During negotiations on the termination of an employment contract, the employee is made an offer, after which the employee makes a counter-proposal. The employer initially rejects this, but eventually he accepts the offer as yet. The question is: was an agreement reached between the parties? This was put to the Court of Appeal in a recent case. Employment lawyer Sander Schouten explains the ruling.
The employee and the employer have been negotiating for some time about terminating the employment of the employee by mutual consent. Matters such as continued payment of wages and the noncompetition clause are discussed. The employer’s lawyer then draws up a settlement agreement, that states, among others, that the employment shall terminate on 1 July 2013 and that the termination compensation shall be €133,000.
However, the employee interpreted the agreements differently. His legal counsel informs the employer that the employee can agree to the settlement agreement under the condition that the severance pay is €140,000 (as discussed in previous proposals). The employer does not agree to this and reiterates the previous offer. The employee does not respond to this and informs the employer that he is preparing for termination proceedings.
The employer’s lawyer then informs the other party that his client will as yet agree to the compensation stated by the employee of €140,000. The employer states that this means that there is as yet a perfect settlement agreement. The employee contests this and summons the employer in preliminary relief proceedings. In these proceedings the employee states that his employment has not been terminated and he is therefore owed wages. The employer states as defence that a termination by mutual consent was reached and that the parties are bound to the settlement agreement.
In appeals proceedings, the Court of Appeal finds that the exchange of e-mails between the parties shows that there is no consensus between the parties. The proposal by the employee to adapt the settlement agreement in the point of the severance pay was rejected by the employer. The legal principle is that an offer lapses when it is rejected. This situation occurred here. Because the employer rejected the employee’s offer (to agree to termination with compensation of €140,000), this offer lapsed. The employer could therefore not agree afterwards with the severance pay.
According to the Court of Appeal therefore there was no agreement about the condition to terminate the employment contract. The employee is therefore entitled to claim continued payment of wages. The Court of Appeal grants several parts of the claim and the employer shall have to institute independent proceedings to terminate the employment contract.
As the termination of employment contracts requires either the permission of the subdistrict court or of the UWV, many employers and employees choose to terminate by mutual consent. There are often negotiations about issues such as wages, pensions and option schemes. If the parties fail to reach an agreement, going to court becomes inevitable. The AMS employment lawyers have a broad experience in supervising such exit processes, both inside and outside the courtroom.