The employer annulled its employment contract with the Director of Care over deceit regarding diplomas and work experience, and sought repayment of the wages paid to the employee. In earlier proceedings, the employer had been unsuccessful. Following referral by the Supreme Court, the Court of Appeal ruled that the employee had committed deceit when entering into the employment contract. Since the employer had not been enriched by the employee’s performance, there was no obligation to compensate him. The Court of Appeal ordered the employee to repay his wages.
Facts
In 2016, the employee applied for the roles of psychotherapist and Director of Care. As of 1 January 2017, he was appointed as a statutory director. He joined the employer as Director of Care on a permanent contract from 9 January 2017. In late May 2017, the employer began to suspect that he had provided false information in his application about his work experience, the training courses he had completed, and his membership of various associations. He was subsequently dismissed as statutory director at the general meeting of shareholders on 2 June 2017, due to a breakdown of trust. The employer’s suspicion was confirmed when a former employer named in his CV stated that he had never worked there, and by statements from several associations and training institutes. By email dated 28 July 2017, the employer annulled his appointment and employment contract on grounds of deceit, and sought repayment of the wages paid to him.
Earlier proceedings
The employer sought repayment of EUR 16,819.98 in net wages as an undue payment. The subdistrict court rejected this, ruling that an employment contract can only be annulled out of court where, once the deceit is discovered, the contract proves to have been entirely useless. The Court of Appeal ‘s-Hertogenbosch agreed.
The Supreme Court subsequently ruled that Section 3:44 of the Dutch Civil Code does not require the employment contract to have become (almost) entirely useless for an out-of-court annulment for deceit to succeed. If the employment contract did provide some benefit to the employer, this can be taken into account. The Supreme Court quashed the Court of Appeal’s decision and referred the case to the Court of Appeal Arnhem-Leeuwarden.
Court of Appeal’s ruling
Following the Supreme Court’s guidance, the Court of Appeal had to assess: (1) whether the employer’s out-of-court annulment for deceit succeeded, and if so, (2) what this meant for the effects of the employment contract that had already taken place.
On (1): the out-of-court annulment
The Court of Appeal ruled that the employee had committed deceit when entering into the employment contract. Through the false statements in his CV, he had knowingly and contrary to the truth induced the employer to enter into the contract. The employer was entitled to annul it.
On (2): the effects that had already taken place
The employer’s performance (paying wages) has a monetary value and can therefore be undone by the employee repaying an equivalent (net wage) amount (Section 6:203(1) and (2) of the Dutch Civil Code). Given the nature of the employee’s actual performance – making his labour available – that performance cannot possibly be undone. The question is therefore whether the employer was enriched by the employee’s work.
Since the employee did not hold the required professional registration (BIG), he had provided treatments without authorisation, which the employer had to redo. The employer was also unable to bill for the psychotherapy sessions he had carried out. It was further undisputed that, as a board member, the employee had spent time and attention managing unrest within various teams in the organisation. Even so, the employer was not enriched by this, since the therapists and teams involved in those conversations had assumed he held the qualifications and experience he had claimed, and therefore deferred to his authority on the subject. The employer had, without dispute, argued that this created tension within the organisation once the therapists discovered this was not the case. To the extent his conversations had produced any monetary value at all, this was undone by that development.
The Court of Appeal concluded that the employee had failed to show that the employer was, on balance, enriched by his performance. The statutory conditions (Section 6:210(2) of the Dutch Civil Code) were therefore not met, so the employer owed no compensation. The Court of Appeal overturned the subdistrict court’s ruling, and the employee was ordered to repay the EUR 16,819.98 in net wages he had received.
For the full ruling, click here (in Dutch).
Questions about the above?
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