Employer’s Discretionary Power when Assessing Employee’s Performance

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Supreme Court, 16 February 2018, www.rechtspraak.nl, ECLI:NL:HR:2018:182


An employer who wants to dismiss an employee for dysfunction has a certain amount of freedom to assess whether the employee meets the requirements set for the job. The Judge should investigate on the basis of the facts established whether the employee’s suitability for performing the stipulated work in reasonableness can be assumed.

Since 1990, a company supplying construction products to builders’ merchants employed an employee, initially as a production manager, later as a production and facility manager, and finally as a facility manager. In July 2015, the employer announces that she wants to relocate the employee to another position, in which the function of facility foreman is mentioned.
In November 2015, the employee reports sick, but the occupational physician judges that there is no illness. The advice is to observe a two-week cooling-off period and then to look for a solution to the problem in discussions, guided by a mediator. Mediation never took place, however. An application from the employer to dissolve the employment contract, primarily based on dysfunction and, in the alternative, on a disrupted employment relationship, is rejected by the Sub-district Court. But on the employer’s appeal the Court of Appeal terminates the employment contract as per 15 November 2016.
The Court of Appeal states that the employer does not have to prove every single criticism of the functioning, but that the employer has its own discretionary power, which however, should be able to stand up to scrutiny on its reasonableness.

In cassation the employee opposes this view of the Court of Appeal. He argues that the Court of Appeal has not properly applied the statutory rules of the law of evidence and raises the point of reference against which the Court should assess whether dysfunction exists or not.
The Supreme Court refers to an earlier judgment, in which it had ruled that the basic principle is that the statutory rules of evidence are applicable mutatis mutandis in proceedings concerning the dissolution of an employment contract, with the exception of the case in which the Court sees a reason to rule in an earlier (conditional) dissolution procedure than in simultaneously lodged proceedings to determine the validity of the dismissal. According to the Supreme Court, however, the applicability of the statutory rules of evidence should be distinguished from the question of whether the criteria for dismissal were met. Based on the Explanatory Memorandum accompanying the Work and Social Security Act, the Supreme Court states that an employer has the discretionary power to assess or to resign not only in the case of a dismissal on economic grounds but also in any other dismissals, with the exception of a dismissal due to long-term labour incapacity. The only reason for a Sub-district Court not to proceed to dissolution of an employment contract is when it is clear that an employer has not reasonably been able to decide for dismissal on the arguments put forward, or in case the employer also shares part of the blame. The applicability of the statutory rules of the law of evidence does not require that the facts and circumstances for the dismissal should be empirically and unambiguously established, but nevertheless they do have to be considered plausible. Based on the thus established facts, according to the Supreme Court, the Court should assess whether the employer could in reasonableness assume that the reason used for the dismissal, in this case the dysfunction, applied.

Since this was the criterion the Court of Appeal had applied, the Supreme Court rejects the employee’s request to annul the judgment of the Court of Appeal.


The fact that the employer has a certain discretionary power to assess whether there is a ground for dismissal, other than dismissal due to long-term labour incapacity, was indeed the legislator’s intention. Now that the Supreme Court has explicitly recognized this discretionary power in its judgment, it enables employers to more forcefully rely on it if they ask the Sub-district Court to dissolve an employee's employment contract.

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