Dissolution of Employment Contract due to Default of already Summarily Dismissed Employee

An employee was summarily dismissed. In violation of the prohibition to carry out ancillary activities, he not only had a second full-time employment contract but two additional employment contracts as well. The Sub-district Court retroactively dissolved the employment contract that had already been terminated due to default, so that the employee had to repay part of the wages received.
Since 2017, an employee had worked at a housing corporation under a full-time employment contract of 36 hours a week. The applicable CLA established that an employee needs prior written permission to carry out ancillary activities. The employer had given permission for ancillary activities as an athletics trainer and as a personal trainer. As of 1 June 2019, the employee entered into an employment contract with another housing corporation for 32 hours a week, be it without terminating the employment contract with the employer. On October 4, 2019, the employee reported sick.
On April 14, 2020, the employee nevertheless, started working as a self-employed person with a third housing corporation for 8 hours a week.
As of June 1, 2020, he was even employed by this housing corporation for 36 hours a week. Thus, the employee had three contemporaneous employment contracts at the time, for respectively 36 + 32 + 36 hours = 104 hours per week. The applicable CLA for all these employment contracts stipulated that the agreed work should be carried out between 07:00 a.m. and 19:00 p.m. on Monday to Friday and between 07:00 a.m. and 21:00 p.m. on one d ay per week.
A message from the Pension Fund made the employer aware of the existence of the other employment contracts. It resulted in a summary dismissal on July 20, 2020.
The employee contested this dismissal, invoking the right to free choice of employment.
He argued that he had always performed well and drew attention to the fact that, as a lone parent, he had the financial care of his children. The summary dismissal was upheld, however, both before the Sub-district Court and on appeal to the Court of Appeal.
The Sub-district Court and the Court of Appeal pointed out that the employee needed permission for the ancillary activities and that he should also have notified the occupational physician of his ancillary activities. They also pointed at the obligations under the Working Hours Act and the interest they reflect in the employee’s recovery.
Subsequently, the employer claimed before the Sub-district Court to dissolve the already terminated employment contract due to default, with retroactive effect from the moment of the default. This dissolution should result in repayment of the wages over a number of periods.
The Sub-district Court deduced from a judgment of the Supreme Court in 1980, that an employment contract that has already been terminated can also be dissolved due to default. The fact that, in that case, it concerned a claim that was conditionally brought before the Court, namely in the event that it should be established that the employment contract had not yet been terminated, was irrelevant, according to the Sub-district Court, because the Supreme Court, following the conclusion of the Advocate General of the Supreme Court, had ruled in a general sense that termination of an employment contract does not preclude its dissolution with retroactive effect.
The Sub-district Court then pointed out that, according to a judgment of the Supreme Court, dissolution of an employment contract due to default is only possible if the default is of such a nature that it justifies the profound consequences of dissolution of an employment contract with retroactive effect. The protective effect of employment law entails that the employer must be able to demonstrate that the employee structurally or seriously failed to meet his obligations under the employment contract. According to the Supreme Court, it can be put on a par with termination of an employment contract for an urgent reason.
The Sub-district Court considered that the decision of the Court of Appeal, ruling that the summary dismissal had been legally valid and that there had been seriously culpable conduct on the part of the employee, had become res judicata, because the period for lodging an appeal in cassation with the Supreme Court had expired. According to the Sub-district Court, this meant that the employee had structurally and seriously failed to comply with the employment contract. The Sub-district Court, therefore, dissolved the employment contract due to default.
The dissolution of the employment contract created obligations for both parties to undo the work performed on the basis of the employment contract. Of course, the employee can repay the wages received, but it is not possible to retroactively reverse the employee's work performance. That is why the Sub-district Court assessed whether and to what extent the employee's work had been of no value for the employer in the different periods. Although the Sub-district Court considered it clear that contemporaneously performing two near full-time employment contracts cannot but have consequences for the quality of the employee's work and for the employee's employability, it had not been demonstrated, according to the Sub-district Court, that the employee's work during the first period, in which there were two employment contracts, had been of no value for the employer. Therefore, the employee did not have to repay the wages over that period. From the moment he had reported sick, however, there had no longer been any work performance. According to the Sub-district Court, the employee would have to repay the wages as of that particular moment.

The law provides for the possibility of dissolving an employment contract due to default, but in practice this ground is very rarely invoked. The reason is that high requirements are set for an appeal to dissolution due to default, in order to prevent interference with the protective effect of the dismissal law. The very exceptional nature of the above case must have contributed to the fact that a successful appeal was made for dissolution of the employment contract due to default.
Of course, the importance of the dissolution due to default, after the employee had already been successfully summarily dismissed, lies above all in the retroactive effect of the dissolution and the resulting ability to reclaim wages that had been paid prior to the summary dismissal. It should also be noted that the Sub-district Court clearly dissolved the employment contract, but failed to indicate the effective date, where it should have.
In a contemporaneous procedure (Sub-district Court of The Hague, 15 March 2023, ECLI:NL:RBDHA:2023:4727), the second employer has also claimed dissolution due to default. The Sub-district Court dissolved that employment contract with retroactive effect from 1 June 2019, being the date on which the employment contract had been entered into, and ordered the employee to repay the wages as of 4 November 2019, being the date when he reported sick to the second employer.
On balance, the employee will thus have the following left over from the wages:
• the wages with the first employer until reporting sick on 4 October 2019;
• the wages with the second employer from the start of the employment on 1 June 2019 until reporting sick on 4 November 2019;
• the income as a self-employed person with the third employer for 8 hours a week from April 14, 2020 to June 1, 2020; and
• the wages with the third employer as of 1 June 2020.
There is reason to fear for the employee, however, that there will also be consequences regarding the employment contracts with the third employer.