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Employers Must End Dormant Employment

Precedential Decision by Judiciary or Regulatory Agency

Author: Eric van Dam, Partner - Littler Netherlands

On November 8, 2019, the Dutch Supreme Court issued a ruling on dormant employment relationships. The Supreme Court indicated that, because of the “good employer” principle, an employer must cooperate with an employee’s proposal to end his or her employment contract by amicable arrangement, with the employee being awarded a sum equivalent to the transition payment. The Supreme Court held that there was no need, when determining the amount of this payment, to link up with the compensation scheme for dismissal due to long-term employment capacity (Compensatieregeling bij ontslag wegens langdurige arbeidsongeschiktheid). However, the payment need not be any more than the transition payment that would have been due on termination of the employment contract on the day after the date when the employer could have terminated the employment contract because of the employee’s employment incapacity. The employer is not obliged to cooperate with the employee’s request if the employer has a justified interest in keeping the employment contract in force. One possible situation for this would be realistic prospects of reintegration for the employee.