The Netherlands: Reassignment Obligation Does Not Require Job Creation

Apart from summary dismissal situations,1 employers in the Netherlands can terminate an employment contract only if (i) they have reasonable grounds for doing so, and (ii) reassigning the employee within a reasonable timeframe is impossible or impractical. In other words, this is a dual requirement. It is therefore up to the employer to offer employees extra training if that would make them suitable for an open vacancy.

Reassignment investigation

The COVID-19 crisis appears to have significantly heightened the importance of reassignment investigations. In particular, the Dutch Employment Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, or UWV) seems to have adopted a more critical stance regarding the efforts employers must make to satisfy its reassignment investigation obligations. The dismissal procedure via the UWV is the mandatory route for dismissal where the employment termination is for economic reasons or long-term (> 2 years) incapacity for work. The economic basis for a job termination was the subject of a court case involving NedTrain and one of its mechanics.

What was this about?

NedTrain wanted to undertake a reorganisation because of the planned arrival of new equipment with new and more advanced technology. Employees were required to have a higher level of vocational education to work with this new equipment. The mechanic in question was educated at an MBO-1 level (assistant training), while NedTrain would only have jobs at levels MBO-2 and above after the reorganisation.

NedTrain then offered the appropriate training courses. The mechanic started the courses but dropped out of them early on. He was given a cognitive capacity test, which indicated he did not meet the requisite MBO-2 level. NedTrain also supported the mechanic over an 18-month period in trying to find him other work, including an outplacement position in the final six months.

After the mechanic could not find any suitable work, NedTrain made him an offer – in line with the redundancy scheme that had been agreed upon with the unions – for termination of his employment contract by way of a settlement agreement. Under this agreement, the mechanic would receive twice the transitional payment. He did not agree to these terms.

The UWV refused permission for dismissal

NedTrain then asked the UWV for permission to cancel the employment contract with the mechanic. The UWV refused permission for dismissal, despite all the efforts NedTrain made to reassign the mechanic. The UWV considered that the reasonable basis for dismissal existed, but also that there was enough work available at NedTrain at the MBO-1 level for the employer to create a job at that level. According to the UWV, the mechanic could then be given a yet-to-be-created position.

Sub-district court: no duty to create a position

NedTrain disagreed with the UWV’s opinion and submitted the matter to the sub-district court, seeking dissolution of the employment contract with the mechanic. The sub-district court likewise disagreed with the UWV’s reasoning. The court relied on the Dutch Supreme Court’s judgment in the “Siep” decision, in which the Court held that an employer’s duty to reassign did not require it to achieve the result of reassignment. The sub-district court judge in the instant case did not consider the circumstances to be any different. The starting point was that, as an employer, NedTrain was at liberty to opt for a particular way of running its business and carrying out its operations, even if that led to a business reorganisation resulting in the loss of jobs. Therefore, the employer could not be required to create a job at the MBO-1 level in order to retain a particular worker.

The sub-district court judge also held that NedTrain had satisfied its duty to reassign by offering various training courses and an outplacement position. It was undisputed that there was a reasonable ground for the job termination. For these reasons, the sub-district court dissolved the mechanic’s employment contract and awarded him the transitional payment.

See Footnotes

​1 In the Netherlands, an employee may be fired on the spot, or summarily dismissed, for certain just cause reasons.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.