An employee who successfully challenges dismissal in the subdistrict court retains his right to payment and job. If he will not be successful in the court of appeal, the employee will no longer be entitled to wages. An employer who lodges an appeal therefore has to choose whether or not he will pay the employee or grant him access to work. Keep in mind that lawsuits can take years and this may involve substantial labour costs and potential increases.
An employee who was dismissed with immediate effect successfully contests the dismissal. What are the options you, as an employer, have and what else do you have to take into account?
In the event of dismissal, the employee can go to court and then to the court of appeal and even in cassation. The courts can render different judgments. We wrote before about the situation where the subdistrict court rescinded the employment contract, whereas the court of appeal reinstated it. This blog deals with the converse situation: Dismissal with immediate effect has first been annulled and then approved of by the court of appeal. In retrospect, the employee’s dismissal with immediate effect was justified. Does the employer have to continue to pay wages during the period between the first decision by the subdistrict court and the second by the court of appeal?
A recent decision has provided more clarity. An employee of a printing business had taken three issues of a children’s book without asking prior permission, which had been required. Therefore, he was dismissed with immediate effect. He challenged the dismissal in subdistrict court successfully. The employer had to reinstate the employee to the job. Then, the employer submitted an appeal against the judgement and did not allow the employee to work and did not pay wages either. The court of appeal ruled in favour of the employer and the employment contract was (still) rescinded.
Pursuant to the court of appeal, the employer did not have to pay wages to the employee for the period in between the ruling of the subdistrict court and the ruling of the court of appeal. After all, he had a good reason for denying the employee access to work with immediate effect. The Supreme Court did agree with this.
In this situation, the employer was successful in appeal. However, this is not the rule. What happens if the employer denies the employee access to work, does not pay wages and will not be successful in the court of appeal?
If in appeal is found that the dismissal was not lawful, this means that the employee has always been employed and is thus entitled to wages. The employee must have expressed to be available/prepared to perform work. If that has been the case, the employee will retain the entitlement to wages even if he does not work. That the agreed upon work was not performed was a choice by the employer and is therefore at his expense.
As lawsuits can take years, this can involve substantial amounts. The employer is therefore well-advised to consider that the employee could be successful in the court of appeal and that he might still have to pay outstanding wages. In addition, the wage claim can be increased by the statutory interest and the statutory increase due to late payment, which can amount to 50%. Also, the employer can be required to reinstate the employee to his old job, even if someone else may have been hired for the position. Therefore, the employer has to make a realistic estimate regarding his chances of success to terminate the employment contract in the appeal.
Different rules apply to continued payment of wages in the event of suspension than to dismissal. In this event the wages will be for the account of the employer, even if the employee has prompted the measure. This means the employee is entitled to wages and the employer has to pay them, even if the employee does not perform in return.
Our team of labour and employment law specialists will be happy to help you assessing the options and limiting the risks in dismissal. Would you like to learn more about this topic or do you have any other questions? Please contact us:
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