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Dismissal of a managing director

2009 May 19

Anonymous v. Unidek Volumebouw

Court: Netherlands Supreme Court

Date: April 15th, 2005

LJN number: AS2030

Case: At March 25th 1999, at a shareholders' meeting of Unidek, it was decided to remove the managing director from his position (also known as a 'corporate law dismissal'). The managing director was present at the shareholder's meeting, he accepted the corporate law dismissal, went home, went ill and sent a notification to Unidek that his condition required him to take sick leave. Under Dutch statutory law it is not possible to give notice to termiate an employment contract during sick leave and formal notice had not been given. Hence, the managing director upheld that he was still employed by the company and where Unidek did not pay further wages he decided to file a claim in summary proceedings. Later, when the managing director had recovered, Unidek sent notice and conditionally terminated the contract as from February 27th, 2000 on condition that the employement contract had not ended beforehand. Before the Court, the managing director claimed compensation for unfair dismissal under Article 7:681 of the Dutch Civil Code. Unidek asserted that the period of prescription for such claims is 6 months and argued that the claim was filed after the appropriate time has elapsed. The dismissed managing director argued in vain that the claim had been brought in time, alleging that the employment contract ended in 2000 and not with the decision of March 25th 1999. The Court and the Court of Appeal followed the argument of Unidek and dismissed the claim, reason for the ex-managing director to appeal to the Supreme Court.

Held: The Supreme Court confirmed the decision of the Court of Appeal, formulating a general rule regarding the dismissal of general managers. A corporate law dismissal generally terminates the managing director’s employment contract, unless there is a statutory prohibition against dismissal (for example, during pregnancy or sick leave) or unless the parties have agreed otherwise.

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