Is termination of an employment contract with the approval of UWV [WERKbedrijf], the administrative office for employed persons insurance schemes, possible under the simultaneous offer of a new employment contract with changed employment conditions? On 24 December 2010 the Dutch Supreme Court expressed for the first time an opinion on the admissibility of a so-called termination of employment and offer of re-employment under new terms [wijzigingsontslag] within the meaning of Article 681(1) and (2) of Book 7 of the Dutch Civil Code within the context of manifestly unreasonable dismissal proceedings. In the opinion of the Supreme Court, a termination of employment and offer of re-employment under new terms via UWV is permitted. This does, however, involve all kinds of obstacles.

Firstly, a distinction must be made between a forced reduction in working hours and a termination of employment and offer of re-employment under new terms. For a forced reduction in working hours, it concerns a dismissal whereby only the number of hours change in the new employment contract that is subsequently offered. For a termination of employment and offer of re-employment under new terms, a new employment contract with changed job content is subsequently offered. In the present case, it concerns a termination of employment and offer of re-employment under new terms.

Whereas the termination of employment and offer of re-employment under new terms via UWV is not regulated by Dutch law, it does provide for the possibility of an employer to change an employment contract on the basis of a unilateral changes clause (Article 613 of Book 7 of the Dutch Civil Code) or on the basis of reasonableness and fairness (Article 611 of Book 7 of the Dutch Civil Code). A strict criterion applies to the unilateral changes clause, specifically that the employer may implement a unilateral change only if he has such a substantial interest thereto that the employee’s interest, which is prejudiced thereby, is outweighed thereby in accordance with the standards of reasonableness and fairness. The option available to the employer to unilaterally change employment conditions based on the standards of reasonableness and fairness has developed in case law. In the Taxi Hofman ruling, the Supreme Court stipulated that in this case it must concern reasonable change proposals that are connected with changed circumstances at the workplace, in which a good employer may see cause for a change. Moreover, it must be possible to reasonably require of the employee that he accept the change.

In this case, the employer opted for a termination of employment and offer of re-employment under new terms. The employment contract involved here consisted originally of two duties, specifically managing a residential complex and providing on-call services. Due to a reorganisation, the on-call duties were outsourced. As a result thereof, the employer requested UWV to give its consent to proceed with a termination of employment and offer of re-employment under new terms. Whereas UWV granted the employer the requested termination of employment and offer of re-employment under new terms, it did attach a premise thereto. This premise means that subsequent to the termination of the current employment contract, the employer offers a new employment contract with changed job content, specifically only for the position of manager.

By pursuing this course, the legal protection provided by Articles 613 and 611 of Book 7 of the Dutch Civil Code is being circumvented. The Supreme Court ruled that this is a factor that must be included in the question as to whether the dismissal was manifestly unreasonable. On the basis of this and the other circumstances of the case, the Court must assess whether (when the employer opts for the termination of employment and offer of re-employment under new terms) the standard laid down by Article 681(1) and (2) of Book 7 of the Dutch Civil Code has been met. At its core, this means that the dismissal may not be granted in violation of the generally accepted standards for good employment practices. In this matter it was ruled on the basis of the aforementioned criteria that a manifestly unreasonable dismissal did not exist. In that regard, it is important that in this situation the adjustment of the job content could not be avoided. In addition, the fact that the employee himself agreed to the reinstatement and in the process accepted compensation in accordance with the ‘Social Guideline’ (agreed with the labour unions) played a role in the ruling. Finally, it is important that the dismissal and the re-employment of the employee correspond with the approval given by UWV and the premise stated thereby.

In sum: in the case of a changed position, the employer may, aside from the options via Article 613 of Book 7 of the Dutch Civil Code (unilateral changes clause) and Article 611 of Book 7 of the Dutch Civil Code (reasonableness and fairness), also opt for termination of employment and offer of re-employment under new terms via UWV. However, in opting for the termination of employment and offer of re-employment under new terms, the employer must take into consideration the possibility of manifestly unreasonable dismissal proceedings (Article 681 of Book 7 of the Dutch Civil Code). The employee can rely on this and take the matter to court. The standard applied by the court is that all relevant facts and circumstances are taken into consideration. In these considerations, the standards in effect for the other routes (Articles 613 and 611 of Book 7 of the Dutch Civil Code) expressly play a role as well. Consequently, the choice for a termination of employment and offer of re-employment under new terms will on balance not derogate much from the substantive assessment standard to be applied to the other routes. The proceedings, however, are clearly different. In many situations, the initiation of proceedings (due to manifestly unreasonable dismissal) by the employee will form a significant hurdle. If the choice for redundancies with invitation to reapply under new employment conditions increases markedly, then it can be expected that UWV will draw up Policy Rules specific thereon, which will reveal many similarities with the assessment criteria of the other routes (Articles 613 and 611 of Book 7 of the Dutch Civil Code).

Miriam Derksen