Employment Law Newsletter May 2009

“Keep the good employees in times of recession In the unfortunate event that your company orinstitution is indeed affected by the recession, this mayhave consequences for the existing employmentrelationships. The first thing to do is establish howflexible you are regarding your employment relations inhard times. If it becomes evident that compulsoryredundancy is the only way out, you would rather keepthe good employees. This requires clever restructuringwith due observance of the statutory rules in the areaof employee participation and collective redundancy.Our firm can greatly assist you in this process, as wehave ample experience in restructuring. If required, wecan also provide advice in situations where it isnecessary to restart a business.Change in employment agreement, change infunctionsThese factors can play a role in times of recession. Inthe Stoof/Mammoet ruling, the Supreme Court clarifiedthe norms in this context as follows:In 1998, the Supreme Court ruled in the so-called ‘TaxiHofman case’ that, as a general rule, an employeeshould agree to an employer’s proposal to change theemployment agreement. A rejection was only possibleif the acceptance of the proposal could not reasonablybe expected from the employee. Until now, this rulinghas often been interpreted in such a way that it israther easy for the employer to change the employee’semployment agreement if the work changes: as a goodemployee, he or she will not simply be able to rejectsuch a proposed change. With its ruling of 11 July2008, the Supreme Court made a significantqualification in this ‘change doctrine’, in favour of theemployee. In this case, the employee rejected theproposed change in function. The ruling is referred toas the Stoof/Mammoet ruling, after the names of theparties. To answer the question what may reasonablybe expected from the employee in the event of achange in function, the Supreme Court came up withthe following ‘checklist’:1. Are the changes in the business such that theyjustify a proposed change by the employer? 2. Is the proposed change by the employerreasonable?3. May acceptance of the proposal reasonably beexpected from the employee?In answering these questions, all circumstances mustbe taken into consideration, and the employer mustinclude the interests of both parties in itsconsiderations. If all these questions can be answeredwith ‘yes’, the proposal to change the employmentagreement is reasonable and the employee may notreject this proposal.With these clear guidelines, it seems more difficult forthe employer to change employment conditions. Whenthe employer has explicitly included in theemployment agreement that the employer maychange the employment conditions unilaterally, thismay provide more flexibility. The employer must,however, have such a substantial interest in thechange that this outweighs the interest of theemployee. Although such a unilateral change clause ismainly intended for collective changes (e.g. changesin a Staff Manual), the Supreme Court does notexclude the possibility that such a clause may be usedfor individual changes (change in the employmentconditions of only one employee). All this only applies,of course, if the parties cannot come to an agreementon a change in the employment conditions.Obligation to insure commuter traffic:Road accidents also occur during working hours.Commuter traffic frequently gives rise to legaldisputes. The Supreme Court recently wrote a clearruling on this issue (JAR 2009/17).The female employee usually worked at the principalplace of business of her employer in Gorinchem, butshe was asked to work at a location in Tiel on aspecific day. She complied with the request, and shedrove from Gorinchem to Tiel on a certain day. On theroad she was involved in a road accident. The femaleemployee claimed damages from her employer. TheDistrict Court held that the accident occurred duringregular commuter traffic. In that case, the employer isnot liable. This judgment was upheld in appeal,on different grounds: The Supreme Court arrived at the following importantopinion:1. If an employee travels from his home to his work,this is in principle in the personal domain of theemployee (so no employer’s liability).2. The employer can, however, still be liable if it isevident that the traffic must be equated with traffic thatforms an integral part of the work.3. If it concerns traffic that is part of the work, theemployer may be responsible for insuring the employeeproperly in a manner befitting a good employer. TheSupreme Court had previously ruled on this subjectmatter in 2008.Experiences with the new district court formulaThe new formula, that took effect on 1 January 2009,has been applied several times since then. In itsapplication, the focus has been on the characteristiceffect of the formula.On 30 January 2009, the Amsterdam District Courtgave a judgment on a conditional request fortermination of an employment agreement following asummary dismissal at the end of 2008. The courtdecided that there was no urgent cause for a summarydismissal and that the employee with an unblemishedemployment of 17 years would be entitled to a paymentin accordance with the new district court formula.Weighting the age in accordance with the new formulais as follows: all years until the age of 35 count as 0.5;the years from the age of 35 to 45 count as 1; the yearsfrom the age of 45 to 55 as 1.5; and the years from theage of 55 as 2. In its judgment, the District Court alsoexplained how the classification in age categories inaccordance with the new district court formula is to takeplace. The employee has 17 years of service.Subsequently, the years of service must be calculatedfor each age category (25 to 35; 35 to 45; etc.). Untilthe age of 35, the person involved had worked 13years and 8 months, so rounded up, this equates to 14years. After the age of 35, he had worked 3 years and8 months, so rounded up, this equates to 4 years. As the total number of years of service would total 18,this total must be rounded down at the end, and in thiscase in the lowest age category. This is in accordancewith a supplement to the new district court formulafrom the circle of district court judges of January 2009.As a result of this, the total years of service of 17years is reached in the end. In accordance with thenew rule of ‘rounding up or down for each agecategory’ it is however also possible that there are ‘toofew’ years of service in the end as a result of theclassification of years of service for each agecategory. In that case, the years of service must berounded up in the highest age category.On the basis of the following examples, the effect ofthe new formula becomes transparent:Example 1Employee (Mr X) was born on 1 May 1952, andentered the employment on 1 April 1985.Termination is expected to take effect on 1 December2009.Step 1 Upon entering the employment, Mr X was aged32 years and 11 months and on leaving theemployment Mr X will be aged 57 years and 7 months.So: 57/7 – 32/11 = 24/8, thus 25 years of service.Step 2 Weighted years of service:ï‚· Until the age of 35 years:2 years + 1 month, rounded down, 2 x 0.5 = 1ï‚· 35 to 45 years of age:10 years of service x 1 = 10ï‚· 45 to 55 years of age:10 years of service x 1,5 = 15ï‚· from 55 years of age:2 years + 7 months, rounded up, 3 x 2 = 6Total of weighted years of service: 32Example 2Employee (Mr X) was born on 1 May 1952 andentered the employment on 1 February 1985.Termination is expected to take effect on 1 October2009. Step 1 Upon entering the employment, Mr X was aged32 years and 9 months, and on leaving theemployment Mr X will be aged 57 years and 5 months.So: 57/5 â 32/9 = 24/8, thus 25 years of serviceStep 2 Weighted years of service:ï‚· Until the age of 35 years:2 years + 3 months, rounded down, 2 x 0.5 = 1ï‚· 35 to 45 years of age:10 years of service x 1 = 10ï‚· 45 to 55 years of age:10 years of service x 1,5 = 15ï‚· from 55 years of age:2 years + 5 months, rounded down, 2 x 2 = 4Total years of service 24, weighted: 30The total years of service taken into account accordingto step 2 is 24 instead of 25 (according to step 1).Therefore the years of service in the hightest agecategory must be rounded up (3 x 2 = 6). As a result ofthis, the total weighted years of service is 32. Use of this newsletter by other parties without the sender’s permission constitutes an unlawful act. Liability is limited to the amount paidout by the professional liability insurer. This news letter is for informative purposes only and does not constitute any legal advice.