New contract after dismissal during probationary period allowed?

A probationary period sometimes isn’t long enough to gain a good impression of an employee and the employer might still want to give the employee a further chance. There has recently been a ruling from the District Court of Midden-Nederland (click here, Dutch only) in a case where the employer had contrived something along these lines. The employer terminated the employment contract during the probationary period and concluded a new, shorter employment contract with the employee. Is this allowed?

What was the case about?

The employee joined a law firm on 15 August 2019 as a lawyer, based on an annual contract including a one month probationary period. The employer told the employee on 12 September 2019 that his work was not satisfactory. The employer offered the employee a new, shorter employment contract for four months, which the employee had to accept before the end of the probationary period. The employer confirmed this offer in writing on 14 September 2019 and invoked the agreed probationary period, so that the existing contract formally came to an end on 15 September 2019.

Initially, the employee rejected the proposal, at which point the employer confirmed to him that the employment contract had been terminated during the probationary period. On further consideration, however, the employee wanted to stay on with the employer and concluded a new four month employment contract on 16 September 2019. The employer did not extend that employment contract. The employee then issued legal proceedings, asking the court to declare that the employer had acted unlawfully by exerting pressure on him to enter into a new and shorter employment contract. He also claimed payment of compensation of EUR 53,560 gross for lost wages plus statutory interest.

Sub-district court

The sub-district court held that there had not been any unlawful action due to abuse of power or acting in breach of the standards expected of a good employer. This was because the employee had not agreed to the second employment contract under any threat of dismissal during the probationary period. The fact is that he had already been dismissed and the employment contract had already ended before the employee concluded a new contract. It was clear to the employee  that dismissal during the probationary period would logically follow. The sub-district court dismissed the compensation claim.

The line of case law

This ruling confirmed the line in previous case law to the effect that an employer can, in principle, lawfully terminate an employment contract during the probationary period. The dismissal during the probationary period is not rendered unlawful simply because the employer then offers a shorter employment contract.

But this is not entirely without risk, as there are also rulings where the new, shorter employment contract is regarded as a longer probationary period and the court has held that there has been an unlawful dismissal during the probationary period, for instance a ruling along these lines by the District Court of Arnhem (click here, Dutch only). In that case, the employer had talked explicitly about ‘converting’ the initial twelve month employment contract into a six month employment contract. The employer also explicitly indicated that the new employment contract was designed to let it assess the employee’s performance over a longer period. The case law also tells us that  an abuse of power is unlikely if the initiative for a second chance comes from the employee.

Conclusion and tips

To summarise, termination of the employment contract during the probationary period with an offer of a new, shorter contract is possible. But note the following points:

  • confirm the dismissal during the probationary period in writing, so that it can be proved that it was terminated in good time;
  • document the fact that the employee takes the initiative for a second chance;
  • do not pressure the employee into concluding a second employment contract; and
  • give the employee time to consider the offer.

Anneke Pelser & Eric van Dam