‘It’s my way or the high way’-approach costs employer small fortune

In a recent judgment (LJN: BW1460), the Dutch sub district Court emphasized once again the importance of having a complete personnel file of malfunctioning when seeking dissolution of an employment contract. The lack of such a file, cost the employer in this case € 300.000,-. According to the sub district Court, the employer was unable to prove sufficiently that the employee was malfunctioning. Moreover, the employer did not give the employee enough opportunity to improve himself. Having established itself recently in the Netherlands and thus unfamiliar with Dutch employment law was no excuse for the international employer.

Background information  

The employee started working for the international company in 2008, with business locations in Asia and North-America. In 2011, he was promoted to Human Resources manager. During his first evaluation as manager in January 2012, he was informed by his employer that he did not perform the job effectively. According to his employer, the employee failed to take (enough) responsibility for his department and he did not respond correctly to criticism. Moreover, the employee engaged in emotional unstable behavior which did not match the culture of the organization. Only five days after this evaluation, the employer suspended the employee, blocked his email-account and requested the sub district Court dissolution of the employment agreement.

Different management style

The sub district Court was apparently not amused by the employer’s line of actions. In the judge’s opinion, the employee had performed his tasks properly since the beginning of his employment relation. No kind of malfunctioning could be proven sufficiently to the Court. In addition, the alleged malfunctioning had not been explicitly pointed out to the employee. From the personnel file, it could only be proven that the employee might have had a different management style. However, another management style does not necessarily result in incapability of performing ones duties, according to the Court.

Performance Improvement Plan

The sub district Court neither agreed with the statements of the employer that a Performance Improvement Plan had been given to the employee. As the lapse of time between the evaluation and the request to the sub district Court to dissolve the employment agreement was only a week, it did not sound very credible that the employer actually gave the employee the opportunity to improve himself. The employee was not even provided the opportunity to write down his own comments in reply to his evaluation. This way of handling, in combination with the suspension and blocking the email-account of the employee, made the employer acting against what is expected from an employer in the Netherlands. Having established itself recently in the Netherlands and thus unfamiliarity with Dutch employment law was not a valid excuse for the international employer. According to the Court, due to the current dispute, dissolution of the employment agreement was inevitable. However, the employee was entitled to a compensation of € 300.000,-.

Conclusion

In the Netherlands, it is important for an employer to start writing a Performance Improvement Plan if an employee is performing poorly. Furthermore, it is of great importance to start monitoring all the efforts undertaken to coach the (malfunctioning) employee. In this case, the employer’s behaviour was clearly unacceptable, according to what is expected from employers in the Netherlands, which resulted in the employee making a small fortune. Still, be aware that employers in the Netherlands, relying on the slogan, ‘it’s my way or the high way’, could start saving money, as in most cases, judges won’t hesitate granting an ample compensation to the employee, when an employer lacks a complete personnel file.

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