Has employment termination become easier in 2020 due to the i-ground?
As of 1 January 2020, a new ground for termination has been added to the existing grounds for termination under Section 7:669 (3) of the Dutch Civil Code.
Has it become easier for employers to terminate employment agreements under this so-called i-ground?
What is the i-ground?
Previously, termination of an employment agreement was only possible if all conditions of one ground for termination were met. The i-ground, also referred to as the accumulation ground, ensures that two or more grounds for termination can be combined by employers.
An employer who cannot fully base his termination request on the circumstances of a single ground, may be able to substantiate this with circumstances from several grounds for termination together (c - h grounds). For example, an employee's lack of performance could be combined with a disturbed working relationship. The i-ground therefore increases the possibilities for an employer to terminate an employment contract.
A judge will assess whether the combined grounds for termination causes a situation whereby the employer cannot reasonably be required to continue the employment relationship. To substantiate this, the employer must have a properly maintained employee file of the combined grounds for termination and the employer must have fulfilled his reinstatement obligations. The a-ground (business economic reasons) and the b-ground (long-term disability) cannot be combined with another ground for termination.
If the employment contract is dissolved on the i-ground, the court may grant the employee an additional compensation on top of the transition fee. The extra compensation amounts to a maximum of 50% of the transition fee. It serves as compensation for a termination that is based on several unfulfilled grounds.
So far, all requests for dissolution on the basis of the cumulation ground have been rejected. In two recent rulings employers had both failed to substantiate the existence of the i-ground separately. The courts ruled that it is not up to them to assemble the relevant circumstances and to independently assess whether there is sufficient ground for termination on the i-ground. It is therefore important to substantiate the cumulation ground separately.
In addition, it seems that at least one of the combined grounds for termination must be nearly met. Two semi-fulfilled grounds for termination appear to be insufficient for granting the dissolution of the employment contract on the i-ground. However, how this exactly works out will need to be further developed in case law.
How do you apply these rules in practice in the event of termination?
It is important to justify the cumulation ground separately and to not just refer to the other grounds for termination. Moreover, it is important to argue why (at least) one of the combined grounds for termination is almost fulfilled.
For now, the chances to get an employment contract terminated do not seem to have increased substantially as a result of the introduction of the i-ground.
Loyens & Loeff will continue to closely monitor the developments with regard to the cumulation ground. For questions regarding the termination of an employment contract (either on the basis of the i-ground or otherwise) , the specialists of our Employment & Benefits Team are happy to provide you with advice.