The Arnhem-Leeuwarden Court of Appeal recently addressed the question of whether a fixed-term employment contract had been tacitly continued. The employee had performed work after her last working day. She believed that the employment contract had therefore been tacitly continued. Lonneke Nouwen and Bas Blaauwhof explain the tacit extension of the employment contract and the court's decision in this blog.
End of fixed-term employment contract
A fixed-term employment contract ends by operation of law unless the employer and the employee have stipulated in the employment contract that the employer must give notice of termination. If an employer does not have to give notice of the fixed-term employment contract (entered into for six months or longer), he is obliged to give timely notice. This means that at least one month before the end of the fixed-term employment contract, the employer must inform the employee in writing whether or not to continue it. If an employer fails to fulfill this obligation in a timely manner, it will owe the employee compensation equal to the employee's monthly salary.
Tacit extension of fixed-term employment contract
Despite the above, a fixed-term employment contract can be tacitly renewed. Tacit renewal means that nothing actually changes after the expiration of the term of the employment contract. In that case, the employee performs his work without any action on the part of the employer. The fixed-term employment contract is then deemed to have been continued for the same period of time, but for a maximum of one year, based on the same terms of employment.
To illustrate. An employer and his employee have agreed on an employment contract for the duration of one year. The employee will perform work as a production worker. They agree in the employment contract that it will end by operation of law after that year. The employee and employer do not discuss the end of the employment during the year. After his last day of work, the production worker still comes into the factory to perform his usual work. If the employer allows this, there is tacit renewal of the employment contract.
Case law: conduct of employer is decisive
The Supreme Court already ruled in 2007 that the employer's conduct is decisive when answering the question of whether a new fixed-term employment contract was tacitly concluded. The Supreme Court held that what matters is whether the employee was entitled to assume, based on the employer's conduct, that the employment contract was tacitly continued after the expiration of the time for which it was entered into.
The Arnhem-Leeuwarden Court of Appeal was recently presented with this question. In this case, the employer had complied with its obligation to give notice well in advance. The notice even explicitly stated when the employee's last working day would be. The employee subsequently followed a career counseling program with the employer in order to look for a new work environment.
The employer's roster maker accidentally scheduled the employee the two days after her last day of work anyway. Incidentally, the new schedule also mentioned that the employee would be off duty. The employee also worked on those two extra days. The following day, she sent her employer a letter stating that the employment contract had thereby been tacitly renewed. The employer disagreed. He believed that it was perfectly clear to the employee that and when the employment contract would end. That she had been scheduled as a result of a misunderstanding did not alter this, according to the employer.
The court considered that tacit continuation of the employment contract requires at least that the employee should have reasonably inferred from statements and/or conduct of the employer that the employer's intention was to continue the employment. The court then agreed with the employer's position. Indeed, the employer had complied with its duty of notice, after which the employee followed the career counseling program with her employer. That the employee continued to work for two days because she was still on the roster, the court of appeal considers careless on the part of the employer. However, this does not lead to the conclusion that the employee was entitled to infer that the employer wanted to continue the employment contract. Therefore, the employment contract was not tacitly continued.
Conclusion
If you do not wish to renew your employee's fixed-term employment contract, you must determine whether you must give notice or give notice. Even if you have fulfilled your obligations regarding termination, there may be a tacit extension of the employment contract. A judge will assess, based on your conduct, whether your (former) employee could reasonably assume that the employment contract will be tacitly renewed. You would be wise to guide the employee in the transition to other work after the notice, not to make any announcements from which the employee could infer that the contract is nevertheless being continued, and under no circumstances to allow the employee to enter the workplace after the end of the employment contract. This way, there can be no misunderstanding about your intentions regarding the continuation of employment.
