The Netherlands: Transition payment may also be owed after instant dismissal
Transition payment after instant dismissal
Can an employer still owe a transition payment after a justified instant dismissal? The law states that a transition payment is not owed if the employee acted seriously culpable. Instant dismissal requires an urgent cause, but it is imaginable that the employee cannot be blamed for that cause in every case.
Opinion of the advocate general
On 12 January 2018 the attorney general delivered their opinion in cassation proceedings before the Supreme Court and recommended that, in principle, there should be no entitlement to a transition payment in case of a justified instant dismissal (SC 12 January 2018, ECLI:NL:PHR:2018:46). If there is an urgent cause that justifies the instant dismissal, the Court need not, according to the attorney general, give a separate judgment on the question of whether or not an action is also seriously culpable and whether or not there is an entitlement to a transition payment.
Unlike the attorney general, the Supreme Court ruled, on 30 March 2018, that an employer may also owe a transition payment after a justified instant dismissal (SC 30 March 2018, ECLI:NL:HR:2018:484). The Supreme Court determined that seriously culpable actions or omissions cannot be assumed merely because there is an urgent cause for instant dismissal. After all, the assumption of an urgent cause does not require culpability on the part of the employee for their actions. According to the Supreme Court it is therefore not impossible that an employee who was dismissed with immediate effect in a legally valid way is, in fact, entitled to a transition payment.
It follows from the Supreme Court judgment that a transition payment may also be granted after a justified instant dismissal. This will be the case if an employee’s action does constitute an urgent cause for instant dismissal, but the employee did not act in a seriously culpable manner. Below are two real-life examples.
On 11 September 2018 the Court of Appeal Arnhem-Leeuwarden ruled, in keeping with the Supreme Court judgment, that a transition payment was owed after a justified instant dismissal (Court of Appeal Arnhem-Leeuwarden 11 September 2018, ECLI:NL:GHARL:2018:8329).
In this case the employee worked as a car wash employee. His employment agreement was subject to the collective agreement for motor vehicles and two-wheelers, which includes a prohibition on the performance of competitive activities. The employee had a workplace accident. During his incapacity for work the employee registered with the Chamber of Commerce that he ran a one-man business, aimed at cleaning cars. The employee also created a website. After the employee commenced his rehabilitation, the employer requested an offer for car cleaning services via the website of the employee. After receiving the offer, the employer dismissed the employee with immediate effect.
The Court of Appeal determined that competitive work was being performed. Operational activities were carried out by approaching the public via the website and by issuing an offer. This constituted an urgent cause. Nevertheless, a transition payment was granted since the employee did not act in a seriously culpable manner according to the Court of Appeal. Even though the employee registered a business, launched a website and issued an offer, the employer was hardly prejudiced. After all, on the date of dismissal the employee did not have a single customer yet and had no or very few business resources.
Actions performed by a third party
In earlier proceedings the Court of Appeal Arnhem-Leeuwarden had already ruled that a transition payment was owed after a justified instant dismissal (Court of Appeal Arnhem-Leeuwarden 23 March 2018, ECLI:NL:GHARL:2018:2831). In principle, actions performed by a third party cannot constitute an urgent cause for instant dismissal. Incitement or any form of cooperation to the unacceptable conduct of the third party may, however, constitute an urgent cause. That was the case in these proceedings.
The case concerned an employee who had recorded a conversation with his employer and had given the sound recording to his brother. Next, his brother had uploaded the sound recording to YouTube. The fact that the employee had given the sound recording to his brother was sufficient for instant dismissal. Since the role of the employee in uploading the sound recording to YouTube was modest, there was no serious culpability. The Court of Appeal ruled that the employer had to pay the employee the transition payment after all.