News

NOW 2.0

In our previous news releases we informed you about the Emergency Employment Bridging Measure Noodmaatregel Overbrugging voor Werkgelegenheid (NOW) and the changes to this. In the meantime, it has become clear that the NOW regulation will be renewed up to 1 October 2020 (NOW 2.0). Furthermore, the regulation will be partly reviewed. The major adjustments are the following:

• The NOW 2.0 will be renewed by four months and provides for a compensation of the wage cost on the period June, July, August and September.
• The NOW 2.0 can be applied for as of 6 July 2020. The NOW 2.0 can be applied for also if no NOW 1.0 has been applied for. The NOW 1.0 is no longer available as of 5 June last.
• The expected turnover loss must be 20% minimum on a period of 4 months.
• If it is the first time the NOW is applied for, the period on which the drop in turnover must be calculated may be taken as of 1 June, 1 July or 1 August. If it is the second time the NOW is applied for, then said period must be consecutive to the period chosen in the first application.
• The reference month for the wage sum is set on March 2020.
• The surcharge on the wage cost will be raised from 30% to 40%.
• The discount on subsidy in case of redundancy still applies, but will be lowered from 150% to 100%.
• In case of mass redundancy (20 employees or more) the trade unions must be involved (or failing which another employee representation). If the parties do not reach an agreement, then they can apply for mediation with a commission to be set up at Stichting van de Arbeid. If these rules are not complied with, then companies can be curtailed by 5% of the subsidy sum.
• A duty will be introduced for employers to induce their employees to apply for a development recommendation or to take a training in order to preserve employment. Employers may induce their employees for instance by making time or resources available, e.g. from O&O (Training & Development) funds.
• On 2020 through the shareholders meeting in 2021 no dividend or bonus shall be awarded to the board and no own shares shall be purchased, if an aid amount is involved on or on top of the sum which requires an audit opinion. To working companies which received a NOW subsidy while being part of a group this threshold sum does not apply, they must always comply with this. However, it is allowed to grant bonuses to employees.

Through this link https://www.rijksoverheid.nl/onderwerpen/coronavirus-financiele-regelingen/overzicht-financiele-regelingen/now you reach the NOW page of the Central Government which always contains the latest status and answers to various specific questions about the NOW.

Case Law on corona: with respect to a salary suspension of 50%, a salary stop and working form home

We are getting various questions about (the changes to) employment conditions during the Corona crisis. In the meantime, the first court decisions are becoming available. Below three decisions (in preliminary proceedings) are discussed.

An employer who suspends, unilaterally and without further consultation, the payment of salary of an employee for 50% has been pulled back into line by the court in Amsterdam. It concerned an employer who operates a restaurant, said restaurant having been closed by reason of government measures. The employer has applied for NOW and (eventually) was granted 60% of the salary sum on January 2020. The employer used this to pay 50% salary to the employees, also to the ones who had not yet been employed in January.

The employee disagrees to this and claims that the employer be ordered to pay outstanding wages. The employer argues that by reason of the Corona crisis and closure of his business he faced acute financial difficulties. To pay all the employees 50% of their salary seemed therefore fair to the employer, seeing that for lack of resources not all employees could be paid their full salary.

The Cantonal Judge found that it is sufficiently likely that by reason of the exceptional circumstances the employer is facing he finds himself in an unforeseen commercial state of emergency. The employer has a substantial interest which involves in principle that the employees can be asked – in due consultation – to suspend or even fully waive certain claims under employment law. However, the decision to pay 50% of the salary, taken unilaterally and without further consultation, involves too high a drop in income for the employee. Considering the mutual interests, the employee could not be expected to agree to 50% suspension of his salary for several months. And so, the employer had to pay the outstanding wages to the employee. However, the judge informed that she could imagine that the parties would agree to a payment plan (limited in time). Furthermore, the requested legal raise was set at nil, and the legal interest was dismissed.

The second decision concerned an employer who did not pay any salary anymore to an employee for not having any work available due to the Corona measures. The employee had an employment contract under which he would work for eight months, but was entitled to a spread of wages for twelve months. The judge made it clear in the decision that the ‘no work, no pay’ principle has been waived, when the Balanced Labor Market Act entered into force on 1 January 2020. Presently, the adagio is, summarizing, ‘no work, but still pay’. That the employee did not carry out any work by reason of the measures, cannot be attributed to him under the circumstances, and so the employer should pay the employee his salary.

In the third ruling the employee has requested to work from home due to (fear for) corona. The court has ruled in favor of the employer, inter alia considering the fact that the government advice to work from home as much as possible does not constitute an actual right to work from home in this situation.

Accumulation of Grounds of Dismissal: the first court decisions

In our previous newsletters on the Balanced Labor Market Act (Wet Arbeidsmarkt in Balans (WAB)) we already informed you about the introduction of the new i-ground. Based on this, several ‘personal’ grounds of dismissal (such as poor performance, imputable action or omission, or distorted working relationship) can be combined, even if individually they are not fully adequate. I.e. not all the conditions have been met to allow it to be a reasonable ground for dismissal. Allowance of the i-ground, however, does result into a higher compensation of 50% maximum of the transition allowance. Flexibilization of the rigid dismissal law to some extent under the WWZ seemed to be conceivable by this. However the question was and is: to what extent exactly are the combined grounds of dismissal allowed to be inadequate?

The first 7 court decisions on the i-ground have become available in the meantime: in all cases dissolution on this basis was dismissed. Summarizing: seeing that the i-ground had not been sufficiently specified and/or the alleged combination of individual grounds of dismissal as such were not or not sufficiently complete.

If you are considering to take leave from an employee also based on an accumulation of dismissal grounds, please take account of the following:

1. The i-ground is an independent ground of dismissal. This means that this ground, just like the other dismissal grounds should be adequately substantiated. And so, you have to specify and substantiate what circumstances of two or more of the alleged dismissal grounds exactly make that based on the i-ground you can no longer be expected, in reasonableness, to continue the employment agreement with the employee in question. And so, it does not suffice to refer to that already stated with the other grounds of dismissal.
2. Furthermore, it seems to result from case law so far that the individual grounds of dismissal which are combined must be of some substance. It seems that at least one ground should be almost adequate. Combining two or more grounds which are each far from being complete therefore will not be to your avail. As an example, the employee has not been warned of his poor performance and no effort was made to bring up and solve the distorted working relationship. Combining these grounds will not readily result into the intended dissolution of the employment relationship, and that is why you are advised to put on file any relevant matters, so you can show the court in dissolution proceedings that you tried to make the ground(s) of dismissal as adequate as possible.

If you have any questions about the NOW, the adjusting of employment conditions or terminating an employment agreement? The lawyers of Parker are more than willing to answer them.

This newsletter is published for the sake of general information and cannot be construed as an advice.
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