28 January 2024
Most employers in the Netherlands are aware that the rollout of a restructuring involving compulsory redundancies is bound by the necessary rules.
The Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV) assesses whether these rules have been met when the employer submits a dismissal request for business economic reasons to the Employee Insurance Agency. Where the employer gets permission to dismiss the employee, that is not the end of the matter. If the employer posts a vacancy for the work performed by the dismissed employee within six months, this position must first be offered to the dismissed employee: the recommencement of employment condition.
It can happen that the at some point after an employee is declared redundant and their contract has been terminated, the employer may realise that it once again requires the services of the employee. If this happens within six months of the employment contract being terminated and the employer wants to recruit externally for this, the employer is obliged to offer the position to the previously dismissed employee first. This situation does not change if the job title changes but the requested work remains the same. The position must be offered under the usual current conditions for that position at the company. Therefore, the conditions do not always need to be the same as those previously enjoyed by the former employee. This recommencement of employment condition also only applies to an employee whose employment contract was terminated other than by mutual agreement.
What is the consequence if, in such a situation, an employer does not offer the position to the dismissed employee first? The employee can then demand that they be appointed to the position in question via the Courts, or they can ask for compensation. This situation was addressed in a recent ruling by the Court of Rotterdam. The employer had terminated the employee’s employment contract due to the loss of his position, but within six months their position as chief mechanical engineer became available again.
The employee, who had since found a new job, claimed compensation of damages. The court awarded compensation for the following damages: the difference between the pension contributions to be paid by the new employer and the contributions the old employer would have paid up to the date when the employee was expected to retire early and the tax disadvantage suffered by the employee due to the fact that the compensation is paid in one lump sum, instead of through a monthly payment. Income damages were not awarded as the employee already had a new job and had previously received a transition compensation payment.
It is clear from the Court of Rotterdam’s ruling that the amount of damages always depends on the specific circumstances of the employee. If the employee has already found a new job, then the damages will be lower than if this is not the case. This is something that employers have no control over. In addition, the employee may also choose to be reinstated to their previously redundant position, which may entail problems if a new employee has already been hired for this position. It is therefore wise to offer the position to the dismissed employee first. If you are in doubt as to whether the new position to be offered is equivalent to the redundant position, always consult an attorney before posting the vacancy. Court of Rotterdam 21 April 2023, ECLI (abridged):3217
If you have a legal question about the violation of a recommencement of employment condition, please do not hesitate to contact us.
