Consent to a Change of Employment Conditions
A discussion of the judgment of the Supreme Court dated 12
February 2010, LJN: BK3570
Consent to a Change of Employment Conditions
The question at the heart of this case is whether an employment
condition in force between the parties, relating to a pension
scheme for commission income, has been changed by mutual consent,
in the sense that the relevant pension scheme has been terminated.
More specifically this brings up the question of whether this
change requires the unambiguous consent of the employees.
The Facts
Employees are or have been employed by Stichting Centrale
Zorgverzekeraarsgroep Ziekenfonds ("CZ") as field
staff members. Part of the remuneration of the field staff
employees consisted of commission income. Until 1 January 2000 the
pension scheme of the employees of CZ, which was handled by the
Stichting Bedrijfspensioenfonds Zorgverzekeraars
("SBZ"), did not have the option of building up pension
on variable (commission) income. CZ has taken out pension insurance
for the commission incomes of the field staff members with the
insurance company REAAL. Thus, the field staff members were given
the opportunity to build up pension also on their commission
incomes. The employees themselves paid the insurance premiums for
this, amounting to 5% of the commissions earned in a year. These
premiums were paid through deductions from the commission incomes.
The additional retirement pension that was built up provided for
monthly payments starting from the 65th year of age.
In the period 1996-1997, CZ informed its employees that the
scheme had become outdated and that it was negotiating with REAAL
and SBZ. In April 1999 CZ advised its employees to assign the
pension of REAAL to SBZ. Employees signed the declaration of
assignment. Afterwards, the new scheme proved to have two
disadvantages: a) no more pension on commission income was built
up, and b) the commission income was no longer taken into account
with regard to the early retirement scheme. Employees brought
claims before the Subdistrict Court in order to obtain either a
replacement pension scheme with regard to the commission incomes,
or compensation and the addition of their commission incomes to the
pensionable earnings of the early retirement benefits.
The Subdistrict Court ruled in two interlocutory judgments that
the employer was responsible for the loss employees have suffered
as a result of the termination of the REAAL scheme. According to
the Subdistrict Court, good employment practices require CZ to pay
compensation.
The Court of Appeal set aside the judgments of the Subdistrict
Court and denied the claims. In the opinion of the Court of Appeal,
CZ had informed the field staff employees clearly of its proposal
to terminate the REAAL scheme.
Judgment of the Supreme Court
The Supreme Court then held that the termination of the pension
scheme is, as far as the commission incomes are concerned, an
amendment of the employment agreement, which requires a further
agreement to that effect between the employer and the employee.
According to the Supreme Court, the question of whether such an
agreement has been formed must in principle be answered on the
basis of the general rules for the formation of a (subsequent)
agreement. However, in view of the nature of the legal relationship
between employer and employee, the employer may only rely on an
individual employee having agreed to a change of his employment
conditions that implies a deterioration of these conditions for
him, if the substance of this change has been made clear to the
employee and statements or behavior of the employee give reason to
assume that he has consciously consented to this change.
In order to answer the question of whether the employee consented
to the change referred to above, the court does not have to
establish each time in so many words that the consent was
unambiguous.
Tips:
- This judgment makes clear that the employer, when changing
an employment condition (negatively), may only rely on the
consent of an employee if: a) clarity has been given on the
substance of that change, and b) statements or behavior of the
employee give reason to assume that the employee has
consciously consented to that change. Employers would do wise
to inform each employee clearly of the substance of the change,
and to make the employee express his consent to the change in
writing.
- It must be emphasized that the standard used in this case
does not apply when an employment agreement is terminated by
mutual consent. Because of the drastic consequences for the
employee, such termination requires the employee's
unambiguous acceptance, and therefore the standard will be
higher.