Booking.com: limitation period for pension contribution claims, 5 or 20 years?

Contrary to Advocate General (‘A-G’) Drijber, we are of the opinion that the legal system of statute of limitations law dictates that in principle not article 3:308 of the Dutch Civil Code (a short, ‘subjective’ limitation period of five years), but the ‘main rule’ of article 3:306 of the Dutch Civil Code (a long, ‘objective’ limitation period of twenty years) applies to these types of claims. We argued this earlier in our news report (in Dutch) about the judgement of the Arnhem-Leeuwarden Court of 15 October 2019 (ECLI:NL:GHARL:2019:8464). The Central Netherlands District Court ruled along the same lines on 21 April 2021 (ECLI:NL:RBMNE:2021:1723; referring to the aforementioned 2019 ruling) and 30 June 2021 (ECLI:NL:RBMNE:2021:2910) that article 3:306 of the Dutch Civil Code applies.

1. Article 3:308 of the Dutch Civil Code, as mentioned by A-G Drijber (under 4.16 et seq.), in principle does not apply to this type of pension contribution claim. This is because, in the case of an employer who is not a member of any relevant employers' organisation, they arise directly and immediately ‘by operation of (substantive) law’, namely the compulsory decree of the industry-wide pension fund and the applicable regulations. These claims therefore arise by operation of law, and awareness of these claims on the part of the industry-wide pension fund and the employer is not a condition for their arising; Article 3:306 of the Dutch Civil Code applies to these claims.
2. Our legislator has in fact made the short, subjective limitation period of five years in Articles 3:307 to 3:311 of the Dutch Civil Code dependent on the creditor's awareness of the existence of the claim and the debtor's person. This ensures that this five-year limitation period only runs if the creditor can enforce his claim. Any other approach would lead to the consequence that a claim can become time-barred (‘expire’) before the possibility to exercise it is present. See Asser/Sieburgh 6-II 2021/401.
3. For the application of the articles under b, with a subjective limitation period, including therefore Article 3:308  of the Dutch Civil Code, the principle of so-called ‘objectified’ knowledge applies; the legislator assumes that the claim is known to be due and payable because the creditor and the debtor know each other. That is why the moment of enforceability provides a correct starting point for the short, subjective limitation period. See J.L. Smeehuijzen, De bevrijdende verjaring, Kluwer 2008, diss. (p. 156-158).

An ‘unrestricted’ application of the short limitation period of Article 3:308 of the Dutch Civil Code to a pension contribution claim with a purely substantive-legal basis, where the debtor and creditor do not necessarily know each other, can lead to very unfair outcomes. Nevertheless, this short limitation period has been repeatedly applied to such a situation in lower court rulings. A-G Drijber correctly observes that there is now considerable disagreement about the answer to the question of exactly when this short limitation period commences. Apparently to limit the aforementioned ‘unfair outcomes’, the lower courts apply the following two alternative moments (options) of enforceability, which can cause the short limitation period of Article 3:308 of the Dutch Civil Code to commence at a later date.

1. The moment that the industry-wide pension fund became aware of both the employer and the overdue pension contribution claim.
2. The moment of expiry of the payment term of an imposed contribution invoice, in accordance with the implementation regulations of the pension fund.

Both of the above-mentioned options seem legally incorrect to us. The moment of enforceability does not depend on the familiarity of (one of) the parties (option a), according to the legal system of Article 3:308 of the Dutch Civil Code. In addition, it seems incorrect that an industry-wide pension fund can unilaterally determine the moment of enforceability (option b). In this context, A-G Drijber rightly refers to Article 6:38 of the Dutch Civil Code (‘if no time for fulfilment has been determined, the obligation can be fulfilled immediately and fulfilment can be demanded immediately’), as well as to the Supreme Court decision of 13 March 2015, ECLI:NL:HR:2015:588 (Carlande), in which it was ruled that claims by an industry-wide pension fund against an employer for the payment of contributions arise ‘automatically’ by operation of law. In short, both the claim and its enforceability arise by operation of law at the moment that the scope of the law (that’s the industry-wide pension fund's compulsory decree) applies.  

1. The above-mentioned options a and b can result in a ‘potentially infinite retroactive effect’, because the enforceability (and thus the start of the limitation period) can, theoretically, commence at a time that can be decades after the (legal) occurrence (origin) of the claim.
2. A potentially ‘infinite period’ due to an uncertain starting point is precisely not what the legislator intended with the introduction of the short, subjective limitation period of Article 3:308 of the Dutch Civil Code.

These fundamental problems in applying Article 3:308 of the Dutch Civil Code to this type of claim illustrate that Article 3:308 of the Dutch Civil Code does not apply, and that one should ‘fall back’ on the main rule of Article 3:306 of the Dutch Civil Code. It can be argued that Advocate General Mok already pointed this out in 1993. We will explain this in the next paragraph.

The reference by A-G Drijber to the Timmermans / Bouwbedrijf Van Bergen B.V. ruling handed down by the Supreme Court in 1993 under old law (HR 10 September 1993, ECLI:NL:HR:1993:ZC1054, NJ 1993/736) does not detract from the above. First of all, that case involved an employer and an employee, and therefore not, as in the Booking.com case, an industry-wide pension fund and an employer. Furthermore, it is interesting that in his opinion, in that 1993 case, A-G Mok wrote (under 2.2, 3.1.1, 3.1.6 and 3.1.7) the following about the discussed Article 2012 of the old Dutch Civil Code (somewhat the equivalent of the current Article 3:308 of the Durch Civil Code, to which both articles A-G Drijber refers).

