Our first employment law blog of this new year, deals with a decision of the Limburg District Court at the end of October 2022, in which the Subdistrict Court had to rule on a request for dissolution by the employee, who requested the Subdistrict Court to dissolve her so-called dormant employment contract, while awarding (among other things) a transitional allowance and fair compensation. Did the Cantonal Court go along with this?

What are the facts?

The employee had been ill for a long time and, since the obligation to continue paying wages and the reintegration obligations had ended, there was a so-called dormant employment contract.

The employee took the position that the employer owed her the statutory transitional compensation of €27,090.86. She substantiated this position by arguing that, on grounds of good employment practice, the employer is obliged to agree to an employee's termination proposal, including in any event the granting of the statutory transitional compensation. In this regard, the employee relies on the well-known Xella judgment of the Supreme Court (ECLI:NL:HR:2019:1734), which is also discussed more often by us.

Moreover, the employee takes the position that she should be awarded fair compensation because of the state of affairs at the time of her active employment.

In that context, she takes the position that she was improperly transferred to another branch and that this is imputable to the employer. In that context, she argues, among other things, that she had a difficult time in the new branch, that she had long travel times, that she had health problems and that she is a single parent caring for a daughter.

Employer does not oppose the requested termination.

What does the Subdistrict Court rule?

Despite the fact that the employer did not oppose the rescission of her employment contract requested by the employee, the Subdistrict Court ruled that it could not simply pronounce rescission of the employment contract, due to the fact that a transitional allowance can only be awarded in a rescission procedure if the employer was seriously at fault. Incidentally, this is also what the employee based her request for dissolution on.

Since the Subdistrict Court was of the opinion that, based on the facts and circumstances, it could not be ruled that the employer's conduct was (seriously) culpable, it did intend to grant the request for dissolution, but it also intended to reject the request for transition allowance and equitable remuneration.

Since Section 7:686a (6) and (7) of Book 7 of the Dutch Civil Code provides that the applicant must be given the opportunity to withdraw the request if the Subdistrict Court intends to pronounce dissolution without attaching the compensation requested by the applicant, the employee was given the opportunity to withdraw her request if, in addition to dissolution of the employment contract, she also requested compensation to be attached to it. For that reason, the Subdistrict Court dissolved the employment contract between the parties, on the understanding that such dissolution would take effect as soon as the employee did not indicate, within 14 days of the ruling, that she wished to withdraw the request. The employee was also ordered to pay the costs of the proceedings.

Dormant employment contracts, how does that work again?

In the so-called Xella judgment of 8 November 2019, the Supreme Court ruled that, on 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, while granting compensation in the amount of the statutory transitional compensation.

In the present ruling, the employee probably thought she could rely on this arrangement. However, the Subdistrict Court ruled, that in dissolution proceedings, other requirements are imposed on the award of a transitional allowance, especially if the basis of the request is based on seriously culpable actions on the part of the employer.

Read the ruling here.

Conclusion

When it comes to the subject of dormant employment contracts and the right to compensation equal to the statutory transitional compensation, it is important to be aware of the laws and regulations. In this ruling, the employee in question "caught a bone". Do you want to prevent that from happening to you too, or do you, as an employer, want to know what your rights and obligations are in this context? The employment lawyers at SPEE lawyers & mediation will be happy to assist you!