an amicable termination of the employment contract and another form of cooperation, but to no avail. At this, the employer goes to the subdistrict court.

What is the employer's position?

The employer requested that the employment contract be terminated on the basis of the e-ground (serious culpability of the employee). According to the employer, the commercial director acted seriously culpable by:

• frequently using WhatsApp and his phone during working hours for private purposes;
• taking and sending sexually oriented photos and videos during working hours, in the workplace and with customers;
• agreeing to have sex during working hours;
• cause a negative working atmosphere in the workplace by his actions;
• seriously abusing his position as director;
• acted in violation of the applicable rules of conduct as laid down in the Code of Ethics.

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The employer also stated that the working relationship had been seriously and permanently disturbed (g-ground) by the commercial director's conduct. Employer also claims back pay for the time the director spent sending and receiving private messages frequently during working hours.

What is the commercial director's defence?

The commercial director has an extensive defence. To begin with, he raises an incident with the aim of obtaining documents from his employer, including the account manager's complaint and documents about the account manager's performance.

Furthermore, the commercial director raises a defence to the termination of his employment contract. In case his employment contract will nevertheless be terminated, the commercial director claims, among other things, a transitional allowance, equitable compensation of no less than €2.5 million, annulment and/or mitigation of his relation and competition clause and compensation in that regard, damages of €10,000 gross, a declaratory judgment that the sexual WhatsApp messages are unlawfully obtained evidence and an order to remove all WhatsApp messages and a claim for his bonus.

The commercial director believes he did not act in a seriously culpable manner. Nor would the employment contract have been disrupted. Moreover, the employer would not have done enough to restore the allegedly disrupted working relationship and there would still be redeployment opportunities. According to the director, his employer acted seriously culpable after receiving the account manager's complaint and for this reason, he claims the huge equitable compensation. The director indicated that the sexual apps with his mistress had not affected his work performance; in addition, the director felt that the apps should never have been used because of his privacy.

What was the judgment of the subdistrict court?

The subdistrict court largely found in favour of the employer. To begin with, the director's incidental requests (to obtain documents) were rejected. The judge also ruled that there was no illegally obtained evidence in the form of WhatsApp messages. These messages are therefore simply taken into account in assessing the case.

The judge agreed with employer that the director frequently used his business phone for private purposes during working hours. For instance, in September/October 2021, he sent 726 (!) messages to his mistress in nine days and received 535 messages from her, some of which were sent during regular working hours. Moreover, the subdistrict court found that the director also sent and received messages during appointments with clients. All these private actions are insufficiently compensated with work matters at other times. Furthermore, it was established that there were indeed sex appointments during working hours and the judge ruled that the director had abused his managerial position and violated the Code of Ethics.

All this constitutes culpable conduct on the part of the director, and the employment contract is therefore terminated on these grounds. An appeal by the managing director to the "loose" corporate culture is of no avail and the argument that it was a private matter does not hold water either.

Because the commercial director's actions are not only culpable but even seriously culpable, the director is not entitled to a transitional allowance. The application for an award of fair compensation fails, as there is no serious culpable conduct on the part of the employer.

The employer's recovery of part of the salary (in connection with all private matters during working hours) is awarded up to a gross amount of €1,000.

The relation and competition clause is partially annulled, in the sense that it is reduced from two years to one year after the end of employment. In addition, the court limits the substantive scope of the clause.

Employee's claim for damages for violation of his privacy is dismissed by the court: employer complied with the principles of proportionality and subsidiarity. Also, the bonus is not awarded because it was not yet due.

You can read the entire judgment here.

Final Remarks

You will not be surprised that the director's affair in this case led to his dismissal. However, relationships in the workplace are often thorny in other situations too. A good Code of Conduct can help then. Do you also have questions on this topic? Or about other employment law topics? SPEE advocaten & mediation's team of employment lawyers will give you honest advice.