The Date on Which Settlement Is Reached

A discussion of the judgment of the Subdistrict Court of Amsterdam dated 10 June 2008, JAR 2008/227

Fictitious Notice Period

The employee whose employment agreement is terminated may, under conditions, claim an unemployment benefit. One of these conditions is that the employee may not be voluntarily unemployed. Since 1 October 2006 an employee is no longer voluntarily unemployed if he agrees to a termination of his employment agreement by mutual consent. The unemployment benefit starts as soon as the employee becomes unemployed. However, if the employee has been awarded compensation, the fictitious notice period must be taken into account. In the event of a termination by mutual consent, the fictitious notice period starts after the date on which the termination agreement has been agreed upon in writing and amounts to - briefly summarized - the notice period less one month.

The Case Before the Subdistrict Court of Amsterdam

The case under discussion before the Subdistrict Court of Amsterdam related to an employee and an employer who agreed that the employment agreement would be terminated as of 31 March 2007, with a compensation being granted. The final agreement was realized after the employer had informed the employee in a letter dated 20 February 2007 that he consented to the conditions set out by the employee. As a result of this consent there was full agreement between the parties. Next, on 23 February 2007 the employee signed the settlement agreement and returned this agreement to the employer, after which the employer signed this agreement on 1 March 2007. Because the settlement agreement had not been signed before 1 March 2007 but on 1 March 2007, the UWV (Employee Insurance Implementing Body) decided that the unemployment benefit would not start on 1 April 2007 but on 1 May 2007. After all, the fictitious notice period, according to the UWV, only started on 2 March 2007. Next, the employee took the position that the employer had to pay the wages over March 2007 to the employee now that he had signed the settlement agreement too late.

Which Date is Decisive?

The Subdistrict Court rejected the position of the employee and ruled that, all correspondence between the parties being viewed in its coherence, on 20 February 2007 the requirement was met that the termination of the employment agreement had to be agreed upon in writing. According to the Subdistrict Court, this view is also in line with practice, because termination agreements are often realized by consecutive correspondence between the parties (or their representatives). Therefore, the fact that the settlement agreement was not signed until a later date did not alter the fact that written agreement on the termination of the employment agreement had already been reached.

Tips

• If in the event of termination of the employment agreement the employee is awarded compensation, the employee must take into account that he will only receive an unemployment benefit after the fictitious notice period has been observed;
• The fictitious notice period starts at the moment when written agreement has been reached between the parties about the conditions under which the termination of the employment agreement takes place.
• What is relevant is the date on which the conditions have been confirmed by the parties. This confirmation may also be made in the correspondence. If need be, it should be set out in a later settlement agreement that the agreement has already been reached before.