A Promise is a Debt (in principle)

In a recent case, a manager promised to extend an employee’s employment contract but ultimately decided not to follow through. The employee challenged this decision in court and successfully argued its case.

The discussion about extending the employee’s contract occurred during a dinner following a business event. The manager expressed doubts about offering a permanent contract due to the organization’s difficult financial situation.

When the employee asked whether he could at least count on another one-year contract, the manager indicated this would be possible if legally permissible. Both parties then toasted to this agreement.

Later, the employee inquired with HR about the possibility of extending their temporary contract, and HR confirmed it could be done. The employee relayed this information to the manager, who responded positively. However, a few months later, the employee was informed that its contract would not be renewed after all.

Authority and Promises

The court ruled that the employer, through the manager, had made an unconditional promise to extend the employee’s contract, which they could not revoke. During the dinner, the manager had clearly stated that the contract would be extended if HR confirmed it was legally permissible, which turned out to be the case. Consequently, the employer was bound by this promise.

The employer’s defense that the manager lacked the authority to make such promises, and that the employee should have known this, was dismissed by the court. It was unclear whether the employee was aware of the manager’s lack of authority. Additionally, the employee had previously discussed employment-related matters with the same manager.

In court, the employer submitted a counter-request to terminate the employment agreement, arguing that the relationship had become irreparably damaged. However, the court found that the employer had not provided sufficient evidence that returning to work was impossible or that efforts had been made to repair the working relationship.

As a result, the employee remained employed for another year.

Takeaway

The key lesson from this case is that employers must be cautious about the promises they make. Employees may have a legitimate basis to rely on those promises.

More Information

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This article was originally published in HR-Rendement.