Non-performance is one of the 8 exhaustive grounds for dismissal for an employer to be able to terminate the employment contract with an employee. It is the ground for dismissal, which is included under d of Section 7:669 paragraph 3 of the Dutch Civil Code and is therefore also referred to as ground d for dismissal.
The other 7 exhaustive grounds for dismissal for an employer are:
Grounds 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
Dismissal ground e: Culpable act or omission 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
Non-performance concerns the termination of the employment contract due to the unsuitability of the employee for the stipulated work other than due to illness or disability.
In order for the employment contract to be terminated on the grounds of non-performance, there must be actual non-performance. Furthermore, the non-performance must not be the result of illness or disability. Moreover, the employee must have been informed timely by the employer that according to the employer there would be non-performance.
In addition, the employer must have tried to improve the performance. In addition, the non-performance may not be the result of insufficient training of the employee. Furthermore, the non-performance may not be the result of insufficient attention to the working conditions of the employee.
The employer will have to demonstrate that all these requirements have been met. It is possible that more requirements apply. Before you start working with non-performance as an employer, it is therefore important to check whether policies or procedures have been laid down with regard to the non-performance of an employee. This may be included in a collective labour agreement, employment conditions manual or any other document.
It is important to check this first. Otherwise, you run the risk you have to start all over again from the judge. Non-performance is a ground for dismissal that requires dissolution of the employment contract by the judge.
It should also be borne in mind that it is required that there are no possibilities for redeployment. Finally, it is important to note that there may be full application of the notice prohibitions or reflex effect of the notice prohibitions.
In the following, I will first discuss the requirements mentioned above. Next, I will discuss that there should be no redeployment possibilities. I will also discuss the termination prohibitions and their reflex effect. Finally, I will address the question of whether – if the employment contract ends – the employee is entitled to a severance payment.
Actual non-performance
The employer will have to demonstrate that there is actually non-performance. This may also be the case if there is a pattern in which the employee, after being confronted with his or her non-performance, is supervised more intensively for some time and then functions better, but then falls back into the behaviour to which he or she had previously been addressed. This is evident, for example, from a judgment of the subdistrict court in Amsterdam.
However, it should be borne in mind that this is not always the case. The Court of Appeal of Arnhem-Leeuwarden rejected the dissolution request on the grounds of non-performance in a situation in which there were multi-year improvement trajectories with partly successful results.
Furthermore, a judgment of the Subdistrict Court of Maastricht has shown that no non-performance is assumed if the fixed-term employment contracts have always been renewed and the employment contract was converted into an employment contract for an indefinite period of time shortly prior to the alleged non-performance.
The Subdistrict Court of Leeuwarden did not go along with the desired dismissal due to non-performance, because the non-performance only concerned work, which was a fraction of the total range of duties.
Again, it should be borne in mind that this is not always the case. The Court of Appeal of Arnhem-Leeuwarden, for example, ruled that the dissolution was justifiably due to non-performance, despite the fact that the non-performance only concerned a small part of the tasks.
Regarding having to provide proof the non-performance must not be conclusively established. The standard is sufficiently plausible. This is evident from the Supreme Court’s ruling of February 2018 on Decor.
Whether or not there is non-performance gives the employer a certain degree of discretion. The court can judge whether the process is well organised, but cannot judge whether the employee performs well or not.
Non-performance is not the result of illness or disability
The non-performance must not be the result of illness or disability. In case of illness or disability, the employee is not able to function properly. The employee is not able to perform his or her work optimally due to illness or disability. This cannot constitute grounds for dismissal due to non-performance.
For objectively demonstrable illness or disability, such as a broken arm, it is generally clear that the illness or disability means that the work cannot be performed optimally. In the case of not objectively demonstrable illness or disability, this often becomes more difficult. Especially, if the employee is not honest with the employer about this. In that case, it is possible that the employee does everything possible to perform optimally despite the illness or disability, becomes overburdened and performs even less.
It is particularly difficult if the employee does not realise that he or she has an illness or disability, nor that he or she is performing worse as a result. You regularly see this, for example, in employees who are heading for a burnout. They often suffer from loss of concentration, among other things, but are regularly unaware of this.
Informing timely about non-performance
The employer must inform the employee in a timely and clear manner about his or her non-performance. It is important that it is clear on which points there is serious criticism on the functioning of the employee. Performance interviews and appraisal interviews, for example, are suitable moments for this.
It is advisable to inform the employee in writing of his or her non-performance, as evidenced by a decision of the Den Bosch Court of Appeals.
