The cumulation ground will be introduced in Dutch dismissal law as per 1 January 2020.
Currently there are 8 exhaustive grounds for dismissal for an employer to terminate the employment contract with an employee. These grounds for dismissal are laid down in Section 7:669 paragraph 3 of the Dutch Civil Code.
It concerns the following grounds for dismissal:
Ground for dismissal a: Business economic reasons
Ground for dismissal b: Long-term incapacity for work due to illness
Dismissal ground c: Frequent absenteeism due to illness
Ground for dismissal d: Non-performance
Dismissal ground e: Culpable act or omission on the part of the employee
Ground for dismissal f: Refusal of employment due to conscientious objection
Ground for dismissal g: Disrupted employment relationship
Ground for dismissal h: Other circumstances
From 1 January 2020, ground for dismissal i will be added. Namely the ground for cumulation. The cumulation ground refers to an accumulation of (incomplete) dismissal grounds c, d, e, g and h.
Cumulation ground for grounds for dismissal c, d, e, g and h
The cumulation ground makes it possible to terminate the employment contract because of a combination of circumstances mentioned in two or more of the grounds for dismissal c, d, e, g and h, which is such that the employer cannot reasonably be required to allow the employment contract to continue.
It is therefore only possible to combine the grounds for dismissal frequent absenteeism due to illness, non-performance, culpable act or omission on the part of the employee, disrupted employment relationship and other circumstances.
The grounds for dismissal for business economic reasons, long-term incapacity for work and refusal of employment due to conscientious objection cannot be combined with each other. Nor can the grounds for dismissal for business economic reasons, long-term incapacity for work and refusal of employment due to conscientious objection be combined with one or more of the other grounds for dismissal.
The h-ground, on the other hand, does fall within the scope of the cumulation ground. All reasonable termination circumstances may fall within the h-ground as long as those circumstances are not included in one of the other grounds for dismissal.
Because the cumulation ground allows cumulation of the h-ground with all grounds for dismissal with the exception of business economic reasons, long-term incapacity for work and refusal of employment due to conscientious objection the cumulation ground has a wide scope.
Because the cumulation ground allows cumulation of the h-ground with all other grounds for dismissal, all arguments that fit under the h-ground can be combined with the arguments that fit under the grounds for dismissal frequent absenteeism due to illness, non-performance, culpable act or omission on the part of the employee and disturbed employment relationship.
As a result, the cumulation ground seems to become a general ground for dismissal similar to the open standard as it applied to dissolution procedures until 1 July 2015.
Like the other grounds for dismissal, the ground for cumulation will also be included in Section 7:669 paragraph 3 of the Dutch Civil Code. Namely in sub i thereof.
Example application cumulation ground
The cumulation ground could, for example, be applied if the employee is in a process of improvement due to non-performance that breaks down prematurely, because the employer and the employee are in an increasingly bad relationship with each other. In that case, the ground for dismissal non-performance could be combined with the ground for dismissal disturbed employment relationship.
Are there possibilities for redeployment?
Even if there is a ground for cumulation, termination of the employment contract can only follow if redeployment of the employee within the reasonable term of Article 10 of the Dismissal Regulation, with or without the help of training, to another suitable position is not possible or not reasonable.
The question is how this works if the ground for cumulation consists of an accumulation of grounds for dismissal, one of which is culpable act or omission on the part of the employee. For the ground for dismissal culpable act or omission on the part of the employee, the redeployment obligation normally does not apply.
The question is whether, in the case of the ground for cumulation, the obligation to redeploy applies in full. Regardless of which grounds for dismissal are combined. Whether redeployment would not be reasonable if the ground for cumulation entails combining several grounds for dismissal, including the ground for culpable act or omission on the part of the employee.
Cumulation ground and prohibitions on dismissal
For the cumulation ground, a number of notice prohibitions apply in full. This concerns the following prohibitions:
the prohibition to terminate due to membership of or work for a trade union;
the prohibition of termination due to political leave;
the prohibition to terminate due to the employee taking leave;
the prohibition of termination due to transfer of undertaking;
the prohibition of termination due to refusal of Sunday work;
the prohibition of termination on the grounds of discrimination.
