Category: Weblog

Study costs clause and mandatory education: what is the situation?

Posted on by Iris Taling

Many employment contracts contain a study costs clause. In this blog, we will discuss mandatory education and the conditions for a valid study costs clause. We will also discuss a recent case in which the court ruled that the employer had not made it sufficiently clear to the employee what the consequences would be if the employee had to pay the study costs.

Mandatory education

The law on study cost clauses was amended on 1 August 2022. Pursuant to Section 7:611a of the Dutch Civil Code, an employer must offer mandatory education without any costs. This applies if the training is necessary for the performance of the work or for the continuation of the employment contract. In addition, training that is mandatory under a law or collective labour agreement must also be offered free of charge. A study costs clause is not valid for compulsory study costs.

However, it is not always clear in all cases when training is mandatory. This regularly leads to legal proceedings. For instance, the Rotterdam Subdistrict Court (ECLI:NL:RBROT:2024:8929) ruled that a course in German language and regulations was not compulsory training for a combination machine operator. In another case, the court ruled (ECLI:NL:RBZWB:2024:6859) that the SVH Social Hygiene training course was compulsory for an apprentice chef.

Conditions for a valid study costs clause

If the training is not mandatory, the parties are free to agree on a study costs clause. The study costs clause is not specifically regulated by law. Nevertheless, the Supreme Court ruled on the reimbursement of study costs in its judgment of 10 June 1983 (Muller/Van Opzeeland). A study costs clause is valid if the following conditions are met:

  1. It is clear how long the employer will benefit from the knowledge and skills acquired during the study programme.
  2. It has been agreed that the salary for the study period must be reimbursed if the employment relationship ends during or immediately after the study period.
  3. The reimbursement obligation is reduced proportionally during the period referred to in 1.

If these conditions are not met, the study costs clause is not valid and the employee does not have to repay the study costs.

Insight into the consequences of repaying study costs

In a recent case (ECLI:NL:RBZWB:2025:2796), the subdistrict court had to rule on whether an account manager had to repay the costs of courses he had taken. The employee terminated his contract shortly after completing a two-day course in basic hydraulics. The employee believed that the course had been “more or less” forced upon him. The court found that this did not mean that the course was necessary. Therefore, Article 7:611a of the Dutch Civil Code did not apply.

Because the course was not part of mandatory training, the parties were free to agree on a study costs clause. However, the study costs clause could not be invoked in this case. The employer had not made clear in advance what the costs of this course would be and what the consequences would be if the employee left. The employer could not refer to a general provision in the employment contract. The employment contract did not specify which courses were covered by this provision and what costs were involved. In other words, the employer should therefore have explained the financial consequences of this provision more clearly. Because this had not been done, the employer was not entitled to offset the study costs. If the employer had done so, the course could possibly have been offset.

Conclusion

In conclusion, it is important to know when a study costs clause is valid. Since 1 August 2022, reimbursement is not permitted for mandatory education. Strict conditions apply to non-mandatory education.

Do you have any questions about the study costs clause? We would be happy to help you.

The restart in bankruptcy: the Dutch scheme of arrangement, the share transaction and the asset transaction

Posted on by Michelle Sangers

After six years of hard work, he had to close his coffee shop. The pandemic, high rent and a few wrong decisions had taken their toll. A week after closing, he walked past the building and saw that everything was still there: the coffee machine, the chairs, and even the chalkboard with “Thursday: Apple Pie!”. With the help of a loyal customer who missed his cappuccino, the coffee bar made a restart. Same beans, same barista, but now with an accountant in the mix. That is how things can go.[1]

Private limited companies facing financial problems that threaten the survival of the company, but whose business activities are viable, may be suitable for a restart in bankruptcy. In this blog series, a “restart in bankruptcy” means a continuation of (part of) the company after bankruptcy, possibly within the same legal entity. In this blog, three forms of restart in bankruptcy are discussed: the Dutch scheme of arrangement, the share transaction in bankruptcy and the asset transaction in bankruptcy.

The Dutch scheme of arrangement

The company can enter into a form-free agreement with its creditors, often agreeing that the company will repay part of the debt to creditors and waive the rest. This is called offering a ” private bankruptcy arrangement” (onderhands akkoord). If creditors agree, the company’s bankruptcy is lifted. If creditors do not agree, the board or the trustee in bankruptcy can ask the court to adopt the bankruptcy arrangement. We call this homologatie (court approval). The agreement is then called a “compulsory composition” (dwangakkoord), because the creditors are “forced” to agree.

The Dutch scheme of arrangement has the advantage that it allows the company’s name recognition to be maintained, as do many favourable commercial contracts. In addition, creditors usually receive more money than in a liquidation, because the Dutch scheme of arrangement allows the bankruptcy to be settled relatively quickly. Of course, a bankruptcy arrangement does have to be financially viable. Creditors excluded from the compulsory settlement can also challenge it.

The share transaction in bankruptcy

A restart in bankruptcy could also take place when (at least) one shareholder (e.g. the holding company) transfers its shares in the insolvent company to a new shareholder. A share transfer has the advantage that the company’s name recognition and favourable commercial contracts can usually be retained. In doing so, be aware of so-called “change of control” provisions: these can cause an agreement to terminate.

