Notice fee always due if written requirement is not met

Temporary employment contracts of 6 months or longer are subject to the written notice requirement. This means that the employer must inform the employee in writing no later than one month before the end date whether or not the contract will be continued, and if so, under what conditions. Employees who do not receive (timely) notice can claim notice compensation. The Supreme Court recently made it clear that the written requirement cannot be avoided.

What were the facts?

Employee worked for a concrete supplier in the position of general employee since 1 May 2019. End date of the employment contract was 1 December 2019. On 30 October 2019, the employer's director informed the employee in an office meeting that the employment contract would not be renewed from 1 December 2019. However, no written notice was forthcoming. Incidentally, the employee did have another job as of 1 December 2019.

Nevertheless, the employee went to court and claimed compensation for failure to give written notice. That notice compensation amounts to one month's salary, according to Section 7:668(3) of the Civil Code.

How did the subdistrict court and the court of appeal rule?

The subdistrict court rejected the employee's request: by the standards of reasonableness and fairness, it was unacceptable that a notice fee had to be paid. After all: it is established that the employer did verbally inform the employee that the employment contract would not be renewed as of 1 December 2019. Employee was not in uncertainty: he started applying for a job and had a new job as of 1 December 2019. In short: there was no disadvantage to the employee.

The matter is then submitted to the court of appeal. It reached an entirely different opinion: under the circumstances, the onerous requirement of a legal consequence unacceptable by the standards of reasonableness and fairness was not met.

The court of appeal took into account that the legal consequence follows from a provision of mandatory law, which cannot be deviated from to the detriment of the employee in the employment contract. The court of appeal also pointed to the fact that the legislator had already taken the interests in question into consideration: according to the legislator, good employment practice implies that the notice must be given in writing. If this does not happen, the employer owes the notice fee.

Judgment of the Supreme Court

The Supreme Court followed the opinion of the court of appeal: the court must exercise restraint when assessing whether the application of a statutory rule in a particular case is unacceptable according to the standards of reasonableness and fairness (Section 6:2 (2) of the Dutch Civil Code or Section 6:248 (2) of the Dutch Civil Code). This applies all the more if it concerns a rule of mandatory law. If the statutory rule already contains a balancing of interests by the legislator, the so-called 'restrictive effect of reasonableness and fairness' can only be invoked in exceptional cases.

In this particular case, it concerns a mandatory rule of law, the aim of which is to strengthen the position of the employee with a fixed-term employment contract. The written notice provides the employee with timely clarity on whether or not the employment contract will continue. The legislator deliberately chose that the employer who does not comply with the obligation to give notice must pay a notice fee. According to the Supreme Court, the notice fee is an "incentive to comply" with the written requirement. This is consistent with the fact that the notice compensation is always due in case of non-compliance with this requirement, even if the employee already knew by other means that the employment contract would not be continued or the employee did not suffer any disadvantage.

Interested in the full judgement? Read more

Final Remarks

Are you an employer and do you have several employees with fixed-term contracts? Then we advise you to have a clear system in which you record when these contracts expire and notify you when a written notice is due. After all, a mistake is easy to make and - with a notice fee of up to one month's salary - it can be quite costly. Or are you an employee and do you think you are entitled to severance pay? You can contact the employment lawyers at SPEE lawyers & mediation.