The redeployment obligation: what are the rules again?

The employer can terminate an employment agreement with the employee if there are reasonable grounds for doing so, and if the employer has investigated whether the employee can be redeployed in a suitable position within (the group of) the employer. This duty applies under Article 7:669(1) of the Dutch Civil Code (DCC). The employer must see whether redeployment is possible within a reasonable period of time, with or without training. A ‘suitable’ position should be searched for: a position that matches the employee's experience, education and capacities. An active involvement is expected from the employer.

The redeployment obligation is further elaborated in the Dismissal Regulation (Ontslagregeling). It follows from Article 9 of the Dismissal Regulation which position must be involved in assessing whether a suitable position is available within the employer's company for an employee eligible for dismissal. In the Court of Appeal ruling that we discuss below, the duty of effort, and the positions to be considered in this respect, are further elaborated.

What is the case about?

The ruling (in Dutch only) regards the dismissal of an employee who joined the employer in 2016. He is part of the IT team. The employer is part of a global group with several locations worldwide. The group consists of 36 companies with 194 locations in 29 countries around the world. The employer has an administrative entity in the Netherlands with approximately 12 employees. The employee is employed by the Dutch entity, but mainly works from home for other entities within the employer's group. In May 2023, the employer submitted a dismissal request for the employee to the Employee Insurance Agency (the UWV). The dismissal request was submitted because the employee's position had become redundant due to organisational changes. The UWV did not give the employer permission to terminate the employment agreement, as the employer has not made it sufficiently plausible that the job, and thus the employee's position, had become structurally redundant. The employer submitted the dismissal to the subdistrict court (kantonrechter). The subdistrict court decided to dissolve the employment agreement of the employee with the employer. The employee then appealed to the court of appeal.

The employee argued that his position has not become redundant, and the employer had not made sufficient efforts to redeploy him. The employer argued that the employee's position had become redundant as a result of organisational changes, and that there were no redeployment opportunities for the employee, including within the employer's group.

What are the court's considerations?

The Court of Appeal first stated that under Article 9 of the Dismissal Regulation, it must be assessed whether a suitable position is available within the employer's company for an employee eligible for dismissal. In this regard, the positions for which a vacancy exists and the positions of other categories of employees that can be made available to the employee are relevant. If the employer is part of a group, this assessment should also include positions in other companies that belong to the group.

With regard to positions for which there is a vacancy, the employer's obligation of effort means that, in principle, it will have to redeploy the employee to a suitable position in the event of a vacancy. The employer in this case stated that it has imposed a hiring freeze. According to the Court of Appeal, this does not affect the statutory redeployment obligation. According to the employer, the hiring freeze would also only cover ‘non-critical hiring’ without given any further explanation by the employer.

The employer also failed to prove that suitable positions had been offered to the employee. In the UWV proceedings, the employer listed many international vacancies and qualified them as ‘non-fitting’ without first discussing them with the employee. The employer did not have a redeployment conversation with the employee, which should have been expected, according to the Court of Appeal. The employer also wrongly assumed that the employee would not be willing to work for another group company in another country. The employer made this judgement based on outdated information about the employee's personal circumstances, without first discussing this with the employee. In the proceedings, the employee indicated a willingness to work for example in Germany. The employer indicated that the employee himself could have applied for IT positions in Germany.

However, the Court of Appeal ruled that the initiative lays with the employer to examine together with the employee which vacancies/positions, possibly with the help of training, would be suitable for the employee and actively search for vacancies within the group. By failing to do so, the employer did not make sufficient efforts to fulfil the redeployment obligation.

The employer argued that under German law the employer was not allowed to actively propose the vacancies in the German company to the employee. The Court of Appeal dismissed this argument because of the employer's insufficient reasoning and on substantive grounds. Although the employee's employment agreement was with the Dutch entity, the employee always performed work for other entities within the group. The Court of Appeal ruled that it was the employer's responsibility to ensure compliance with the Dutch redeployment rules despite any German restrictions. The employer should have actively informed and encouraged the employee to apply for the vacancies in the German company. Merely referring to the intranet where the employee can find vacancies is considered insufficient. As a result, the employee was denied the chance of redeployment in Germany. Lastly, the Court of Appeal stated that the employee had rightly argued that vacancies were simply considered not suitable by the employer if they could not be performed digitally remotely without the employer offering further explanation.

Regarding positions of other categories of employees, the Court of Appeal ruled that the employer had not submitted anything about the existence of jobs of other categories of employees that could be made available to the employee internationally or would become available within a reasonable period of time.

The Court of Appeal concluded that the employer had failed in its redeployment efforts and that the subdistrict court unjustly dissolved the employment agreement in first instance. The Court of Appeal therefore did not get to the point of discussing the additional grounds put forward by the employee.

The employee primarily requested reinstatement of the employment agreement and subsidiary requested a fair compensation (billijke vergoeding). The Court of Appeal did not reinstate the employment agreement. According to the Court of Appeal, there is a remote chance that reinstatement in the position will provide for a workable solution, partly because the employee has been unfit for work since 13 October 2023. As a result, he is unable to look for another job or perform work activities. Also, the employee's position likely no longer exists, which makes it unclear what position he should return to.

The employee seeks an award of fair compensation of EUR 109,723.27 gross. This amount is based on the expectation that he would have remained employed until 13 October 2025 given his incapacity for work. The difference between the Sickness Benefits Act (ZW) or Unemployment Act (WW) benefit (70% of the maximum daily wage) that he now receives and the salary (including holiday pay and average bonus) that he could have earned in this period amounts to EUR 108,024.63 gross. The employee also argues that he suffers from damage to his pension, due to the fact that he is missing out on the employer's share of the pension premium in the amount of EUR 1,698.64 gross. The Court of Appeal awarded a fair compensation of EUR 109,723.27 gross. This amount was not disputed by the employer and the Court of Appeal considers this compensation reasonable in view of the employee's considerations.

Relevance for practice

The ruling again emphasizes that it is important for employers to actively investigate the possibilities of redeployment. Employers in an international group have an additional obligation to actively investigate whether suitable positions are available for the employee at locations abroad, regardless of the local law applicable there. The employer needs to be aware that an active involvement is expected at all times with regard to the redeployment obligation. It is insufficient to merely notify the employee of the available vacancies. The current (personal) circumstances of the employee threatened with dismissal must be considered. Among other things, the employer is required to discuss the options with the employee and actively investigate suitable vacancies in which the employee can be redeployed, possibly with the help of training. The employer must be able to prove that it has actively searched for redeployment opportunities for the employee. To avoid (a claim of) violation of the redeployment obligation, the employer should always conduct a thorough investigation of the possible opportunities. For the employer in an international group suitable positions should be examined and discussed with the employee not only suitable positions in the Netherlands, but also at the foreign companies.

Should you have any questions in light of the above or need legal advice, please feel free to contact us. We will be happy to assist you.