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Extrajudicial annulment of employment contract due to fraud successful: employee must repay all wages

31 August 2022

On 11 August 2022, the follow-up to the Supreme Court decision of 7 February 2020 has been published. In this decision, the Supreme Court ruled that an extrajudicial annulment of the employment contract due to fraud is not in conflict with the Dutch dismissal system. In light of this decision, the Court of Appeal of Arnhem-Leeuwarden assessed whether the employer’s appeal on extrajudicial annulment of the employment contract due to fraud could succeed, and if so, what consequences this would have. Read more about this judgment in our blog.

What happened in this case?

In November 2016, the employee applied for the position of Psychotherapist and was also hired for it. At a certain point, the employer suspected that the employee had included incorrect information in his CV regarding his work experience, his education and his membership of various associations. This suspicion of the employer was later confirmed by an alleged former employer. The Inspectorate for Health and Youth Care also confirmed that the employee had never been registered in the BIG-register.

The employer therefore decided to annul the employee's employment contract on the ground of fraud and to reclaim the salary paid to him. The Court of Appeal of Arnhem-Leeuwarden had to decide - in light of the decision of the Supreme Court of 7 February 2020 - on:

  1. Whether the appeal of the employer for (extrajudicial) annulment of the employment contract on the ground of fraud is successful, and if so,
  2. What this means for the already initiated consequences of the employment contract.

Decision Supreme Court

The decision of the Supreme Court on 7 February 2020 makes, among other things, clear that if an employee intentionally makes false statements or intentionally conceals facts from the employer, it commits fraud. Under such circumstances, the employer may rely on the (extrajudicial) annulment of the employment contract. The legal system of dismissal law does not exclude this because it does not protect an employee who commits fraud when entering into an employment contract.

Judgment of the Court of Appeal

1)      Does the employer’s reliance on extrajudicial annulment of the employment contract on grounds of fraud succeed?

According to the Court of Appeal, in the case at hand the conclusion that there is fraud on the part of the employee is justified. The employee knowingly made false statements and thereby ensured that the employer offered him an employment contract. Under such circumstances it is possible to annul the employment contract.

2)      What does this mean for the consequences of the employment contract that have already taken effect?

In this case, the employee received wages without any justification and must therefore repay them to the employer. According to the Court of Appeal, there is no further ground for awarding compensation to the employee. In fact, the employer has not been enriched by the employee's performance. The employee treated patients while he was unauthorized to do so. With this, the employee has already enjoyed unjustified professional trust and is there no reason to pay the employee for this.

Source: Court of Appeal of Arnhem-Leeuwarden 19 April 2022, ECLI:NL:GHARL:2021:3773.

 



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