When an employer and employee sign an employment contract, both are bound by this contract, including the terms and conditions of employment. So what happens when an employer wants to change the employment conditions that were agreed?
Can an employer change employment conditions?
Under Dutch employment law, an employer can always change employment conditions in consultation with the employee (with the employee’s consent). In addition, an employer can also sometimes change the employment conditions unilaterally (without the employee’s agreement).
In this article, we will describe three situations in which an employer can unilaterally change the employment conditions, and explain what each situation means for the employee’s rights.
Unilateral changes in a fixed-term employment contract
When a fixed-term contract (an employment contract with an end date) is about to end, the employer can offer the employee a new contract with altered or new employment conditions. At this point, the employee has the right to choose whether or not to accept the new contract and its terms.
If the employee chooses to accept the new employment contract, then the new employment conditions will apply to them. If the employee chooses not to accept the new contract, then the changed employment conditions will not apply to them for the remainder of their existing contract.
Unilateral changes clause in an existing employment contract
If the employment contract, whether fixed-term or permanent, contains a unilateral changes clause, then the employer has the right to unilaterally change the employment conditions and these conditions will apply to the employee.
However, it is important to note that the employer may only do this if they have an overriding business interest that takes priority over the interests of the employee, and is in accordance with the standards of reasonableness and fairness.
Even so, the employer is obliged to first try to reach an agreement with the employee about the change of employment conditions. If no agreement can be reached, then the employer can unilaterally change the terms of employment. In this case, the interests of both parties will be weighed against each other.
No unilateral changes clause in existing employment contract
If the employment contract does not contain a unilateral changes clause and the employer wants to change the employment conditions, then the employee can decide not to accept the changed terms of employment – but this is not always allowed.
If the employer’s proposition is reasonable, then the employee must accept the changed terms and conditions. To decide whether the employer’s proposition is reasonable and acceptance can reasonably be required of the employee, the courts can weigh the interests of both parties against each other.
Example: company lease car
A clear example of changing an employment condition would be when an employer decides to stop giving their employees a lease car.
In a recent case, the employer (a bank) unilaterally changed a term of employment when they decided to stop granting lease cars to their employees. However, the employees didn’t agree with this change and went to court to ask that it be undone.
The judge first determined that being granted a lease car is a term of employment. Secondly, he explained in which instances such a term can unilaterally be changed by the employer. The bank had included a unilateral change clause in their employment contracts. The judge therefore had to determine if an overriding business interest existed which would take priority over maintaining the employee’s terms and conditions of employment, in accordance with the standards of reasonableness and fairness.
After weighing the interests of the bank against those of the employees, the judge decided that the bank had no overriding business interest that justified changing the terms of employment unilaterally. On that basis, the employees did not have to accept the loss of their lease car. The judge added that this also applied to the employees that didn’t have a unilateral change clause in their employment contract.
What to do if your employer changes your employment conditions
If your employer changes your employment conditions and you feel the changes are unreasonable, then you would be wise to seek legal advice.
Whether the change affects your company lease car or a proposed salary cut, an expert in employment law can help you to understand your rights and advise you on the best course of action.
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Godelijn experienced an international upbringing and education as an expat child living in Africa and England. Back in The Netherlands, she studied law at the University of Utrecht (1990). She then embarked on her legal career as a lawyer by working 10 years for the well-known law firm of ‘Wladimiroff en Spong Advocaten’. In 2000 she joined GMW lawyers as a partner and is the head of the Labour law and Pension section.
Godelijn specialises in international employment law and has extensive experience in dealing with both non-contentious and contentious international employment matters including (collective) redundancy packages and dismissal. She works for both companies and individual employees, enabling her to keep an open mind to both sides of a case. Naturally she helps her clients when a problem has arisen, but prefers to act before an escalation has taken place. Advice on a fair Human Resource policy is an essential part of her work.
Godelijn Boonman is considered to be the undoubted employment specialist for the expat community because she is bilingual, has a large international clientele and a wealth of experience in international employment law matters. She is therefore frequently asked to be the key note speaker at international seminars.
Godelijn has a keen interest in the international community and has been a member of the advisory board of ACCESS and the Women’s Business Initiative International since its beginning.