Successive employment practice

Industrial law operates a chain approach in that a cap applies to the (overall) term of successive definite employment agreements and to the number of such agreements. If the term of the successive employment agreements exceeds 36 months in the aggregate, the employment agreement in question on expiry of these 36 months will be regarded as having been entered into indefinitely. The same applies where more than three successive definite employment agreements have been entered into, each such “successive employment agreement” being defined as an agreement having been entered into within a three (3) month term of the date of termination of the previous agreement. It makes no difference for the chain approach whether the employer has remained the same or whether the original employer at some point was succeeded by another: “successive employment practice” involves the nature of the work remaining the same even though the identity of the employer has changed.

A court case dealt with the permissibility of setting aside the consequences of successive employment practice where the employer and the employee alongside the “regular” employment contract had concluded a separate agreement accordingly. The scenario in question had involved the bankruptcy of a business, with the trustee in bankruptcy cancelling all workers’ employment contracts. Two executive directors formed a new legal entity, from which they resumed the bankrupted business’ operations. They offered a former member of staff of the bankrupted business a definite employment agreement for the same duties he had performed before the original business went bust. When the employee signed his new employment contract, he additionally signed a settlement agreement in which it was stipulated that the new employer could not be regarded as a successive employer, the upshot of this being that the employment agreement on offer was to terminate as at the agreed date, in departure of the mandatory regime as set out in the Netherlands Civil Code.

According to the Sub District Court the settlement agreement had been at odds with mandatory rules of law and as such had been a transgression, the parties having been anything but at loggerheads at the time they concluded the settlement agreement. The Sub District Court concluded that the mandatory regime had evidently been departed from intentionally. Had there been no inconsistency with mandatory rules of law, there would have been no reason to conclude the settlement agreement. According to the Sub District Court the advance realisation of the termination of the employment contract in the context of a settlement agreement was not permissible as such termination was contingent on permission being obtained to cancel the agreement, or on dissolution of the employment contract. The settlement agreement having rightly been extrajudicially quashed, this had left the employment agreement in full force and effect, so that the employer had no choice but to admit the employee to the work floor as well as being under the obligation to continue paying his wages.