Notice requirement for fixed-term employment contract

16 March 2023

Late last year, the Dutch Supreme Court ruled in its judgment of 7 October 2022 that the ‘compensation in lieu of notification’ within the meaning of Section 7:668 of the Dutch Civil Code (DCC) is always due in the event of non-compliance with the written requirement, even if it was clear to the employee that the employment contract would not be continued or the employee does not suffer any disadvantage.

What was at stake in this case?

The employee was employed on the basis of a fixed-term employment contract. On 30 October 2019, the employer informed the employee verbally that his employment contract would not be renewed from 1 December 2019. The employee found another job as of 1 December 2019. Nevertheless, in these proceedings, the employee requested that the employer must be ordered to pay one month’s salary under Section 7:668(3) DCC. The Dutch Court of Appeal ruled that the requirement of written notice under 7:668 DCC had indeed not been met by the employer, but due to reasonableness and fairness the compensation in lieu of notification could not be claimed in this case, as the employee already had a new job and had not suffered any damage. The employee disagreed and appealed to the Dutch Supreme Court.

Dutch Supreme Court verdict?

When it comes to a rule of mandatory law (such as the written requirement of the notice under Section 7:668 DCC), a court should exercise restraint in applying reasonableness and fairness. The notice requirement provides an employee with clarity about the continuation of his employment contract. Reason why the legislator attached a requirement of written form to it. As a result, according to the Dutch Supreme Court, a notice fee is due in all cases where the employer fails to inform the employee in writing about whether the fixed-term employment contract will be renewed. Even in cases where an employee suffers no loss and has even already found another job.

Tip for practice?

Section 7:668 DCC regulates the employer’s so-called ‘obligation to give notice’ to inform the employee in writing no later than one month before the end of the temporary employment contract by operation of law about whether the employment contract will be continued and – in case of a possible continuation – the conditions under which. Make sure that the notice is always in writing. Breach of the obligation to give notice as to whether to extend results in a fine, consisting of one month’s salary if the employer has failed to fulfil its obligation in its entirety. The employer who gives late notice to the employee owes compensation in the amount of the salary for the period that the obligation was fulfilled late.

Author: Ilaha Muhseni