Can it be unreasonable for an employee to claim compensation for the employer's failure to give written notice in the way required by law?
This question came before the Supreme Court last year. Read on to learn more about the case and the Court's decision.
Giving notice to employees with a fixed-term contract (aanzegverplichting)
The employer has to inform his employee with a fixed-term contract of more than six months whether or not the employment shall be continued, and if so, under what terms. The notice must be given in writing at least one month before the contract ends automatically. This is called the aanzegverplichting and is recorded in article 7:668 of the Dutch Civil Code.
N.B. This notice obligation has to be distinguished from the notice period of termination (opzegtermijn), which concerns how long in advance you must indicate that you want to terminate a permanent contract (or a temporary contract in some cases).
Giving notice to the employee is meant to provide the employee certainty about whether his contract will be extended. If not, it gives him enough time to look for another job.
Compensating in case of failure to comply
Failure to give notice on time results in compensation for the employee. The compensation depends on the situation at hand. If the employer fails to give notice, the employee is entitled to one month's salary. If the notice was not given in time, the employee receives a compensation pro rata; the compensation will be proportional to the time the employer was late.
The principle of reasonableness and fairness
Dutch contract law contains a fundamental principle of reasonableness and fairness (redelijkheid en billijkheid), as set out in articles 6:2 and 6:248, paragraph 2 of the Dutch Civil Code. This principle can put aside a rule if the application of that rule would be unacceptable by standards of reasonableness and fairness (naar maatstaven van redelijkheid en billijkheid onaanvaardbaar).
In the case before the Supreme Court, the employer invoked this principle to not pay compensation for failing to comply with the notice obligation.
The details of the case
The employee had a fixed-term contract of seven months until 1 December 2019. During a meeting on 30 October 2019, the employer told the employee that his contract would not be extended after 1 December 2019. The employee found another job starting from the 1st of December but insisted that the old employer pay one month's compensation because the notice was not given in writing, as required by law.
The Supreme Court's decision
The Court starts by citing the decision of the Court of Appeal: the idea behind the employer having to compensate the employee for failing to give notice on time is to clarify whether his contract will be continued. In case of no extension, the employee can then take measures to secure his income.
The Supreme Court then continues that the court must exercise restraint when assessing whether applying a statutory rule in a particular case is unacceptable according to the standards of reasonableness and fairness. This is especially so if it concerns a rule of mandatory law.
If the rule already includes a balancing of interests by the legislature, a claim on the restrictive effect of reasonableness and fairness concerning those interests will only succeed in exceptional cases.
Applying the principle of reasonableness and fairness
The Supreme Court then goes ahead with assessing the case. The obligation to give notice is mandatory law. It intends to strengthen the employee's position with a fixed-term employment contract. The legislator deliberately chose that the employer not complying with the obligation to give written notice is liable for compensation. The notice, therefore, can be seen as an incentive to comply with the obligation to give written notice.
Conclusion
So, can it be unreasonable for an employee to claim compensation for the employer's failure to give written notice in the way described by law?
No, concludes the Court. The compensation is always due in the event of non-compliance with the written requirement, even if it was clear to the employee that the employment contract would not be continued or if the employee did not suffer any disadvantage due to non-compliance with the written requirement.