4 March 2024

Dismissal with a hefty price tag

By Seliz Demirci

The law lists several grounds for dismissal. An employer can terminate the employment contract if one of these grounds, or a combination of them, is present. It must also be clear that the employee cannot be re-employed within the organisation. One of the grounds for dismissal under the law is a damaged working relationship.

If the employment relationship is damaged to such an extent that the employer cannot be expected to continue it, the employer can have the employment contract terminated on this ground. But what if an employer does not want to continue with an employee and there are no grounds for dismissal under the law?

In that case, a situation may arise where an employer initially cites an unjustified ground for dismissal, such as unsatisfactory performance, which irreparably damages the employment relationship. Initiating dismissal in this way often comes at a high price. The employment contract can be terminated on that ground, but the employer runs the risk that it will have to pay fair compensation to the employee for seriously imputable conduct, in addition to the transitional compensation payment. This is because the conduct of the employer instigated a labour dispute. This situation is also called the ‘Asscher escape’.

Explanation

The Asscher escape comes up regularly in case law, including in a recent court case. In that case, the employee and the employer regularly argued with each other about a variety of issues. The employer claimed that the employee failed to show up at work, or on time, too often. The employee, in turn, had reported sexual transgressive behaviour by her manager. According to the employee, her complaint had not been treated seriously by the employer, which led her to claim that she was working in an unsafe environment.

The employer then initiated a lawsuit to have the employment contract terminated based on unsatisfactory performance and a damaged working relationship. The subdistrict court judge ruled that although the employee had not always complied with the working hours, though she had generally had a good explanation for this. Regarding unsatisfactory performance, the judge ruled that the employer had not given the employee sufficient opportunity to improve her behaviour and performance. There was therefore no evidence of misconduct or unsatisfactory performance. As the parties agreed that the employment relationship had been irreparably damaged, the employment contract was terminated on that ground. This cost the employer dearly.

The court ruled that the employer had unfairly rushed to dismiss the employee by offering her a settlement agreement, suspending her and threatening her with legal proceedings. The employer was ordered to pay fair compensation of €38,000 to the employee. Court of Rotterdam, 11 May 2023, ECLI (abridged): 4148.

Unnecessary insistence on an irreparably damaged employment relationship

In an Asscher escape, an employer deliberately escalates an employment dispute to create a permanently damaged employment relationship. It can be an escape route to end the employment contract.

Worthwhile

The improvement process for unsatisfactory performance is often an intensive route that an employer would rather not take if it no longer has confidence in an employee’s abilities.  Escalating behaviour can therefore sometimes be worthwhile, as proved to be the case in the court case discussed above.

Effort

However, the employer will have to pay the price for this seriously culpable behaviour. In any case, the transitional compensation payment comes into play and most likely a higher, fair compensation. Moreover, such a process costs time, effort and money.

Mediator

It is therefore advisable to exercise restraint in instigating a labour dispute in order to damage the working relationship. Good discussions with the employee, with or without the assistance of a mediator, often help to reach workable agreements.

More information

If you have any questions, please do not hesitate to contact us.

This article appeared earlier in Rendement.

Seliz Demirci

Seliz Demirci

Lawyer

Within the Employment & Pension law section, Seliz advises national and international employers and employees on various employment law issues.

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