Unilateral amendment of employment conditions
Category: Employment law
In times of economic difficulty, employers are more keen on flexible employment conditions which conditions sometimes require amendment.
Under Dutch employment law the unilateral amendment of principal employment conditions (wages, working hours etc.) by the employer is in general only possible under restricted conditions. In general, a principal employment condition can only be amended after consultation and consent by the employee.
Unilateral amendment of principal employment conditions is only possible in case continuation of the employment condition will lead to unacceptable consequences based on the principle of reasonableness and fairness (Article 6:248, section 2, Dutch Civil Code).
Change of employment conditions; unilateral amendment clause
First it must be established if the employer has included a unilateral amendment clause in the employment agreement, based on article 7:613 Dutch Civil Code. Is this the case, then the employer can only amend the employment condition unilaterally based on a “substantial interest” that outweighs the interest of the employees, such as business economic reasons. This is not easily accepted by the court and this is mostly applicable to collective employment conditions.
No unilateral amendment clause
In case a unilateral amendment clause is not included in the employment agreement, the court will assess the case on the principle of good employer/good employee practices, based on article 7:611 Dutch Civil Code. Based on this principle it must be determined whether the employer, acting as a good employer, has valid reasons to propose an amendment of the employment condition. It must be established whether this proposal, taking into consideration all relevant circumstances of the case, is considered reasonable. The interest of the employer must outweigh the interest of the employee. Next, it must be determined whether the employee, acting as a good employee, can, in the light of these relevant circumstances, be expected to accept the unilateral amendment. From case law it follows that the employee must accept reasonable proposals by the employer.
In short the following questions must be answered:
- Are their changed or unforeseen circumstances that justify amendment of the employment condition?
- Is there an unilateral amendment clause?
- Does it concern principal or secondary employment conditions?
- Is the proposed amendment reasonable in the light of the all circumstances of the case?
- Can it reasonably be required from be employee to accept the proposal of amendment?
In case the employer continues unilateral amendment of the employment condition without the consent of the employee, the employee could start legal proceedings to claim continuation of the current employment condition.
Sometimes it can be expected from the employer to apply a phase-out scheme. Also, prior consent of a works council with the amendment of secondary employment conditions (if applicable) may be required.
Further information regarding change of employment conditions
For further information with regard to unilateral amendment of employment conditions, or change of employment conditions in general, please contact: