1
Introduction.
This folder
gives an outline of the legal provisions for the termination of
a labour contract in force in the Netherlands Antilles. In everyday
usage, these provisions are commonly referred to as the provisions
for the termination of employment.
We will try
to answer the most common questions concerning dismissal.
This folder
is meant in the first place for employers and those who, from an
employer's point of view, often have to deal with the legislation
concerning dismissal. Also for those who intend to set up a business
with personnel in the Netherlands Antilles; this folder may clarify
a few things.
There
is a separate folder on dismissal law for employees.
2.
Employment protection
Legislation
concerning dismissal should primarily be considered in the light
of employment protection for the employee. To a certain extent,
the legislator tries to protect the interests of the weaker party
on the labour market, the employee. However, the legislator also
has the interests of the employer in mind. For the latter, good
functioning of the business comes first. This implies that, depending
on the business results the possibility should exist to discharge
employees within a relatively short period of time. A dysfunctional
individual employee may also hamper the proper course of actions
in a company. In this case too it should be possible for the employer
to terminate the work relation with such an employee. Dismissal
legislation provides for this.
3.
The termination of a labour contract
A labour contract
may be terminated by giving notice. In certain cases, the employer
needs the approval of the Director of the Directorate of Labour
Affairs to do so. For this purpose the employer has to file a request
with this department.
This procedure,
in which the validity of the dismissal is examined before it can
be executed, is a unique form of employment protection in the region.
Especially because
this construction is not very familiar, it has led to the persistent
misunderstanding that once he/she is hired on a labour contract
for an indefinite period of time, an employee can hardly ever be
dismissed.
If, however,
there is a valid and convincing reason for dismissal, the Director
of the Directorate of Labour Affairs will always give permission
for dismissal.
The dismissal
law (“lei de retiro”) does not apply to the following
persons and agreements:
employees working
in a public organization
employees working
for the government on the basis of a labour agreement);
teachers;
persons who occupy a religious post (e.g. pastors and preachers);
employees who perform household work in the household of private
persons (servants);
the labour agreement of a director;
a labour agreement for a fixed period of time with the exception
of an agreement for a fixed period of time which is directly or
indirectly preceded by an agreement for an indefinite period or
contracts in which the same employee worked for different employers,
who should reasonably be considered to be each other’s successors
with regard to the work performed; cases of bankruptcy.
4.
Grounds for dismissal
The three most
important reasons to terminate a labour contract are:
1 Business-economic
reasons, for instance the closing down of the company, reorganization
or the reduction of economic activity.
In this case
it must be clear that a temporary bridging of the difficulties is
not possible.
2 The
employee is unfit to do the job.
Here it must
be clear that there is no other position in the same company for
the employee concerned.
3 A disturbed
work relationship between employer and employee.
The question
who is to blame may play a role in this context.
It
is very important that the employer's application for permission
for dismissal substantiates the reason for the proposed dismissal.
For instance, if as an employer you want to dismiss an employee
because of disappointing business results, you will have to substantiate
"business-economic reasons" as a reason for dismissal
by means of supporting financial data. If you submit these data
to the Directorate together with your request, this will shorten
the time it takes to process it.
5.
Dismissal procedure
What is the
dismissal procedure and what are you supposed to do as an employer?
The employer
files a substantiated request with the Directorate of Labour Affairs.
For this purpose there are special forms, which can be obtained
at this department.
The civil servants
of the department then call up the employee to defend himself. After
that, the employer can be called (if necessary) to comment on the
defence. This phase of hearing both parties as much as possible
is done in writing.
At the same
time, mediation between the two parties takes place. The civil servant
handling the case writes a report with his findings and conclusions.
This is sent to the dismissal commission. This commission, consisting
of at least two employer representatives, two employee representatives
and an impartial chairperson, usually meets once a week to advise
the Director of the Directorate of Labour Affairs on the applications
for permission to dismiss employees. The Director can grant or refuse
permission for dismissal. Employer and employee(s) will be notified
of the decision in writing.
At first glance
the procedure described above seems to be rather time-consuming.
However, thanks to its many possibilities for dialogue and consultation,
this structure is a guarantee for impartiality in the weighing of
the interests of employer and employee.
In practice
the dismissal procedure takes some time. However, the procedure
is usually shorter than an ordinary legal procedure.
Moreover,
the Direcorate has adopted internal guidelines to shorten the administrative
processing of an application. The maximum period for the administrative
processing of an application for permission to dismiss employees
is six weeks. In special cases this period can be extended with
six weeks after the Minister of Economic and Labour Affairs has
given his consent.
As soon as the
Director of the Directorate of Labour Affairs has granted his permission,
the employee may be given notice of termination of the labour agreement.
However, the period of notice and the effective date of termination
have to be observed. By the latter date is meant the actual day
of termination of labour relations. The period of notice, which
the employer has to observe, depends on the duration of the employee’s
employment and is as follows:
one month, if
the employment lasted less than 5 years;
two months, if the employment lasted 5 years or longer but shorter
than 10 years;
three months, if the employment lasted 10 years or longer but shorter
than 15 years; four months, if the employment lasted 15 years or
longer.
In the case of an individual dismissal after the Director’s
consent and in the case of collective dismissal, the term of the
assessment of the request and/or the assessment of the redundancy
plan can be deducted from the period of notice, if the remaining
period of notice remains at least one month. The period of notice
for the employer can only be shortened by way of a collective labour
agreement. An extension of the period can only occur in writing.
The
rules for the day and period of notice also apply to cases of dismissal
in which no consent is needed from the Director of the Directorate.
If an employee wishes to resign, other rules apply. In this case
the employee must bear in mind one month’s period of notice.
Please note:
in a written labour agreement the parties concerned can make an
exception to the above rules. For example, they can agree to stipulate
a longer period of notice (up to six months).
The duration
of the period of notice is often stated in the labour agreement.
It can also be stated in the collective labour agreement or in a
regulation filed in the clerk of the court’s office.
Notice can be
given orally or in writing. The latter option is preferred.
6.
Collective dismissal
If an employer
intends to terminate within a period of three months at least twenty-five
employees, or more than 25% of the number of employees in his establishment
(with a minimum of five employees), this is referred to as a collective
dismissal.
If an employer
intends to start a collective dismissal procedure, he is obliged
to report this intention to the Director of the Directorate of Labour
Affairs not later than two months before the termination of the
employment agreements. Furthermore, the employer must submit a redundancy
plan within eight days of notification to the director.
Such a redundancy
plan must contain at least the following elements:
a.
the number of employees the employer intends to dismiss, with a
specification of function, age, sex and seniority;
b.
the date of the intended termination of the labour agreements;
c. the result
of the consultation with the labour union if the employees are represented
by a trade union;
d.
the measures the employer has taken to alleviate the consequences
of the dismissal for the employees involved.
7.
When dismissal is not possible
There are a
few cases in which an employer cannot terminate a permanent labour
agreement, not even if a permission for dismissal has been granted.
These exceptions
to the rule are laid down in the Civil Code, article 1615h.
The labour agreement
cannot be terminated during illness or a disablement incurred after
the employee has had an accident. However, if an employee has been
disabled for longer than a year uninterruptedly, and he/she does
not expect to recover partly or fully for his/her own work or or
another suitable job, the Director will normally grant his permission
to terminate the labour relationship. If an employee, who has been
disabled for at least one year uninterruptedly, can make plausible
that he/she will be partly or fully recovered within three months
to exercise his/her own work or other suitable work (which is available
within the employer’s company), the Director will normally
withhold his permission to terminate the contract.
As
of 1 August 2000 each regulation, by virtue of which employment
ends due to the employee’s marriage or due to pregnancy, is
nullified. In addition, an employer is not allowed to dismiss an
employee because the employee is a member of a trade union or participates
in trade union activities, unless the employee takes part in the
activities during work hours and the employer has, for legitimate
reasons, not given the employee permission to do so.
8.
Other ways in which employment can be terminated
Besides the
termination of a labour agreement outlined in paragraph three, there
are a few other ways to terminate employment. Approval by the Director
of the Directorate of Labour Affairs is not needed in those cases.
The most important
are:
a. BY MUTUAL
CONSENT.
In this case,
both you and your employee have agreed to terminate the labour agreement.
Although not mandatory, it is prudent to put this mutual consent
in writing. This will prevent later misunderstandings.
b. DISMISSAL
"ON THE SPOT".
Dismissal "on
the spot" terminates the employment with immediate effect.
However, this must be based on an urgent reason of which the employee
must be notified immediately.
A few examples
of possible urgent reasons are:
- Theft by the
employee;
- gross neglect
of duties by the employee;
- drunkenness
or debauchery by the employee during work.
Before proceeding
to dismiss an employee on the spot, it should be duly considered
whether there is an urgent reason indeed. If this is not the case,
the employee can apply for a nullification of the termination at
the court of first instance. The employee may also file a claim
for damages.
For the employee
too there are reasons that allow a resignation to occur "on
the spot", for instance if wages are not paid on time.
c. A LABOUR
CONTRACT CAN END "BY RIGHT".
This is the
case with labour contracts for a fixed period of time.
It is also possible
that a certain event is mentioned in the agreement instead of a
date, for example, the termination of a project. The labour agreement
also ends in this case. In certain cases a series of contracts for
a fixed period can automatically be changed into a contract for
an indefinite period (see the folder on the flexibilization of the
labour legislation). In that case, however, a notice of termination
is required.
d. TERMINATION
OF THE LABOUR AGREEMENT DURING THE PROBATIONARY PERIOD.
If in a labour
contract or a collective labour agreement a trial period has been
agreed upon, the labour agreement may be terminated unilaterally
with immediate effect during the trial period. For this, approval
by the Director is not needed.
Mind
you: the probationary period has a maximum of two months and has
to be agreed upon in writing.
e.
DISSOLUTION OF A LABOUR AGREEMENT FOR GRAVE REASONS.
Besides the
above-mentioned ways of terminating a labour agreement, there is
always the possibility of requesting the court of first instance
to dissolve the labour contract "for grave reasons". A
lawyer can tell you more about this.
9.
More information
This folder
cannot possibly sum up all the rules and regulations and their exceptions.
If you want to have precise information, you may consult the dismissal
law. You will find the National Ordinance on the Termination of
Labour Agreements in Official Gazette 1972, No. 111 and Official
Gazette 2000, nr. 68.
Articles
1613 to 1629 inclusive of the Civil Code cover the labour agreement.
Article 1615e to 1615x (fifth section) deals specifically with the
different ways in which a labour agreement can end.
|
