The proportionality principle in Dutch employment law

Dutch employment law strongly protects employees against dismissal. However, there are times when a termination is unavoidable. When a company reaches a point of economic deficiency where it is no longer possible to retain the same amount of employees, terminations will occur. There are a number of regulations covering the ways an employee can be terminated, one of which being the proportionality principle.

The proportionality principle

If dismissal is due to economic reasons, an employer must apply the proportionality principle in deciding which employees come into consideration for dismissal. Proportionality is applied within each category of interchangeable positions within a specified age group of employees. The age groups range from 15-24 years, 25-34 years, 35-44 years, 45-54 years and finally 55 and over.

The proposed reduction in staff must be spread equally across all age groups. Within each age group the principle of ‘last in, first out’ applies. This means that the first employees to go are those who have been employed for the shortest time.

Interchangeability

Interchangeable positions are positions in which employees perform more or less the same role. The positions must be comparable in terms of content, required experience, skills and capabilities, as well as duration. More importantly, the positions must be on an equal level and equally remunerated. These factors must be assessed in relation to each other.

The basis for determining the content of the role includes the following: the job description, supplemented where necessary with areas of attention (for generally defined roles), more detailed requirements for the position and general organisational arrangements (for specific jobs).

Case law

A recent judgement by the highest judicial body found that this definition is not always sufficient when determining if a position is interchangeable. The Supreme Court upheld the judgement of the Court of Appeal in Den Bosch which defined ‘an interchangeable role’. The case concerned the dismissal of a  head chef. Shortly after his dismissal he heard that his former employer had appointed a new head chef. The new head chef was a former colleague who had been a chef. The head chef objected and claimed that the proportionality principle had not been properly applied.

The appeal court disagreed. “The question of which jobs fall into the category of interchangeable positions that includes the position of head chef is determined in this case by the positions (and corresponding wage scale) that staff at Tante Louise [the restaurant] hold as defined in their contracts of employment and the duties that Tante Louise could expect of them on this basis, rather than the duties that Tante Louise made them carry out in practice,” the appeal court ruled.

The chef was reappointed as head chef. Although he had no longer been working as a head chef but as a chef, this did not mean that his role could no longer be regarded as interchangeable. He was hired as a head chef and could assume the role of head chef.

Conclusion

Interchangeability is a complex matter, as are all employee dismissals. If you have any questions about reorganisation, the proportionality principle or interchangeability, please do not hesitate to contact one of our employment law specialists.