Changing terms and conditions of employment: general
An employer can change terms and conditions of employment in several ways. The starting point is that agreements made must be honored. Therefore, changing a term or condition of employment (to the detriment of the employee) is in principle only possible with the consent of the employee, in which case the employee’s consent should not be readily assumed.
There are a number of exceptions to the above principle:
- Changes may be made without the employee’s consent through an applicable collective bargaining agreement.
- An employer can implement changes (unilaterally) if a written unilateral changes clause has been agreed upon and the employer has such a substantial interest in the change that this interest outweighs the interests of the employee in accordance with the standards of reasonableness and fairness. Please refer to our prior website post.
- An employer may (unilaterally) change a term and conditions of employment – without a written unilateral changes clause – if there are changed circumstances, the employer has made a reasonable proposal and this proposal cannot reasonably refused by the employee (Section 7:611 DCC – the Stoof/Mammoet-test).
- Due to circumstances, it may be the case that claiming performance by the employee from the employer of the agreed terms and conditions of employment has become unacceptable by the standards of reasonableness and fairness (Section 6:248 DCC).
- There may be unforeseen circumstances of such a nature that the employee cannot expect the employer to continue the terms and conditions of employment unchanged (Section 6:258 DCC).
We note that the unilateral change of terms and conditions of employment is not easy in practice. The employer must be able to properly substantiate its interest in changing the terms and conditions of employment. In assessing whether a unilateral change in terms and conditions of employment was permitted under the given circumstances, a court will always also consider the (harmed) interests of the employee.
Change of terms and conditions of employment under Section 7:611 DCC (Stoof/Mammoet-test)
If an employee does not provide their consent to a proposal from the employer to change the terms and conditions of employment and no written unilateral changes clause has been agreed upon, it should be examined whether the employer can unilaterally change the term and conditions of employment by invoking Section 7:611 DCC (the general standard of good employment practices). The conditions to be met in that context have been developed in case law. The Supreme Court’s judgment of July 11, 2008, Stoof/Mammoet, is relevant. In this judgment it is stipulated that, for the change of an employment term and condition pursuant to Section 7:611 DCC, it must first be examined whether the employer has acted as a good employer in the given circumstances and whether the change made by it is reasonable. In this regard, all circumstances of the case must be considered, including: (i) the nature of the changed circumstances given rise to the proposal, (ii) the nature and extent of the proposal made, and (iii) the position of the employee(s) concerned and their interest in the terms and conditions of employment remaining unchanged.
It should then be considered whether: (i) the proposal of the employer is reasonable, (ii) the proposal relates to changed circumstances, and (iii) the acceptance of the proposal can reasonably be expected from the employee. In literature this test is also referred to as the triple reasonableness test or the ‘Stoof/Mammoet-test’.
In (lower) case law and literature, the position was sometimes taken that Section 7:611 DCC is only intended for the unilateral change of individual terms and conditions of employment. Section 7:613 DCC would rather refer to the change of collective terms and conditions of employment.
Judgment Supreme Court dated 25 November 2022
In its judgment of November 25, 2022 (IFF-judgment), the Supreme Court answered the question whether the Stoof/Mammoet-test can only be applied to individual changes of terms and conditions of employment or whether Section 7:611 DCC also applies to collective changes of terms and conditions of employment. According to the Supreme Court, the Stoof/Mammoet-test applies to all proposals to change terms and conditions of employment, regardless of whether they are (predominantly) individual or collective of nature.
In addition, the Supreme Court clarified how strict the Stoof/Mammoet-test is. It was assumed by some judges and authors “that an employee only acts in breach of the obligation to act as a good employee (Section 7:611 DCC) in response to a reasonable proposal from the employer if the rejection of that proposal would be unacceptable by the standards of reasonableness and fairness”. The Supreme Court ruled that this is too strict a standard. It therefore appears that the Stoof/Mammoet-test appears to be less strict than whether it is unacceptable by the standards of reasonableness and fairness for the employee to reject the proposal.
It is now clear that the Stoof/Mammoet-test pursuant to Section 7:611 DCC, applies to both individual and collective changes to terms and conditions of employment. Furthermore, the standard to be applied to assess whether an employee must agree to a proposal by the employer appears to be less strict than previously assumed in case law and literature. Although the unilateral change of terms and conditions of employment is still complex, the IFF-judgment seems to give employers a little more room for unilateral changes of terms and conditions of employment.
If you would like to discuss this further, please contact us. We will of course be happy to assist you.