Employment Update, The Netherlands - June 2007

28 June 2007

Philip Hartman

New Legislation

As of 1 May 2007, the need for employers to obtain a work permit for nationals of a number of Eastern European countries, has been abolished.

Case Update

An employee was awarded severance to the amount of €175,000 when his commuting time/distance substantially increased as a consequence of a TUPE transaction involving a change of work location.

A lower court recently ruled (in summary proceedings) that the dismissal of an individual as board member (bestuurder) of a Dutch limited liability company did not automatically result in a termination of his employment. This is because the individual's role as board member was limited to certain minor formal activities, whilst the majority of his time was spent performing his duties as an employee (which he had already performed prior to his appointment as a board member). Board membership was a mere ancillary aspect of his employment. The Supreme Court earlier ruled that board membership and employment cannot be separated from one another and took the position that termination of board membership automatically results in termination of the employment contract (unless the employee was sick or in case the parties agreed on a continuation of employment). Neither of these exceptions applied in the case before the lower court. It is therefore doubtful whether the lower court's ruling will set a precedent for a new development in Dutch law.

Authors

Philip Hartman

Partner
Netherlands

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