It may be difficult to find a new shareholder willing to acquire the shares because, after all, he is taking over a company with known (and possibly unknown) debts. Moreover, to continue the company, he will have to make a capital injection, whether or not accompanied by a bankruptcy arrangement to restructure the company’s debts, or he will have to deposit the capital injection in the bankruptcy account of the trustee, who will then distribute.

The asset transaction in bankruptcy

Another way to restart in bankruptcy is by the trustee transferring the company’s assets to another entity that wants to continue the business. Due to the private company’s private nature, a transfer often takes place to sitting stakeholders. To transfer the assets, the trustee needs approval from the supervisory judge (rechter-commissaris). Once the asset transfer is completed, the bankruptcy of the selling company ends through dissolution or distribution.

The asset transaction is relatively attractive to potential buyers, as all unacknowledged liabilities basically remain with the bankrupt company. The downside is that the commercial loss for the company left behind is great as it ceases to exist, and with it its trade name.

Are you involved in an insolvent or bankrupt company and do you want to explore your options? Feel free to contact us. We are happy to explore the best solutions together.

[1] This story is fictitious.

Blog series: the legal positions of limited liability corporate bodies in times of financial hardship

Posted on by Michelle Sangers

This blog series covers the following blogs:

I. Introduction

  1. The pre-pack in the Netherlands;
  2. The WHOA;
  3. The restart in bankruptcy: the bankruptcy agreement, and the share and asset transaction in bankruptcy;
  4. The interests and duties of the proposed receiver and the bodies of the private limited company outside bankruptcy;
  5. The interests and duties of the receiver and the organs of the private limited company in bankruptcy;

II. The legal status of the management board and supervisory board

  1. at the pre-pack;
  2. at WHOA;
  3. to the bankruptcy agreement (faillissementsakkoord);
  4. in the share transaction in bankruptcy;
  5. in the asset transaction in bankruptcy;
  6. the legal position of the (prospective) receiver vis-à-vis the management and supervisory boards;

III. The legal status of the shareholders (meeting)

  1. at the pre-pack;
  2. at WHOA;
  3. to the bankruptcy agreement (faillissementsakkoord);
  4. in the share transaction in bankruptcy;
  5. in the asset transaction in bankruptcy;
  6. the legal position of the (prospective) receiver vis-à-vis the shareholders (meeting);

IV. The legal status of the works council

  1. at the pre-pack;
  2. at WHOA;
  3. to the bankruptcy agreement (faillissementsakkoord);
  4. in the share transaction in bankruptcy;
  5. in the asset transaction in bankruptcy;
  6. The legal position of the (prospective) receiver vis-à-vis the works council.

If you cannot wait for a specific topic to be discussed in this blog series, feel free to contact us. We will be happy to advise you.

The WHOA

Posted on by Michelle Sangers

If it is plausible that the company will not be able to continue paying its debts, the company can offer a settlement proposal to its creditors and shareholders under the Act for homologating a private agreement (Wet Homologatie Onderhands Akkoord: WHOA). When the court approves the agreement, creditors and shareholders are forced to cooperate with the agreement. This is called a compulsory settlement (dwangakkoord). The agreement aims to restructure the company’s debt (reorganisation settlement) or wind down its business in a controlled manner (liquidation settlement).

How does the WHOA procedure work?

In the Series the WHOA, you can read what the WHOA procedure looks like in outline and when – and by whom – a WHOA procedure can be started. You will also find a handy roadmap there: roadmap WHOA procedure. An initial evaluation of the WHOA procedure shows that it does indeed provide relief for ailing viable companies, but that there is room for improvement when it comes to awareness of the procedure and the costs involved.

What are the benefits of a WHOA procedure?

In this blog, we reflect on the benefits of WHOA proceedings for (the board of) the company and for creditors/shareholders, in the context of the blog series: the legal positions of limited liability corporate bodies in times of financial hardship.

Benefits of WHOA proceedings for (the board of) the company
  1. A major advantage of the WHOA for the company’s management is that (some) creditors/shareholders can be forced to cooperate in restructuring the company’s debt (reorganisation agreement) or in a controlled resolution of non-viable companies(liquidation agreement).
  2. Furthermore, there is a lot of freedom in the design of the agreement. For example, it is possible to restructure loans (e.g. via a debt for equity swap), cancel debts (partially) or adjust loan maturities.
  3. Not all creditors/shareholders need to be included in the arrangement. For those creditors/shareholders, the arrangement does not apply.
  4. During WHOA proceedings, a cooling-off period can be imposed, meaning that during that period creditors may not seize or take collection measures.
  5. Because the company can in principle continue to operate during a WHOA process, image damage can be mitigated and the value of the company maximised as much as possible.