1. Application of Article 2012 of the (former) Dutch Civil Code requires that it concerns (i) an obligation of the debtor arising from the same legal relationship to (ii) periodically pay amounts due to the creditor. Article 3:308 of the current Dutch Civil Code stipulates almost the same as the former Article 2012 of the Dutch Civil Code.
2. The employee, Timmermans, argues (in cassation ground 1) that Article 2012 of the (former) Dutch Civil Code does not apply to the claim he, as an employee, has made against his employer, Van Bergen. This is based on Van Bergen's failure to fulfil its obligation towards the (implementing organisation of the) industry-wide pension fund (SFB). In that relationship, Timmermans, as an employee, is a third party and as such he will not always be aware of the debtor's failure to fulfil its obligations.
3. For Article 2012 of the (former) Dutch Civil Code to apply, it is required that it concerns periodically due amounts from the legal relationship between creditor and debtor. Apparently, the court, in its verdict contested in cassation, assumed that the pension contribution is part of the wage and is periodically owed and therefore falls under the scope of Article 2012 of the (former) Dutch Civil Code.
4. However, pension (contributions) that the employer must pay in full or in part in accordance with pension laws may not be considered (part of) the wage. The above means that the court ruled on false grounds that the claim of Timmermans would be time-barred pursuant to Article 2012 of the (former) Civil Code.

In addition to the above, A-G Mok (under 3.1.7), with reference to ‘current law’, adds that the opinion of the court contested in cassation could, in his opinion, lead to (the following) socially undesirable consequences.

‘It is not easy for employees to verify whether their employer is paying the pension contributions owed to the pension fund. If Article 3:308 of the Dutch Civil Code is not applied, but either Article 310 or Article 306 is, the chance of such employees having their fundamental interests violated is at least much smaller’.

This interpretation by A-G Mok also applies, in our opinion, by analogy to the relationship between an employer and an industry-wide pension fund. After all, it is not feasible for an industry-wide pension fund to check the Trade Register of the Chamber of Commerce to verify which employers may not have registered yet. Employers have a duty to independently investigate the applicable scope and, if applicable, register with the industry-wide pension fund. Finally, the employer has the information relevant to assessing the scope of application, and an industry-wide pension fund does not have this information, unless it is provided by the employer.

The Supreme Court ultimately ruled (under 3.4 and 3.5) in its 1993 judgement that Article 2012 of the (former) Dutch Civil Code does not apply to an action for damages by Timmermans due to Van Bergen's wrongful failure to comply with an obligation arising from the law towards SFB.

A-G Drijber argues that Article 3:308 of the Dutch Civil Code ‘aims to align’ with Article 2012 of the former Dutch Civil Code and therefore also applies the Supreme Court's 1993 ruling to the Booking.com case. The following comments can be made regarding this argument.

1. To begin with, paragraph 3.2 of the 1993 judgement must be considered, in which the Supreme Court ruled as follows (NJ 1993/736).
   
   'The lower court assumed (undisputed in cassation) that Article 2012 of the (former) Dutch Civil Code applied to SFB's claim for Van Bergen to fulfil its existing obligation towards SFB to pay SFB old-age pension contributions for Timmermans (periodically). Based on this, the lower court ruled that the same should apply with regard to the claim(s) asserted by Timmermans in this case. (...)'.
   
   The Supreme Court then simply assumes in the ‘obiter dictum’ in paragraph 3.4 the undisputed principle (between the parties) that Article 2012 of the (former) Dutch Civil Code applied to the claim of SFB (a ‘third party’) against the employer. This aspect did not require a judgement in cassation, and the Supreme Court mentions this principle in paragraph 3.4 in fact only to illustrate that Article 2012 of the (former) Dutch Civil Code does not apply (analogously) to the employee's claim against the employer in this case, also based on the (undisputed in cassation) assumption that that article does apply to SFB's claim against the employer.
2. Furthermore, the Supreme Court rules in paragraph 3.4 with regard to the point of dispute that the case revolves around (the claim of the employee against his employer) that ‘there is no place for the application of the rule laid down in article 3:312 of the Civil Code for current law, [partly] because this rule, due to its close connection with the fundamentally changed system of statute of limitations law, is not eligible for anticipation'. So in 1993, the Supreme Court rightly considers that there is a ‘fundamentally changed system of statute of limitations law’.
3. In his aforementioned and still authoritative dissertation from 2008, Smeehuijzen agrees with this assertion of the Supreme Court and repeatedly states that ‘the introduction of a subjective limitation period is the most important innovation compared to the old statute of limitations law’ (e.g. p. 80). In short, specifically because of the introduction of the subjective limitation period (included in, inter alia, Article 3:308 of the Dutch Civil Code), the legal system of statute of limitations law has changed so fundamentally that the aforementioned ‘obiter dictum’ by the Supreme Court in 1993 (in paragraph 3.4) regarding old law (about a premise undisputed in cassation), in our opinion, should have hardly any value with regard to current law.

A-G Drijber is correct to note that a limitation period can be extended if the debtor (such as an employer) deliberately conceals the debt (Article 3:320 of the Dutch Civil Code in conjunction with 3:321 paragraph 1, under f, of the Dutch Civil Code). In our opinion, this could include both (i) an employer wrongly failing to register with an industry-wide pension fund and (ii) an employer wrongly failing to provide scope information to an industry-wide pension fund.

In addition, we note that payment of (overdue) premiums and contributions can also be demanded from an employer by an industry-wide pension fund by way of compensation for damages. The statute of limitations Article 3:310 paragraph 1 of the Dutch Civil Code applies to such a claim. Wasn't a claim for damages from an employee against an employer the subject of the Supreme Court ruling from 1993?