Terminating an employment contract by an employer on the grounds of a transfer of undertaking is not possible because of the statutory prohibition on dismissal. But what if, after the transfer of undertaking, it appears that the employee’s position does not exist with the transferee?
In this case, the employee had worked for 30 years for a franchisee of the Jumbo supermarket chain in a unique role. The franchisee, i.e. the employer, sold its business (via Jumbo Nederland B.V.) to Maripaan Groep B.V., a larger franchisee operating seventeen Jumbo supermarkets. After the takeover, it became apparent that the employee’s role could not be integrated into the new organisation and was also redundant. At the request of the new employer, Maripaan, the subdistrict court terminated the employment contract. The termination was subsequently upheld on appeal. The Court of Appeal held that the elimination of the position was necessary for business-economic reasons in order to achieve a more efficient business operation, and that the prohibition on dismissal in the event of a transfer of undertaking did not stand in the way of that. It was, however, to be expected that the employer would sufficiently substantiate this, since the request for termination followed shortly after the transfer of undertaking. In this case, the employer nevertheless met that threshold, as it demonstrated that an internal review had shown that the employee’s position did not exist within Maripaan and that an alternative position was not possible, partly due to the employee’s limited availability of eight hours per week.
In cassation, the employee complains that the Court of Appeal failed to recognise that, in short, a fully substantiated business-economic dismissal ground alone is insufficient to bypass the prohibition on dismissal. According to the employee, the Court of Appeal should have examined the intrinsic connection between the invoked economic, technical or organisational reasons and the transfer of undertaking.
The Supreme Court considers that, first, it must be assessed whether there is a fully substantiated ground for dismissal, after which the question is whether a prohibition on dismissal prevents any termination. However, the underlying directive regarding the prohibition explicitly states that a transfer of undertaking may not constitute a reason for dismissal, but that it does not preclude dismissals for economic, technical or organisational reasons entailing changes in the workforce. Those economic, technical or organisational reasons may therefore to some extent be related to the transfer of undertaking without automatically triggering the prohibition on dismissal. The Court of Appeal’s judgment sufficiently reflects this view, meaning that the complaint cannot lead to quashing.
In short, this ruling makes clear that the mere fact that there is a transfer of undertaking does not automatically block every business-economic dismissal. However, the closer a business-economic dismissal occurs to the transfer date, the heavier the employer’s duty to provide reasons showing that the two do not have an intrinsic connection.