The Unilateral Change Of The Terms And Conditions Of Employment

Recently, the Supreme Court ruled on the balancing of interests that must be made in case an employer wishes to unilaterally change the terms and conditions of employment.

This blog first discusses the doctrine on unilateral change of the terms and conditions of employment and then the consequences of the Supreme Court ruling on this doctrine.

The change of the terms and conditions of employment in general

There are three ways to change the terms and conditions of employment. The starting point is that the change requires the employee's consent. In cases, however, an employer can also make an unilateral change to the terms and conditions of employment if the employer has made a reasonable proposal to the employee and this proposal cannot be refused by the employee according to the standards of reasonableness and fairness. A third option is that the employer makes use of an unilateral changes clause (eenzijdig wijzigingsbeding) if the employee and employer agreed upon such clause in writing.

The unilateral changes clause

The use of an unilateral changes clause is subject to two conditions as reflected in Article 7:613 of the Dutch Civil Code: (i) the unilateral changes clause must be agreed upon in writing, and (ii) the employer must have such a substantial interest in the change that this interest outweighs the interests of the employee in accordance with the standards of reasonableness and fairness.

Approaches in case law and literature

Two approaches to the unilateral changes clause can be distinguished in literature and case law. On the one hand, the approach is followed that the substantial interest of the employer must be determined in absolute terms (also called the absolute approach). On the other hand, the approach is followed that the substantial interest of the employer should only be assessed in relative terms (also called the relative approach). But what do these approaches actually mean?

Absolute approach

In the absolute approach, two conditions must be met before the employer can unilaterally change the terms and conditions of employment:

(i) the employer must have an independent and substantial interest in changing the terms and conditions of employment; and

(ii) the employer must have such an interest in the change that this outweighs the interests of the employee in accordance with the standards of reasonableness and fairness.

Relative approach

This is different in the relative approach. In the relative approach, the...