For the other notice prohibitions, the reflexive effect of the prohibitions applies. This concerns the following prohibitions:
the prohibition to terminate during illness;
the prohibition of termination during compulsory military service;
the prohibition of termination during pregnancy;
the prohibition to terminate due to involvement in participation;
the prohibition to terminate due to involvement as an expert in the implementation of the Working Conditions Act;
the prohibition of termination as data protection officer.
Reflexive effect of prohibitions means that the court will examine whether the request for dissolution is related to circumstances to which the relevant prohibition relates. If that is the case, the employment contract cannot be dissolved. If that is not the case, the prohibition does not prevent termination of the employment contract.
One of the most common prohibitions is the prohibition to terminate during illness. The prohibition to terminate during illness has – as shown above – a reflexive effect in a procedure to terminate the employment contract because of the cumulation ground. The court will therefore have to examine whether the request for dissolution is related to circumstances to which the prohibition relates.
Cumulation ground and severance pay
If the court dissolves the employment contract because of the cumulation ground, the court may grant the employee an additional fee in addition to the transition fee of up to half of the transition fee. As of 1 January 2020, this is regulated in Section 7:671b paragraph 8 of the Dutch Civil Code. In addition to the additional fee, the court may also grant the employee a fair compensation.
The additional fee is intended to compensate for the fact that the court dissolves the employment contract on the basis of an accumulation of circumstances, each of which does not constitute an independent ground for dissolution.
The additional fee must always be justified. The amount of the fee is related to the extent to which the grounds for dismissal used in the cumulation are unfulfilled.
It is not yet clear how this will work out in practice. Imagine the example, in which the improvement process is broken down prematurely, because the employer and the employee are in an increasingly bad relationship with each other.
Should the judge then assess to what extent the ground for dismissal is not complete and increase the transition fee by the missing percentage? Suppose that the judge judges that the dismissal ground non-performace is 80% complete, does the judge then have to increase the transition fee by 20%?
Or should the judge then assess how long the improvement process would have lasted if the employer and the employee had not entered into an increasingly bad relationship with each other? Suppose the improvement process would have lasted six months, but would have broken down halfway through. Should the three months that the improvement process was interrupted prematurely then be paid out as additional fee in addition to the transition fee, assuming that these three months fall within the maximum of 50% of the transition fee?
How is dealt with the circumstance that if the improvement process had not been interrupted prematurely, the employee might have been able to improve his or her performance and therefore would not have had to be dismissed at all? Does it make a difference who is to blame for the deteriorating relationship?
Transition fee changes
The introduction of the additional fee due to the cumulation ground shall take effect on 1 January 2020. That moment coincides with the moment at which the temporary higher transitional fee for older employees will lapse.
Until 1 January 2020, there is an exception for employees who are 50 years or older upon termination or non continuation of the employment contract and who have been employed for at least ten years by an employer who employs 25 employees or more.
These employees will receive a transition fee of 1/2 month’s salary for every period of six months that they have been employed by the employer from the age of 50. As of 1 January 2020, this no longer applies.
Furthermore, with effect from 1 January 2020 there will be a change in the accrual of the transition fee for each employee.
It is now the case that the employee is only entitled to a transition fee if the employment contract has lasted at least 24 months.
Furthermore, for the first 120 months or the first ten years of service, the employee will receive 1/6th month’s salary for every six months that the employment contract has lasted.
For subsequent years of service, the employee is entitled to 1/4th month’s salary for every six months that the employment contract has lasted.
As from 1 January 2020, this will change into an accrual of 1/3rd monthly salary for each calendar year that the employment contract has lasted and a proportional part thereof for a period that the employment contract has lasted shorter or longer than one calendar year. So both for the first ten years of service and afterwards and therefore also for the first 24 months. The accrual of the transitional fee therefore starts on day 1.
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Other changes to Dutch employment law
The introduction of the cumulation ground is not the only change in Dutch dismissal law with effect from 1 January 2020. As of 1 January 2020, various other changes will take place in Dutch dismissal law and Dutch employment law. For the other changes I refer you to my blog about the changes in Dutch employment law as of 1 January 2020.