Employer Obliged to Pay Compensation for Failure to Comply with Notice Requirement in Writing

The Sub-district Court ordered an employer to compensate a retired employee for missed additional days of paid leave the employee had been entitled to because of her age. The employer owed this compensation because the employee had not been informed in writing of the existence of the provision giving entitlement to the additional leave days.

An employee, born in 1954, worked for an insurance company as a professional liability lawyer. When the insurance company moved from Amsterdam to Rijswijk, the employee resigned as of 1 May 2008 because of the increased travel distance.
It was her intention to start working with a law firm, but her first experiences were so bad that, after a short period, she accepted an offer from the insurance company to resume work there again. It was then agreed that she would start working on the basis of the actual number of hours worked at an hourly rate of EUR 45.37, including a thirteenth month, the holiday allowance and contribution to the pension scheme. Until 2013, the employee worked approximately 16 hours a week. From 2013, after she had moved, the number of working hours increased to around 24 hours a week.
As of 2009, the applicable CLA for the insurance industry contained an provision for older employees entitling them to a number of additional days of paid leave after having reached a defined age. In 2020, two years after she had retired, the employee claimed compensation of 558.32 hours on this basis. The insurance company refused to pay it and pointed to the agreement made for an all-inclusive settlement.
When the Sub-district Court had to rule on the case, the insurance company defended itself by first stating that there was no employment contract but an assignment agreement. The Sub-district Court rejected his argument, however. True, the amount of the hourly wage and the option to take up more leave hours than provided for in the CLA were certainly indications of the absence of an employment contract but, since in 2017 the insurance company had explicitly declared that there was an employment contract and since the wages were paid out as "salary" and since the wage tax and employee insurance premiums were withheld, there was an employment contract, according to the Sub-district Court.
Furthermore, the insurance company had claimed that the CLA had been a standard-CLA, which couldn’t be deviated from in favour of the employee but, since the insurance company had attached no legal consequences to this claim, there was no need for the Sub-district Court to assess it.
The Sub-district Court rejected the argument that the provision for older employees did not apply due to the all-inclusive nature of the hourly rate, simply because the provision for older employees did not yet exist when the agreement on the hourly rate was made.
The employee had claimed compensation because the employer had failed to inform her in writing about the applicable CLA. The Sub-district Court was of the opinion that it was sufficient that the employer had pointed it out when they entered into the first employment contract, but it confirmed that the employer should have informed the employee when the provision for older employees became effective in 2009. The provision for older employees was an essential condition of employment. From the fact that no employee of the insurance company had made use of the provision for older employees, the Sub-district Court drew the conclusion that the mere posting of the applied CLA on the insurance company’s intranet was not sufficient. Since, however, the employee was an experienced lawyer, she could have been expected to have explored her terms of employment and to have obtained information in case of doubt. The Sub-district Court considered this the employee's own fault and therefore reduced the compensation that the insurance company would have to pay by 40%.
The employee had also requested compensation for holidays as of 2008.
Extensively referring to case law of the Court of Justice of the European Union (which is relevant because the European Working Time Directive prescribes paid annual leave of at least four weeks), the Sub-district Court also granted compensation for the statutory holidays that had not been taken since 2008. The annual four-week statutory holiday cannot be included in an all-inclusive agreement and the Sub-district Court also deduced from case law of the European Court that this holiday cannot expire. The claimed compensation for leave days in excess of the statutory entitlement was rejected on the basis of the all-inclusive settlement made. In addition, the Sub-district Court pointed out that the employee had never asked for any leave days before.

Under the law, the employer is required to provide the employee with a written statement of a number of characteristics of the employment contract. For most of the information, with the exception of the statement regarding the applicable CLA, this requirement is considered to have been met if it is specified in the employment contract. If the statutory requirement to report it in writing is not met, the employer is obliged to pay compensation.
An appeal to this compensation obligation is quite exceptional.
The judgment of the Sub-district Court is interesting because the employer's general notice requirement will be expanded as of 1 August 2022. It is the result of the entry into force of a European Directive. Meanwhile, the bill that is intended to match the Dutch legislation with this Directive has been adopted by the House of Representatives. The bill not only expands the number of characteristics of the employment contract that should be noticed, but it also tightens the conditions this notice should meet. There are more characteristics for which specification in the employment contract will not be sufficient. In particular, further requirements are set for the way in which the notice should be submitted. Posting it on the intranet will therefore no longer be sufficient. It can be expected that employers who fail to comply with this extended and tighter notice requirements may more frequently experience claims for damages based thereon in the future.