Payment Part of Wage Suspended due to Corona Crisis?

Year of publication

2020


Year of publication

384


Reference

Sub-district Court Amsterdam, May 28, 2020, ECLI:NL:RBAMS:2020:2734


Decision

An employer who, due to the corona crisis, did not have enough money to pay all wages, was not allowed to partially suspend payment of the wages, because the employer had not first discussed it with the employee and because suspension was just a bridge too far.

A restaurant in the centre of Amsterdam, offering Turkish sandwiches, employed a student from Iran who worked for 40 hours per week. His employment contract was about to expire on May 31, 2020 and then he was supposed to return to Iran. Usually, the months of January and February are quiet months for the employer, because you will still find fewer tourists. Since the growth in tourist arrivals usually starts up in March, the employer had contracted several new employees in January, intended to start on 1 March 2020.
Mid-March 2020, however, spurred by public policy measures to deal with the corona crisis, the restaurant had to close its doors.
Since then, the turnover in the form of takeaway sandwiches was limited.
In March 2020, the employer applied for participation in the remuneration costs under the NOW (Emergency Measure for Sustained Employment). Although the employer received this allowance, it was not enough for the employer to pay the wages of all employees for the month of March, because the amount of the allowance is based on the January wages. Since the employer did not have enough other financial resources to pay all salaries, the employer only paid all employees half of the wages in March and April 2020.
In summary proceedings before the Sub-district Court, the employee claimed payment of the remainder of the wages. He pointed out that he was dependent on the wages for his living and that he had an interest in having the wages paid before his return to Iran. Transfer of money from the Netherlands to Iran would be a problem, according to the employee.
The employer acknowledged the existence of the employee's claim before the Sub-district Court, but he argued that the corona crisis and the forced closure had led to acute payment problems for the company.
The Sub-district Court considered it plausible that the employer had found himself in an unforeseen emergency. Therefore, according to the Sub-district Court, the employer had an overriding interest that entailed that employees can be required to suspend certain employment rights, or even to entirely give them up, in consultation with the employer. Nevertheless, the Sub-district Court awarded the employee's salary claim, because the decision to pay 50% of the salary was unilaterally taken and without further consultation and because 50% of the salary would mean an excessive loss of income for the employee.
After consideration of interests, the Sub-district Court decided that, according to standards of reasonableness and fairness, it was impossible to expect that the employee could agree to a several months’ suspension of payment of 50% of his salary, partly because it was not certain when the payment arrears might be reduced.
The Sub-district Court, however, mitigated the employee’s claim for payment of the statutory increase due to a delay in payment to zero and it also rejected payment of the statutory interest, due to the employer’s actual plight. The Sub-district Court added the suggestion to its ruling to come to a (very time-restricted) arrangement for payment of the salary claim.


Comments

Although the employee's wage claim was allocated in a more or less normal way, the Sub-district Court’s summary judgment may lead to the assumption that, in a comparable situation, employers could enforce a change in the working conditions, whereby part of the salary can be paid later or is even cancelled. Based on the Sub-district Court’s considerations, the employer would have to make a proposal to this effect and consult the employees about the proposal first. Next, it would have to be assessed whether the proposal is reasonable, given all circumstances of the case.
In the above case, it looks as if the Sub-district Court in particular finds the amount of the salary that -for the time being- would not be paid unreasonable as well as the uncertainty about the time when payment would actually take place. By invoking a unilateral change clause in the employment contract (or the collective labour agreement) or by relying on good employment practices, changes in the employment conditions may sometimes be enforced, even if the employee does not agree to them. In an emergency, it is even conceivable that this change would affect the amount of the salary, which, after all, is the most important employment condition.



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