Thematic feature - individual labour/employment disputes and the courts

This article examines how individual labour/employment disputes are handled through the courts in the Netherlands, as at March 2004.

In March 2004, the EIRO national centres in 24 European countries were asked, in response to a questionnaire, to give a brief overview of their country's system for dealing with individual labour/employment disputes through the courts, along with data on: the volume of cases; the costs; the timeframe; alternatives to going to court; and any current debate on these issues. The Dutch responses are set out below (along with the questions asked).

System

Please give a brief description of how disputes concerning individual employees' employment and labour rights are handled in your country by courts, tribunals or other official judicial bodies.

Disputes on individual employees’ employment and labour rights are handled in the normal courts, and there are no special labour courts. Cases are brought to the district court (rechtbank). Appeals can be made to the court of second instance (Gerechtshof) and finally to the Supreme Court (Hoge Raad). The Supreme Court assesses only procedures or incorrect implementation of the law by lower courts. Only professional judges make up the courts at all levels, and there are no social partner representatives.

There is one important exception to this general rule. Dutch dismissals law is governed by a 'dual system', involving procedures based on both administrative and civil law. First, an employer in the private sector wishing unilaterally to terminate an open-ended employment contract requires prior permission from a public administrative body, currently the Centre for Work and Income (Centrum voor Werk en Inkomen, CWI). This procedure was introduced during the Second World War, on the basis of a special government decree, as an instrument of labour market policy and has since evolved into a preventative check to determine the reasonableness of any intended dismissal (NL0311103T and NL9909160F). If the intended dismissal is not sufficiently founded on reasonable grounds, the employer is denied a permit to dismiss; if dismissal nonetheless follows, the employee then has legal grounds upon which to contest the validity of the dismissal.

Additionally, in the 1970s a second route to termination of contract emerged: an employer can request the relevant (normal) court to dissolve an employment contract under the provisions of Article 7:685 of the Civil Code (referring to 'compelling grounds' or 'changed circumstances'). The court then checks the validity of the request and, if the contract is dissolved, the court usually imposes compensation to be paid by the employer. Use of this method increased greatly in the 1990s and, in 2002, as many as 68,331 requests for dissolution were submitted to the courts, while 70,925 requests for dismissal permits were submitted to the CWI.

In cases of alleged discrimination, there is also an alternative route. Employees (but also works councils, for example) can lodge a complaint with the Commission for Equal Treatment (Commissie Gelijke Behandeling, CGB). However, employees can also go straight to court.

In case of a conflict over working conditions, the employee (or the works council) has the right to call in the Labour Inspectorate (Arbeidsinspectie), which can apply various types of sanctions, including stoppages of work and fines.

Social security arrangements are not covered by the Civil Code, but by separate laws: the Law on Unemployment (Werkloosheidswet, WW); the Law on Occupational Disability (Wet op de arbeidsongeschiktheid, WAO); and the Law on Sickness (Ziektewet, WW). Disputes in these areas are dealt with by the district courts (like most issues that are related to the employment contract - see above). Appeals, however, are lodged at the Central Council for Appeal (Centrale Raad van Beroep, CRvB). A ruling by this Council can be overruled by the Supreme Court, but not for material reasons. Again, social partner representatives are not judges in these courts. In cases relating to unemployment benefits, there is in fact no conflict between employer and employee, but between employee and the relevant social security organisation. The same was true in the cases of sickness or disability, but this has to a certain extent changed due to 'privatisation' of these areas and new legislation aimed at enhancing the responsibility of both employer and employee to continue the employment relationship as far as possible.

Returning to the system for dealing with most individual employment/labour disputes, the issues over which cases may be brought are manifold and include the status and content of the employment relationship, pay, working hours (including leave), working conditions, discrimination, (part of) social security, dismissal, competition clauses, use of the internet and e-mail, redundancy payments, 'whistle-blowing', notice periods, pensions and probation periods. In fact, it is hard to identify a subject (apart from those specified above) that is excluded.

Trade unions are only involved in individual disputes when these stem from collective agreements, eg on pay or working hours. If an employer breaches certain parts of a collective agreement, unions have the right to go to court with the aim of enforcing the agreement. In some cases, unions have successfully claimed a role as an interested party, even if they were not party to a collective agreement relevant to the case. Apart from this, unions and their federations have established juridical service centres to assist their members in the event of individual disputes (especially dismissal), but the status of these services is no different from that of other (commercial) lawyers.

The sanctions the courts can apply in individual employment/labour cases depend on the nature of the dispute and the demands of the parties involved. After a dismissal, reinstatement, though possible, is uncommon. The award of damages is the usual sanction. In conflicts over pay, the sanction might be that the employer has to pay the deficit, plus an extra amount. The award of damages is also a common sanction in most other cases. Examples include (sexual) harassment, all kinds of discrimination and disability of the employee.

In some cases, the sanction is directed towards the employee. The most common sanction here is dismissal eg for theft, gross negligence in the performance of duties, or gross misuse of telephone, e-mail or internet facilities.

