A probationary period sometimes isn't long enough to gain a good impression of an employee and the employer might still want to give the employee a further chance. In a recent case, the District Court of Midden-Nederland (click here, Dutch only) involved a situation where the employer had contrived something along these lines. The employer terminated the employment contract during the probationary period and entered into a new, shorter employment contract with the employee. Is this allowed?
What was the case about?
The employee joined a law firm on August 15, 2019 as a lawyer, based on an annual contract including a one-month probationary period. The employer told the employee on September 12, 2019 that his work was not satisfactory. The employer offered the employee a new, shorter employment contract for four months, which the employee had to accept before the end of the probationary period. The employer confirmed this offer in writing on September 14, 2019 and invoked the agreed probationary period, so that the existing contract formally came to an end on September 15, 2019.
Initially, the employee rejected the proposal, at which point the employer confirmed to him that the employment contract had been terminated during the probationary period. On further consideration, however, the employee wanted to stay on with the employer and began a new four month employment contract on September 16, 2019. The employer did not extend that employment contract. The employee then initiated legal proceedings, asking the court to declare that the employer had acted unlawfully by exerting pressure on him to enter into a new and shorter employment contract. He also claimed payment of compensation of EUR 53,560 gross for lost wages plus statutory interest.
The sub-district court held that there had not been any unlawful action due to abuse of power or breach of the standards expected of a good employer. The court reached this conclusion because the employee had not agreed to the second employment contract under any threat of dismissal during the probationary period. He had already been dismissed, and the employment contract had already ended, before the employee agreed to a new contract. It was clear to the employee that dismissal during the probationary period would logically follow. The sub-district court dismissed the compensation claim.
The line of case law
This ruling conforms to a line of prior case law finding that an employer can, in principle, lawfully terminate an employment contract during the probationary period. The dismissal during the probationary period is not rendered unlawful simply because the employer then offers a shorter employment contract.
But this approach is not entirely without risk, as there are also rulings where the new, shorter employment contract is regarded as a longer probationary period. Courts have held that there has been an unlawful dismissal during the probationary period, including in a ruling along these lines by the District Court of Arnhem (click here, Dutch only). In that case, the employer had talked explicitly about "converting" the initial twelve-month employment contract into a six-month employment contract. The employer also explicitly indicated that the new employment contract was designed to let it assess the employee's performance over a longer period. The case law also tells us that an abuse of power is unlikely if the request for a second chance comes from the employee.
Conclusion and tips
To summarize, in the Netherlands, termination of the employment contract during the probationary period with an offer of a new, shorter contract is possible. But employers should consider the following points, including potential steps:
- confirm the dismissal during the probationary period in writing, so that employers readily can show that the contract was terminated in good time;
- document the fact that the employee takes the initiative for a second chance;
- do not pressure the employee into agreeing to a second employment contract; and
- give the employee time to consider the offer.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.