Summary dismissal and the right to wages

If a summary dismissal is quashed by the subdistrict court but subsequently upheld on appeal, the employee is not automatically eligible for to wages for the period in between, according to a landmark ruling of the Dutch Supreme Court.

Summary dismissal
A summary dismissal is often regarded as the most drastic measure that can be taken against an employee. He loses any claims to wages with immediate effect, and is almost always denied unemployment benefits on the grounds that he is to blame for the loss of employment. The law sets strict requirements for such a dismissal, The reason for the dismissal must be ‘urgent’; think of theft, aggression or a similar reason. The dismissal must be given ‘without delay’. Waiting too long, for example to think the matter over or to seek advice, is not allowed, and the reason for the dismissal must be clearly pointed out to the employee. This means that a dismissal letter must also be given on very short notice and that the right wording tends to be critical.

Court scrutiny
Courts are especially critical if an employee challenges a summary dismissal. In retrospect, they often find the dismissal to be invalid, for example, because the reason was not ‘urgent’ enough, the dismissal letter was unfortunately worded or the employer unduly hesitated before giving notice of the dismissal. The subdistrict court may quash a summary dismissal at the employee’s request. An employer finding it difficult to reconcile itself with that situation subsequently has three months to appeal with the Court of Appeal. The entire case is then reviewed anew. The Court of Appeal has repeatedly upheld a summary dismissal that is appealed.

Right to wages?
In that case, the employment contract does not terminate with retroactive effect to the original dismissal date, but terminates on the date set by the Court of Appeal. That date cannot be earlier than the date of the ruling. Therefore, even if the summary dismissal is eventually held to be justifiable, the employment contract does not terminate until a later date, set by the Court of Appeal. Until recently, the question then arose whether the employee was entitled to wages for the period in between. This question used to divide opinions. This issue has now come to an end with the Supreme Court of 13 July 2018.

Supreme Court Ruling of 30 July 2018
A book printer summarily dismissed an employee on the grounds of theft of books. The employee filed suit. The subdistrict court quashed the dismissal. However, on appeal the Arnhem-Leeuwarden Court of Appeal held that the employee had justifiably been summarily dismissed. The Court of Appeal decided that the employment contract terminated on the day following its ruling. Because the employment contract continued to exist after the summary dismissal, the employee retained the right to wages, in principle. ‘In principle’ because the Court of Appeal ruled that the employee could not enforce that claim since he had not worked in the relevant period and the reason was not within the employer’s scope of risk. The Supreme Court approved this line of reasoning, thereby settling the issue which had been unclear already for some time.

An employer that appeals an order quashing a summary dismissal would be wise to no longer allow the employee to work. An employee who works is obviously entitled to wages as usual. This also means that an appeal, if any, should be lodged as quickly as possible. Although the statutory term is already short (three months), the employee will want to return to work as quickly as possible if the subdistrict court decides in his favour in order to safeguard his claim to wages.

With the ruling of 13 July 2018, the Supreme Court removed an important risk for employers in case of a summary dismissal. Summary dismissal remains a drastic measure that an employer should use only as a last resort, but if that summary dismissal is given and upheld on appeal, it is reasonable that the employee is not eligible for wages for the period after reinstatement by the subdistrict court. This is different, of course, if the employee worked during that period.

For more information or advice on this subject please contact Bas Derhaag or Sander Pieroelie.