By Mr. Tjeerd Hoekstra, CMS
The year is coming to an end and the annual cycle of assessment and performance reviews is coming into view again. This is often also a moment when managers are at a loss and wonder whether sufficient discussion has been given about the employee's performance in the past year. Is the opportunity to give a bad review now lost? Or are there still options to adapt to the situation? The basic principles are highlighted in this contribution.
With the entry into force of the Work and Security Act (WWZ), the structure of dismissal law has changed. Since then, the conditions for dismissal on the grounds of unsuitability – or dysfunction – have been included in the Civil Code and are therefore mandatory. Dysfunction may not be the result of illness or disability of the employee or of insufficient care by the employer for training of the employee or working conditions in general. In addition, the law requires that the employer has informed the employee in a timely manner of substandard performance and has given the employee sufficient opportunity to improve performance.
This last requirement – providing sufficient opportunity to improve performance – relates to the time and the supporting measures that the employee is offered for this. An improvement process should not be too short and should include evaluation moments to periodically record (the lack of) improvement in performance. In addition, the employer will have to be active in taking appropriate measures, such as training, additional guidance “on the job” or designating suitable activities.
Evidence law
With the entry into force of the WWZ, it has been determined that the law of evidence is fully applicable with regard to the substantiation of the grounds for dismissal. In short, this means that the employer must submit to the court in dissolution proceedings and must prove that there is dysfunction. Initially, this led to the vast majority of dissolution requests being rejected on this ground. The burden of proof seemed to be (too) high a hurdle for many employers to overcome. In practice, it is not always easy to expose the dysfunction and build up the file using the yardstick provided by the law.
The Supreme Court recently nuanced the rule of evidence and ruled that the facts to be proven do not have to be established beyond doubt, but that they must be made sufficiently plausible. When it comes to the question of whether the employee is unsuitable, the employer also has a certain degree of discretion. It is primarily up to the employer to assess whether the employee meets the requirements for a position. The judge will then have to assess – if necessary after providing evidence – whether the employer could reasonably have concluded that there was unsuitability or dysfunction. On the one hand, this development seems to provide some relief when it comes to the evidence of dysfunction. On the other hand, the employer will have to continue to pay attention to the improvement process and its recording. The same criterion applies for assessing the grounds for dismissal of the disturbed employment relationship.
Balanced Labor Market Act
The introduction of the Balanced Labor Market Act – which has now been sent to the House of Representatives – introduces the possibility of basing a dissolution request on multiple grounds for dismissal, such as unsuitability and a disturbed employment relationship. This appears to reduce the hurdle to be taken by the employer slightly, but in the event of termination this will be offset by a higher transition payment.
If – in view of the annual appraisal and performance reviews – an improvement process is started in order to be able to give a poor assessment, then it is far (too) late. This does not alter the fact that the next appraisal or performance review is the perfect opportunity to discuss substandard performance with the employee and to set up a possible improvement program according to the book.
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