Newsflash! Employers must end dormant employment

Last Friday, 8 November 2019, the Dutch Supreme Court has issued a ruling on dormant employment relationships. The Supreme Court has indicated that, because of the ‘good employer’ principle, an employer must cooperate with an employee’s proposal to bring his employment contract to an end by amicable arrangement, with the employee being awarded a payment equivalent to the transition payment.

Amount of the payment

The Supreme Court held that there was no need, when determining the amount of this payment, to link up with the compensation scheme for dismissal due to long-term employment capacity (Compensatieregeling bij ontslag wegens langdurige arbeidsongeschiktheid). However, the payment need not be any more than the transition payment that would have been due on termination of the employment contract on the day after the date when the employer could have terminated the employment contract because of the employee’s employment incapacity.

Exception to the employer’s obligation to cooperate

The employer is not obliged to cooperate with the employee’s request if the employer has a justified interest in keeping the employment contract in force. One possible situation for this would be realistic prospects of reintegration for the employee.

Waiting until state pension age – permissible?

Employees who have reached the state pension age are not entitled to a transition payment. In practice, employers use this in discussions about dormant employment relationships by spinning things out. The Supreme Court has deftly put a stop to this by stating explicitly that the fact that the employee has almost reached pension age when he makes his proposal for termination of the contract will not amount to a justified interest for the employer for keeping the employment contract in force.

The full judgment can be found here (in Dutch).

Eric van Dam (evd@clintlegal.com / +31 20 820 0330)