Severance pay for refusal of suitable work?

The basic principle is that the employer must pay the employee a transition fee if the employment contract has lasted for at least two years and the employer seeks dismissal. However, the transition compensation is not due if the dismissal is the result of "seriously culpable acts or omissions of the employee. Is this the case if an employee refuses suitable work?

Reassignment in case of illness

The legislative history recalls that serious culpable acts or omissions may occur if an employee structurally fails to cooperate sufficiently in his reintegration in case of long-term disability. The other examples mentioned in the legislative history do not concern suitable work, but, for example, behavior that constitutes an urgent reason for summary dismissal.

We have now seen a number of rulings in which courts have not awarded transitional compensation to employees who wrongfully refused suitable work or failed to cooperate sufficiently in reintegration. In each case, the judge checked whether the refusal to actively cooperate in reintegration was due to the employee's illness. Did the employee not cooperate because he could not do so because of his illness or did he simply not feel like it? If the latter situation is the case, compensation is not always appropriate.

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Reassignment for dysfunction

A similar test could be applied in the case of dysfunction. Is the employee simply unable to improve himself or is it pure unwillingness? In the latter case, in the view of many employers (just as in the case of unwilling sick employees who do not cooperate in reintegration) there are no grounds to pay the transitional allowance. Unfortunately, there are no known judgments yet in which judges have ruled the same way. In order for an employer to avoid paying severance pay, there must be something more. The behavior of the employee must be 'seriously culpable'. This standard is not easily met in the case of dysfunction.

Reassignment in a reorganization

Finally, the refusal to perform suitable work in the event of job decline or downsizing can also play a role. In February, the Amsterdam court ruled on such a situation.

A social plan had been agreed with the unions. That plan included provisions for employees who could not continue to work in their own positions because those positions were eliminated or downsized. Employees were not allowed to simply refuse a job that had been made available and was suitable. If the employee did reject the reasonable offer of suitable work, it would result in the expiration of provisions in the social plan.

An employee who was declared redundant was offered another position for the duration of one year at the same salary and with the same type of work as before. The employee refused that suitable work and ultimately could not claim the compensation that he could normally have received based on the social plan totaling €134,770.90 gross. The employee disagreed and initiated proceedings.

The Subdistrict Court and the Court of Appeal both considered it important that it had been agreed with the trade unions that the employee could not simply refuse suitable work and that if he did so, the entitlement to the transitional allowance (and other provisions in the social plan) would lapse. The employee knew what the consequence of his refusal was, because this was so included in the social plan, and therefore had to bear the consequences.

Conclusion

The refusal to perform suitable work does not yet in all cases result in a situation where the employer does not have to pay transitional compensation, but some openings can be found in case law.

As an employer, you must always take the obligation to offer an employee suitable work and investigate redeployment possibilities seriously, because the court first checks whether there are reasonable grounds for dismissal and then checks whether redeployment possibilities have been investigated. If your company is part of a group, this obligation goes even further and you must look for suitable work within the entire group. If you skip the step of investigating reemployment, the judge will not reach a termination at all.

Finally, should you consider reorganizing, it may be worthwhile to properly regulate in the social plan the consequences of refusing to perform suitable work. That way, you can avoid footing the bill.

Want to know more?

If you would like to learn more about suitable work and the reemployment obligation of employers or other current employment law topics, please register here for one of the current affairs lunches scheduled on this topic starting in April 2018. Of course, you can also contact me briefly.