Since the introduction of the Wet werk en zekerheid (Work and Security Act), we have been familiar with the notification duty under Article 7:668 of the Dutch Civil Code. It is a simple duty for the employer, but with financial consequences if it fails to (correctly) comply with it. The notification duty is briefly addressed in this article on the basis of a Supreme Court judgment.

Notification duty and compensation in lieu of notification

The notification duty obligates an employer to inform an employee no later than one month before a fixed-term employment contract ends by operation of law as to whether or not (i) the employment contract will be continued; and, if it is continued, (ii) the conditions on which it wishes to continue the employment contract. In sum, the notification duty entails an obligation for the employer to inform an employee as to whether and, if so, on what conditions his or her employment contract will be continued. If the employer fails to comply with this notification duty, or to do so in a timely manner, it forfeits to the employee compensation in lieu of notification (pro rata) of up to one month’s gross salary.

In writing

When giving notice, the employer is not required to state reasons why the employment contract will or will not be extended. The employer must, however, give the notification in writing. According to the prevailing doctrine, ‘in writing’ means a (standard) e-mail or a notification letter, but also an electronic notification or communication (such as a WhatsApp message).

Supreme Court

But what if the employee was given timely oral notification that his or her contract will not be extended? Is the employee then also entitled to the compensation in lieu of notification? The Supreme Court recently considered this question, which it answered in the affirmative. The legislature deliberately opted for compensation in the event of failure to comply with the notification duty. According to the Supreme Court, this means that the compensation in lieu of notification also serves as an incentive to comply with the written notification duty. Even if it was clear to the employee on other grounds that his or her employment contract would not be continued, or if the employee did not suffer any disadvantage due to failure to comply with the written requirement, it may therefore be assumed that the severance pay is always due in the event of failure to comply with the written notification duty. By issuing this ruling, the Supreme Court has adopted a strict approach to the written notification duty.

Conclusion

If an employer wishes to correctly comply with the notification duty, it must notify the employee in good time (no later than one month before the employment contract ends by operation of law) and in writing (by e-mail/letter/electronic message) whether and, if so, on what conditions the employment contract will be continued. The Supreme Court recently confirmed the strict application of the written notification duty in this respect. If an employer fails to meet this duty (in good time), it forfeits the compensation in lieu of notification.

Please contact Puck Keurentjes (+31-6-12860380) or Lise van den Heuvel (+31-6-23492248) for more information on this subject.

This article was published in the Newsletter Vestius of December 2022