Statements, which are drafted at a later moment, are generally of no benefit to the employer, as evidenced, among other things, by a judgment of the Roermond Subdistrict Court.
If the employee does not agree with an assessment and it is possible for the employer to use an objection procedure to denounce the alleged wrong assessment, it is advisable to do so, as evidenced by a decision of the Court of Appeal of Arnhem-Leeuwarden.
Trying to improve the non-performance
Furthermore, the employer must give the employee the opportunity to improve the non-performance by means of a process of improvement. The required duration of the improvement process strongly depends on the facts and circumstances.
A judgment of the Court of Appeal of The Hague, for example, shows that a three-month improvement process was deemed insufficient for an employee in the service of a hotel. The Court of Appeal arrived at this judgment partly because of the negative approach of the improvement process.
On the other hand, the Subdistrict Court of Alkmaar did consider a three-month improvement procedure sufficient. One of the factors that played a role in this was that, according to the Subdistrict Court, the improvement procedure had been carefully designed, the function had been simplified, and the employee nevertheless continued to make many mistakes.
In the published case law, there are also regular improvement processes that have lasted significantly longer than three months. For example, a year, a year and a half or even years. An example of such a long improvement process can be found in a judgment of the Court of Appeal of Den Bosch.
In general, an improvement process may not be terminated prematurely. However, this may be different if the employee does not make sufficient progress. This can be seen, for example, in a judgment of the Court of Appeal of Arnhem-Leeuwarden.
Furthermore, a decision of the Arnhem-Leeuwarden Court of Appeal and a decision of the Court of The Hague show that the nature and level of the employee’s position is taken into account when assessing whether the employee has been given sufficient opportunity to improve the non-performance.
According to the Subdistrict Court in Utrecht, a high-ranking employee (in this case a manager) may be expected to come up with an improvement plan based on feedback. The improvement plan must first of all show that the employee understands and also acknowledges that improvement of functioning is necessary in certain areas and that the employee is motivated to actually take up those areas of improvement.
A judgment of the Court of Appeal of Amsterdam shows that it is possible that, as part of an improvement plan, the employee may be required to temporarily give up the home working day and work entirely from the office.
Furthermore, a decision of the Court of Appeal of Den Bosch shows that the employer is not always required to initiate an improvement process. In the situation submitted to the Court of Appeal, no improvement program was offered because the employee denied that he or she was not performing well. According to the Court of Appeal, a process of improvement in such a case made little sense. The Court of Appeal maintained the dissolution pronounced by the Subdistrict Court on the grounds of non-performance.
However, it should be borne in mind that this was a situation in which the employer had repeatedly offered the employee help and guidance, but the employee did not find it necessary to improve his performance. It was also a case of an employee who had been addressed repeatedly and in clear terms, namely in the form of a written warning, about his non-performance.
As an employer, you cannot assume too quickly that an improvement plan is no longer necessary or makes no sense. It will have to be very clear to the employee that you are of the opinion that he or she is not performing well. It is also important to offer help and guidance.
As an employee, you will have to remember that you may not agree with the criticism your employer has about your performance, but that it is advisable to remain open to a discussion with your employer about your performance. Furthermore, it is always advisable to make it clear that you are open to a process of improvement.
It is generally assumed that the employee also needs to be clearly informed about the consequences of the lack of improvement for his or her employment. For example, the Rotterdam Subdistrict Court ruled that the employer may be expected to make it clear to the employee what the consequences will be if no improvement is made. According to the Subdistrict Court, the mere remark that the employer would be forced to “take less pleasant measures” was insufficient.
Non-performance is not the result of insufficient training
The non-performance must not be the result of insufficient training. After all, since the new dismissal rules, the employer has an explicit training obligation. The exact scope of the training obligation will depend on the circumstances. Therefore, it is important on which points there is criticism and with which training those points of criticism can be remedied. This is evident from a judgment of the Court of Appeal of Arnhem-Leeuwarden.
In any case, the training obligation for the employer includes the obligation to ensure that the employee has the necessary certificates and diplomas, as evidenced, among other things, by a decision of the Subdistrict Court in Roermond and a decision of the Subdistrict Court in Amersfoort.
Non-performance is not the result of insufficient attention to working conditions
The non-performance must not be the result of insufficient attention to working conditions. The employer must ensure a healthy and safe working environment. This includes not only the physical conditions, such as wearing protective clothing and shoes, but also social safety. For example, the employer must also protect the employee against bullying and (sexual) harassment.
