Unilateral changes to Employment Contracts
Anonymous v. Mammoet Transport
Court: Netherlands Supreme Court
Date: July 11th, 2008
LJN number: BD1847
Case: A shareholder and managing director of the company sold his shares and enters into an ordinary employment contract with the company. Part of the payment of the purchase price had been made conditional to the proper fulfilment of the obligations under the employment contract. Later, the employer decided to change the tasks and job title of the employee, who refused to accept the changes and stayed home. Thereupon the employer ceased salary payment, after which proceedings were initiated. As a rule, an employer is not permitted unilaterally to change the terms and conditions of an employment contract with an employee. Alteration of any of the terms of employment is subject to the prior consent of the other party. A unilateral change can be effected only in exceptional cases or circumstances. Pursuant to Article 7:611 of the Dutch Civil Code, the employer and the employee are required to act as a 'good employer' and 'good employee'. In an earlier case, the Supreme Court has held that if an employer seeks to change a term in an individual employment contract, it must rely on the principles of good employer's practice and good employee's conduct. Reasonableness and fairness may require employees to consent to the employer’s proposed changes. This had lead to debate and the Supreme Court used this case to clarify the earlier ruling.
Held: On behalf of the employee it was argued that the Court of Appeal had erred, as it should have given the employer the heavy burden of proof that the refusal by the employee was not less than an unacceptable result for the eployer under the rules of reasonableness and fairness. The Supreme Court did not follow the argumentation of the employee and formulated a slightly lighter a two tiers test. First, it should be examined whether the proposed changes are reasonable and based on good employer’s practice, taking into account all relevant circumstances. Subsequently, and only if the proposal is found to be reasonable, it should examine whether the employee can be expected to accept the proposed changes in all reasonableness and fairness. The decision of the Court of Appeal was partially confirmed and sent back to another Court of Appeal for another issue, not discussed in this summary.