Employment Law Newsletter February 2010
"Young people up to age 27 get temporary contracts more often and for longer terms during crisis
Young people in particular are in danger of being hit hard by the economic crisis. The percentage of unemployed youth was 8.6% in January 2008, whereas that percentage was 10.7% in March-May 2009 and the total rate of unemployment was 'only' 4.6%. In order to fight youth unemployment, the government has submitted a legislative proposal to the Parliament, by virtue of which employers will be allowed to employ young people up to the age of 27 on the basis of a fixed-term employment contract for a longer period of time during the crisis. At this time it is provided by law (also called the provisions on the succession of fixed-term employment contracts) that if fixed-term employment contracts have succeeded each other, an employment agreement for an indefinite period of time is created by law either after a period of three years or upon entering into the fourth fixed-term employment contract in a row. The proposal suggests an amendment of this regulation, in that for people up to the age of 27 an agreement for an indefinite period of time is created only after a period of four years or upon entering into the fifth fixed-term employment contract. This would enable employers who are now, due to the present uncertain situation, forced to terminate the employment relationship with a young employee after the third fixed-term employment contract or after three years, to continue the employment relationship for a specific term. If the legislative proposal is adopted, the law will be effective until 1 January 2012. The applicable term of this regulation may be extended by Royal Decree until 1 January 2014 at the latest. The regulation will not affect situations in which a Collective Labour Agreement (""CAO"") differs from the present provisions for succession of fixed-term employment contracts. The new regulation also allows for different provisions in a CAO. When the regulation ceases to be effective, this will not affect the employment agreements of employees to whom this regulation applies and who are working on the basis of a fourth fixed-term employment contract or for whom the period of 36 months has already expired at the time when the regulation ceases to be effective. At that moment these fixed-term employment contracts will not be converted into an employment agreement for an indefinite period of time. This conversion takes place only at the time when the fifth fixed-term employment contract is entered into, or at the time when the period of 48 months has expired. So after 2012 or 2014 (in the event of an extension) the new regulation will remain valid for these cases a little longer.
Days off in connection with the reduction of working time are not holidays
It is provided by law (7:640 of the Dutch Civil Code) that any accrued holidays which have not yet been taken and which are under the statutory minimum number, may not be paid out during the employment. Holidays in excess of the statutory minimum may be paid out. Upon termination of the employment, both the remaining statutory holidays and the holidays in excess of the statutory minimum must be paid out. What rule applies in respect of the paying out of days off in connection with the reduction of working time? In its judgment of 2 October 2009, the Supreme Court has confirmed its judgment of 6 February 1998. The Supreme Court ruled that the legal provisions on holidays were not applicable to days off in connection with the reduction of working time, not even by analogy. Therefore, the question whether days off in connection with the reduction of working time may be paid out, depends on the agreement between the parties, or on the provisions of the applicable CAO.
Employer's liability by virtue of Section 7:611 of the Dutch Civil Code also for non-motorised traffic accidents
Under Section 7:658 of the Dutch Civil Code employers are liable for damage incurred by employees in the performance of their activities at work. Such liability does not exist if the employer has not failed to ensure a safe working environment, or if the damage resulted from deliberate intent or gross recklessness on the part of the employee. No similar legal provisions exist for damage incurred by the employee on another location than the workplace. On the basis of case law however, an employer may in certain cases be liable for damage incurred by the employee away from the workplace. This liability occurs when the employee incurs damage in a motorised traffic accident within the framework of the performance of his activities for the employer and if the damage is not covered by any insurance. The employer is not liable for this damage if the damage is caused by the employee's deliberate intent or gross recklessness, or if the employer has taken out an adequate insurance against such damage, or if the employer has paid the employee a compensation to take out an adequate insurance himself. It was not clear whether an employer was also liable for damage incurred by an employee in a non-motorised traffic accident, within the framework of the performance of his activities for the employer. The Supreme Court recently ruled in the St. Maatzorg / Van der Graag judgment that such is the case. The Supreme Court held that an employer is liable for damage caused by an accident with a non-motorised vehicle and for any damage incurred by an employee who is involved in an accident as a pedestrian together with a vehicle, in the same way as he would be liable for damage caused by a motorised traffic accident. This is remarkable for two reasons: 1. An employee who participates in the traffic as a pedestrian may only claim compensation from his employer for damage incurred, when a traffic accident has occurred in which a vehicle is involved and, consequently, not in the event of a one-vehicle collision or an accident between two pedestrians. 2. To the best of our knowledge it is not possible to take out an adequate insurance at a reasonable premium for nonmotorised traffic accidents. The employer's liability for non-motorised traffic accidents is therefore a risk liability.
Compensation for manifestly unfair dismissal
The Supreme Court recently, on 27 November 2009, made short work of the formula applied by the Court of Appeal of The Hague in granting compensation in manifestly unfair dismissal proceedings (= XYZ formula, see our newsletter of September 2009) and by doing so, in all likelihood also of the formula applied by other Courts of Appeal. According to the Supreme Court, the XYZ formula, which was based on the cantonal court formula applied in rescission proceedings, could expressly not be applied in determining compensation in manifestly unfair dismissal proceedings. The compensation on account of a rescission by court is a compensation based on reasonableness, whereas the compensation in the event of manifestly unfair dismissal is granted on account of incurred damage. The sole circumstance that the employer has not offered the employee a compensation upon dismissal, does not make the dismissal manifestly unfair. As a result of this judgment of the Supreme Court the emphasis in manifestly unfair dismissal proceedings is more on the question whether any damage has actually been incurred. That damage will have to be assessed."