19 February 2024
Shortly before the summer holidays, the Supreme Court delivered two rulings on summary dismissal. These refer to the urgent reason notice requirement in the dismissal letter and the claim for compensation from an employee who is summarily dismissed.
The first ruling on 30 juni 2023 confirms the paramount importance to employers of a good resignation letter. Although haste is often required in summary dismissals, a dismissal letter that is as specific and fully substantiated as possible is a very important component in determining whether the summary dismissal is legally valid.
At issue in the 30 June 2023 ruling was whether the dismissal letter made it sufficiently clear to the employee the reasons why he had been dismissed. It contained 16 grounds for dismissal, including references via footnotes to documents detailing the allegations. Unlike the Court of Appeal, the Supreme Court found that the letter did make it sufficiently clear what the employee was accused of under the heading of misogynistic remarks, derogatory remarks about colleagues and antisemitic remarks.
Moreover, according to the Supreme Court, when assessing whether the employee was sufficiently clear about the reasons for dismissal, how the employee responded to the allegations made in correspondence preceding that dismissal letter may also play a role. ‘All the circumstances’ of the case thus play a role in whether a dismissal letter is immediately sufficiently clear to the employee, which is well-known to be a requirement for a valid summary dismissal.
In some cases, such as in the case of alleged transgressive behaviour, including sexually transgressive behaviour, the employer has to conduct further investigation into the employee’s conduct before deciding on summary dismissal. Judges are often critical of the quality of such investigations, which can sometimes even lead to the invalidation of a summary dismissal.
In its 30 June 2023 ruling, the Supreme Court also found that the mere fact that a proper investigation had not taken place “does not prevent the existence of an urgent reason”. Although conducting a proper investigation remains important, failure to do so does not automatically mean that the dismissal is invalid.
Finally, the 30 June 2023 ruling confirms that hearing the arguments of both sides is not a necessary condition for a valid summary dismissal. The advice, however, is to always hear the employee. The employer can then confront the employee with their behaviour and the employee is immediately forced to give an explanation of their behaviour. Our tip is to conduct this hearing in the presence of two representatives of the employer and to record the employee’s statement, including any personal circumstances, in a report and/ or dismissal letter.
The second recent Supreme Court ruling of 7 July 2023 concerns the statutory compensation equivalent to the employee’s salary during the notice period that the employer can claim from the employee in the event of summary dismissal. This is also called fixed compensation. Until this ruling, it was unclear whether this is the amount equivalent to the employee’s salary during the notice period that applies to the employer or the notice period that applies to the employee.
The employer issues an employee who has been employed for 17 years with a notice of summary dismissal on 10 July 2023. According to the law, the notice period for the employer is then four months and for the employee one month. Although the employer does not have to give notice in the case of summary dismissal, the employer can seek compensation from the employee for the employee’s salary during the notice period. The Supreme Court has now ruled that this is the amount of salary during the employee’s notice period. In this example, and in general, this is usually one month. In this case, the employer can then claim compensation equivalent to the employee’s salary for the period 10 July to 31 August 2023.
The employer must claim this compensation from the court within two months of the termination date. That is the expiry period. Alternatively, this amount can be directly offset in the final settlement against, for example, the value of outstanding holidays or holiday pay.
If you have any questions or would like more information, please do not hesitate to contact us. Our labour lawyers are ready to help you.
