DOING BUSINESS IN THE EU


Doing business in the EU

Dutch labour law and demotion of employees

Demotion may seem an attractive solution for poorly performing employees. On 1 October 2013 the Court of Appeal in Den Bosch ruled on the acceptability of a demotion and its requirements.

 

  • The employee must be engaged in an improvement plan,
  • Performance appraisals must be taken seriously and done thoroughly,
  • Point of improvement must set out in an improvement plan, with action steps and assessment criteria,
  • Both the employer and the employee should actively work on the points of improvement that are mentioned in an appraisal.

 

 

This judgment provides us with some important lessons:

  • A demotion cannot be upheld easily. The courts will test the demotion against the criteria from Stoof/Mammoet. Before an employer decides to proceed to a demotion, the employee should have been given the opportunity to go through an improvement plan.
  • Océ had mentioned important points of criticism in its periodic appraisals. However, these points were not reflected in the overall conclusion and no action had been taken on these points. The judgment underlines the importance of appraisals, but not only as paper tigers. Both the employer and the employee should actively work on the points of improvement that are mentioned in an appraisal.
  • Demotion is not impossible. It should, however, be very carefully prepared and carried out. The test used in this case by the Court of Appeal, is effectively the same test that would be used for a dismissal: was the employee performing poorly and had the employee been given the opportunity to improve?

SourceKennedy Van der Laan

 

Andre Beukes LLM

Andre Beukes LLM

I am an International human resources consultant to multinational companies in international employment law and employee relations.

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