Is an employer required to redeploy an employee made redundant remotely for a foreign sister company? The Amsterdam District Court recently dealt with this question.
The background
An employee had worked for a Dutch company since 3 April 2018. This employer is part of an international organisation that is engaged in student recruitment for distance education.
At the end of May 2020, the employer decided to cease all activities in the Netherlands. Apart from the employee's employment contract, all the other 18 employment contracts were terminated by means of a settlement agreement due to economic circumstances. After the office in the Netherlands closed on 30 June 2020, the employee (temporarily) performed her work online for a Czech sister company of the employer, as she was the only employee not to sign the settlement agreement.
On 10 July 2020, the employer requested permission from the state Employment Insurance Agency, the UWV, to terminate the employee's employment contract. The UWV refused, because it was not clear why the employee could not continue to work for the Czech sister company online.
The employer then requested the Subdistrict Court to terminate the employee's employment contract. The employee put forward a defence arguing that she was able to continue her work, which in her opinion comprised her entire former work package, online for the Czech entity.
The decision
The court ruled that the employer did have valid reasons for closing down the Dutch branch. The company was structurally loss-making. The key question in this case was whether the employer had fulfilled its obligation to redeploy the employee. The judge was of the opinion that it had. It is true that the employee had worked online for the Czech entity for a period of time, but the employer had properly substantiated that this was a temporary (special) situation because the employee had not signed the termination agreement. Her work during this period consisted purely of following up existing leads, still from the Netherlands. As the employer had substantiated why the employee's physical presence in the Czech Republic was essential for her work, the court held that the employer could not be required to allow the employee to continue to perform her work for the company in the Czech Republic online from the Netherlands.
What does this mean for you as an employer?
In the event of the dismissal of an employee, you, as the employer, must investigate whether another, suitable position is available within the company within a reasonable period of time (though this obligation does not apply in cases of serious fault committed by an employee). If the employer is part of an (international) group of companies, or if a company has several branches, it is also necessary to examine whether the employee can be redeployed there.
The COVID-19 pandemic has shown that many functions can be performed from home. However, as this ruling demonstrates, if work can be carried out remotely (online) for a foreign sister entity, this does not automatically mean that there is a suitable position and therefore a duty to relocate the employee. If you, as an employer, can demonstrate that it is essential for your employee to physically come to the workplace, s/he does not have to be reassigned to a position in which the work is purely remote and performed from another country. We expect that a similar conclusion would be drawn in cases where work is purely carried out in and from the Netherlands.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
