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5 Dec 2023 Summary dismissal: the requirement of 'immediacy' in case of an urgent cause consisting of various grounds

Summary dismissal is a drastic remedy, for which the law imposes three requirements: (1) there must be an urgent cause, (2) the summary dismissal must be given immediately, and (3) the employer must also communicate the urgent cause immediately to the employee. 'Immediately' means that the employer must act expeditiously: he must take action immediately after the conduct giving rise to the summary dismissal. But what about this 'immediacy' if the urgent cause for the summary dismissal consists of several grounds? The Dutch Supreme Court ruled on this topic this month. Read more here:

What were the facts of the case?

The case concerns the Strategic Operations Director (member of the Dutch management team) of Econocom Nederland BV, part of a global group. This employee has been employed since 1 October 2003. In early January 2020, he reports sick with burnout. During his sick leave, his work is observed, employer then observes irregularities. The employer engages an investigation agency for further investigation.

In February and March 2020, this investigation is carried out and the investigation agency verbally reports the preliminary findings to Econocom. On 19 March 2020, Econocom invites the employee for a meeting the next day. The employee requests to postpone this meeting but Econocom rejects this. On 20 March 2020, Econocom sends the employee a letter informing him that the employment contract will be terminated with immediate effect, on the condition that the employee does not provide a satisfactory explanation by 25 March 2020 at 18:00h for the disturbing facts that had come to light, which could remove the urgent cause for summary dismissal.

The urgent cause for summary dismissal cited by Econocom consists of 11 grounds. These range from receiving kick-backs from a friend's consultancy company, which charged very large consultancy fees to Econocom, to purchasing goods/services for private use in Econocom's name.

Employee does not respond to the letter and Econocom informs him by email on 26 March 2020 that the conditional termination is now unconditional. The investigation report appears on 30 April 2020.

How do the court and court of appeal rule?

The employee seeks annulment of the summary dismissal and requests to be admitted at work. He also seeks continued payment of his salary from 20 March 2020. In the alternative, he seeks fixed compensation for termination of employment without complying with the applicable rules, plus statutory transition payment and fair compensation.

The employer applied for fixed compensation, or for the conditional termination of the employment contract (on the grounds of culpable acts and omissions or a disrupted working relationship), should the summary dismissal fail in court.

The subdistrict court ruled that the summary dismissal was valid and rejected the employee's requests. The employee appeals. The court of appeal then rules that many of the grounds for dismissal put forward by Econocom do indeed constitute an urgent cause for summary dismissal. However, according to the court of appeal, the requirement of ‘immediacy’ is not met. After all, some of the grounds for dismissal were already clear around 8/9 March 2020. In other words: by then, the employer should have already proceeded to give summary dismissal.

The court did not reinstate the employment, set aside the order of the subdistrict court, granted the employee's request for payment of fixed compensation and rejected Econocom's requests.

How does the Supreme Court rule?

The Supreme Court ruled that if there is a urgent cause consisting of various grounds, that in assessing whether the dismissal was given immediately, the decisive factor is whether sufficient diligence was acted in respect of that combination. The court classified a number of grounds for dismissal together as an urgent cause for the summary dismissal, but did not give cognisable consideration to two other grounds for dismissal when assessing whether the dismissal was given immediately.

Econocom argued that it only became aware of those two other grounds of dismissal on 11 and 18/19 March respectively. According to the Supreme Court, the court either failed to recognise that the enquiry as to whether the employer had acted with sufficient diligence had to relate to the entire combination of grounds for dismissal that it found to be urgent, or failed to give sufficient reasons for its finding that this was not the case.

The Supreme Court therefore set aside the decision of the court of appeal and referred the case to another court.

Read the ruling here.

Conclusion

Instant dismissal is a drastic remedy. Are you an employer and does a situation arise in which you would like to proceed with summary dismissal? If so, contact SPEE advocaten & mediation immediately so that you do not run into problems with the requirement of 'immediacy'. Especially if there are multiple grounds for dismissal. Furthermore, if you are faced with summary dismissal as an employee, we recommend to take prompt action as well.

SPEE advocaten & mediation Maastricht