01 Aug Fixed damages for irregular termination, what notice period should be used to calculate this compensation?
Pursuant to Article 7:677(2) of the Civil Code, an the employee who has given an urgent reason for immediate dismissal to his employer through intent or fault, owes compensation to employer. This compensation is in the amount of the employee’s salary for the notice period. Should the employer’s or employee’s notice period be observed?
The Supreme Court recently ruled that the employee’s notice period should be used in determining the amount of compensation. The employee joined employer in 2009 and was summarily dismissed on Oct. 20, 2020. It is established that the employee acted seriously culpable and that the instant dismissal was valid. Employer requested compensation in the amount of EUR 17,903.19 gross pursuant to Section 7:677(2) and (3)(a) of the Civil Code. The amount of compensation is equivalent to three months of the employee’s wages, which was the employer’s notice period. The Court held that employer’s requested monetary claim was allowable, as its amount had not been disputed by the employee.
The employee believes that in determining the amount of compensation under Article 7:677(2) and (3)(a) of the Civil Code, the court erred in using the terminating party’s notice period (three months as the employer’s notice period) instead of the terminating party’s notice period (one month as the employee’s notice period).
The Supreme Court stated that the compensation is intended to compensate for the disadvantage suffered by the other party of the party who caused the urgent reason by facing an earlier termination of the employment contract than would have been the case if the party who gave urgent reason for summary dismissal to its other party had given notice in compliance with the applicable notice period. In this case, this means that the employer has faced an earlier termination of the employment contract. The employee’s employment contract would have continued for one more month if regular notice had been given, this is the disadvantage suffered by the employer. Therefore, the employer is entitled to compensation in the amount of one month’s wages.
The court based the amount of compensation on the employee’s wages for three months and thus assumed the employer’s notice period. Since the employee is the one who acted seriously culpable, his notice period should be used for the amount of compensation. Here, the Supreme Court noted that the court should have considered ex officio whether the amount of the requested compensation was correct. The fact that the employee did not dispute the amount does not alter this.
ECLI:NL:HR:2023:1058