According to the Law on the Adaptation of Working Hours (Wet aanpassing arbeidsduur, WAA), employees have the right to ask the employer to lengthen or shorten their working time (NL0012118F). In principle, the employer has to grant the request of the employee, except when there are sufficient organisational or financial reasons to refuse. Sometimes, in the event of a refusal, the employee may start a court case, up to now with mixed results.

In conflicts over competition clauses in employment contracts, the clauses might be mitigated or declared void. In case of an unjustified breach of a competition clause, the employee might be obliged to pay damages to the employer.

A special type of conflict that recently has attracted a lot of attention among lawyers is over the possibility for employers unilaterally to change the employment contract. According to section 7:613 of the Civil Code, this is allowed only when there are sufficient grounds to do so. The Supreme Court, however, has ruled that on the basis of 'being a good employee', an employee has to honour reasonable proposals put forward by the employer.

Most of the above applies to employees but not to civil servants. The main reason is that civil servant are covered by a different body of law. However, in practice, civil servants to a large extend have comparable rights.

Number of cases/disputes and court

How many cases have been dealt with in your legal system by each category of court? Where possible, please provide statistics on the number of disputes in your country each year from 1990 to 2003 (or the latest year for which data are available). Where possible, please provide statistics on costs.

Information is provided in table below on the number of requests for dissolution of employment contract submitted to the courts, and requests for dismissal permits submitted to the CWI (see above under 'System'). There are no statistics on other types of individual employment/labour disputes, nor on the costs of the proceedings.

Dismissal cases brought, 1998-2003
Channel 1998 1999 2000 2001 2002 2003 (first three quarters)
Request to court for dissolution of employment contract 40,106 31,277 34,434 45,629 68,331 59,280
Request to CWI for dismissal permit 39,614 46,745 43,584 54,376 70,925 59,580

Litigation timeframe

Where possible, please provide statistics on the timeframe within which court cases over individual labour/employment disputes are settled.

No information is available on how quickly individual disputes are settled.

Other means of resolving individual disputes

Is there any kind of legal mechanism forcing or encouraging the two parties (management and employees) to resolve a dispute by prior negotiation? Where there is such a mediation process foreseen, please give details. Is there any evidence that mediation has had an effect on the volume of claims handled by courts? Are there any corporate policies built into the structure of organisations in your country specifically to deal with disputes? How are the employees’ representative bodies involved in the process?

There is no legal mechanism to enforce resolution of individual employment/labour disputes by prior negotiation, but there is a chance that a court will refuse to give a verdict because parties have not done enough to solve the problem by themselves. Also, in many cases concerning termination of the employment contract, a court case might be started but not result in a court decision because negotiations between employer and employee (conducted by their respective attorneys) have resulted in an agreement.

It is not uncommon, mainly in larger organisations, for there to be internal grievance procedures. Employees are supposed to make use of this procedure before going to court (no figures are available on the extent to which this occurs). It is not permitted for such procedures to forbid parties to go to court, however.

Works councils might play a role in solving individual disputes, but the extent to which this occurs is not known.

Debate

Please summarise any current debate on the issue of employment/labour disputes litigated by courts in your country.

There has long been a recurrent debate on dismissals legislation, focusing on the abolition of the current requirement for prior permission for dismissals. On 15 July 2003, employers’ organisations and trade union federations represented on the bipartite Labour Foundation (Stichting van de Arbeid, STAR), rejected the most recent proposal to abolish the existing system (NL0308104F).

In general, however, the present system of individual dispute settlement is not a major issue for unions or employers.

The main difference of opinion at present concerns severance payments (NL0311103T). When the employment contract is terminated by the court (see above under 'System'), the rule is that employees receive a sum of money linked to their length of service, their age and their pay (the so-called 'cantonal court judges formula'). The court can increase or decrease the severance payment by applying a 'correction factor'. When the court judges that the employer (or employee) is to blame for the termination, the payment is increased (or diminished). If no one is to blame, the correction factor is neutral. Employer’s representatives strongly disagree with this automatic system.

There is no recent legislation, nor any proposals for forthcoming legislation, on individual employment/labour disputes as such. However, a recent law (the so-called 'gatekeeper law') that obliges both employers and employees to do their utmost to avoid the latter claiming (total) disability benefits, and to find other forms of work for the employee, might give rise to many court cases on this subject.

Courts have not played a major role in the formation of employment legislation. Where the law is not very specific, however, court rulings might change the state of affairs. The most important example is arguably a shift in the division of risk between employer and employee in the event of accidents resulting in the (partial) disability of the employee. Over the years, the Supreme Court has gradually increased the responsibility of the employer for the health of employees.

Interest in 'alternative' dispute resolution (ADR) seems to be growing, to judge from publications, announcements of seminars and interviews. There do not, however, appear to be any statistics on the extent of such procedures. According to the proponents of ADR, one of its major advantages is a decrease in the workload of the courts. (Robbert van het Kaar, HSI)

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