If the employer has not provided a healthy and safe working environment and, as a result, the employee does not or no longer function properly, dismissal for non-performance is not possible. Dismissal for non-performance is possible if the non-performance has nothing to do with the working conditions.
Are there any redeployment options?
Even in the case of non-performance, termination of the employment contract can only follow if redeployment of the employee within the reasonable term of Article 10 of the Dismissal Regulation, whether or not with the help of training, in another suitable position is not possible or not reasonable. The position of the employee may, for example, mean that redeployment is not reasonable.
Furthermore, it will depend on the size of the organization whether redeployment is an option. This is evident from Article 9 of the Dismissal Rules, a judgment of the Subdistrict Court of Utrecht and a judgment of the Court of Appeal of Arnhem-Leeuwarden.
If there are more redeployment candidates, the employer may redeploy the most suitable redeployment candidate in accordance with a decision of the subdistrict court of Bergen op Zoom.
Non-performance and notice prohibitions
A number of termination prohibitions apply in full to the ground for dismissal. This concerns the following termination prohibitions:
- the termination prohibition due to membership of or work for a trade union;
- the prohibition of termination due to political leave;
- the prohibition of termination due to the employee taking leave;
- the termination prohibition due to transfer of undertaking;
- the prohibition of termination due to refusal of Sunday work;
- the prohibition of termination on the grounds of discrimination.
The other termination prohibitions have reflexive effect. This concerns the following notice prohibitions:
- the termination prohibition during illness;
- the prohibition of termination during compulsory military service;
- the termination prohibition during pregnancy;
- the termination prohibitions due to involvement in participation;
- the prohibition of termination due to involvement as an expert in the implementation of the Working Conditions Act;
- the prohibition of termination by reason of involvement as an expert in the implementation of the Working Conditions Act;
- the termination prohibition by reason of the data protection officer.
Reflexive effect of prohibitions of termination means that the court will examine whether the request for dissolution is related to circumstances to which the relevant prohibition of termination relates. If that is the case, the employment contract cannot be dissolved. If that is not the case, the prohibition of notice does not prevent termination of the employment contract.
One of the most common termination prohibitions is the prohibition of termination during illness. The prohibition of termination during illness has – as is evident from the above – a reflexive effect in a procedure to terminate the employment contract due to non-performance. The court will therefore have to examine whether the request for dissolution is related to circumstances to which the prohibition of notice in question relates.
In a judgment of the Subdistrict Court of Roermond, an example can be found of a situation in which dismissal takes place due to non-performance, in which it is ruled that the prohibition of termination during illness does not stand in the way of dissolution.
On the other hand, in a judgment of the Haarlem Subdistrict Court, an example can be found of a situation in which the prohibition of dismissal during illness means that dismissal cannot take place due to non-performance.
Is the employee entitled to a severance payment?
In general, the employee who is dismissed for non-performance will be entitled to the transition fee. This is only different if there is a serious culpable act or omission on the part of the employee. Published case law shows that this is generally not the case.
It is also possible that the employment contract is terminated for non-performance despite the fact that the employer can be blamed. In that case, the employee may be entitled to a fair compensation in addition to the transition fee. This is when it is assumed that the dissolution of the employment contract is the result of serious culpable acts or omissions on the part of the employer.
Published case law shows that this is generally not the case either. Instead, it is often in cases like that concluded that the contract is not dissolved. The accusation that the employer can be blamed will generally mean that not all requirements that apply to a dismissal for non-performance have been met.
It does happen, however, that the employment contract is dissolved on the grounds of non-performance with the granting of a fair compensation. For example, in the event of a mismatch. This is evident from a judgment of the subdistrict court of Amsterdam, among other things.
What also happens is that a disrupted employment relationship has arisen as a result of the alleged non-performance and that the employment contract is then dissolved on that ground. Regularly, however, in cases like that a fair compensation is awarded. In that case it is more likely that the dissolution of the employment contract is the result of serious culpable acts or omissions on the part of the employer. For more information about this ground for dismissal, I refer you to my blog about the disrupted employment relationship.
For examples of a judgment in which the conduct of the employer in the context of non-performance resulted in a disrupted employment relationship and fair compensation, I refer you to a judgment of the Subdistrict Court of The Hague, a judgment of the Subdistrict Court of Maastricht and a judgment of the Subdistrict Court of Rotterdam.
It should be borne in mind, however, that certainly not every judge goes along with this. It is also held that the disrupted employment relationship is due to the employer because the disrupted employment relationship lies in the position of the employer that the employee is not performing well and therefore the employment contract will not be dissolved. This is evident, for example, from a judgment of the Subdistrict Court of Arnhem.
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