Advantages of WHOA proceedings for creditors/shareholders
  1. In a WHOA, creditors/shareholders typically receive a higher distribution percentage than in bankruptcy.
  2. Creditors/shareholders have a say in the proceedings and can thus actively participate, vote against and object. They also receive information about the company’s financial condition. In bankruptcy, this is often not the case.
  3. Creditors/shareholders are relatively protected by the courts. For example, the court disapproves an agreement if the fulfilment of the agreement is insufficiently guaranteed (see section 384 Insolvency Act).
  4. Also, with a reorganisation agreement, there is a chance of preserving business relationships and employment by mostly keeping the company afloat.
  5. Because the company can, in principle, continue to operate during a WHOA proceeding, image damage can be limited and the value of the company preserved as much as possible.

If you would like to know whether the WHOA procedure could be of use to you, please feel free to contact us.

Employer found liable despite properly equipped workplace

Posted on by Charlotte Urlus

An ergonomically designed workplace, regular medical inventories, an office gym, chair massage and a “Great Place to Work” certificate. On paper, this employer seemed to have everything nicely in order. After all, the certificate underscores a focus on being a good employer and a healthyworkingenvironment. Yet the Arnhem-Leeuwarden Court of Appeal ruled that the employer was liable for the occurrence of RSI complaints in one of its employees.

Duty of care goes further

Can an employer be liable for RSI complaints (pain in hands, wrists, arms and shoulders, among others, due to repetitive, prolonged or unnatural movements) in a high-risk employee, even if the workplace meets ARBO standards? Yes. Compliance with those standards is not enough. The employer must ensure compliance with instructions and the proper design of the workplace, tailored to the employee. A concrete example of this can be seen in the case study below.

From workplace to courtroom

The employee in question had been employed since 1 July 2009 and most recently worked as a senior reporting & control specialist. He claimed that he had developed RSI complaints during his work. According to experts, the complaints were caused by prolonged screen work exceeding standards, high work pressure, inadequate rest, and poor posture, especially in the neck and shoulders.

In the first instance (ECLI:NL:RBMNE:2021:2666, ECLI:NL:RBMNE:2021:4197 and ECLI:NL:RBMNE:2023:1043), the subdistrict court ruled that the employee had made it sufficiently plausible that he had suffered (health) damage as a result of RSI complaints, and that these complaints had arisen during the performance of his work. The subdistrict court also ruled that the employer had not fulfilled its duty of care to prevent the health damage.

The employer appealed this ruling(ECLI:NL:GHARL:2025:281).

According to the employer, everything was in order

The employer argued that the employee had a lot of freedom in his work, the atmosphere was good, there was no structural overwork, he took daily breaks, hardly worked overtime and took regular holidays. According to the employer, this evidence showed that the complaints were not work-related.

In addition, the employer argued that they had fulfilled its obligations under Section 7:658 of the Civil Code. Under this article, an employer is obliged to ensure a safe working environment, including an ergonomically designed workplace. The employer must take the necessary measures, issue instructions and monitor compliance. According to the employer, this duty of care was met: the workstations were periodically medically assessed for ergonomic quality. Before reporting sick, the employee knew the ideal settings and could have supervised the correct application himself.

In addition, the employer highlighted its participation in the “Best Workplaces in the Netherlands” programme and its certification as a “Great Place to Work”. Employees could use a gym, table football and chair massage.

Duty of care requires customisation

The court disagreed with the employer. According to the court, the employer’s arguments do not change the expert’s conclusion that the RSI complaints arose during work. The RSI complaints were the result of exposure to screen work exceeding the applicable standards in the Working Conditions Decree , a high perceived work pressure, insufficient rest periods and a neck and shoulder region that was insufficiently relaxed due to the work posture. According to the court, it is plausible that the RSI complaints arose during the employee’s work.

In addition, the court held that the employer had not fulfilled its duty of care under Section 7:658 of the Civil Code. The court of appeal found that the employer did not dispute that the employee – given his limitations and the nature of his work – ran an increased risk of developing RSI complaints. Nor was it disputed that the employer had to take specific measures for this employee. Nor did it appear that the employer alternated work at a monitor with other work or rest time. As required under Article 5.10 of the Working Conditions Decree.

Moreover, the employer knew that the employee had a congenital disability and that it was difficult for him to leave his workplace to take rest periods. The court ruled that the employer had to ensure the workplace was properly set up and sufficient rest was taken. According to the court, the chair massage and fitness facilities for this employee were not targeted measures to prevent RSI complaints. This is especially true as the employee repeatedly stated that chair massage and fitness are not accessible or effective for him due to his limitations.

The court rejected the employer’s defence that the employee himself could have indicated what he needed and that he ‘did not want to be treated differently from colleagues’. According to the court, the employer must set the workplace correctly and ensure sufficient rest moments for the employee. Even if an employee indicates he does not want to be treated differently from colleagues, the duty of care remains undiminished.

What insights does this case offer for employers?

This ruling underlines once again: the duty of care is not a one-size-fits-all concept. A well-equipped workplace and general facilities are important, but not always sufficient. When there is an increased risk of health complaints, the employer must do more than just take general measures. In this case, that meant: specific measures tailored to the employee.

Do you have questions about your duty of care as an employer or about reducing health risks within your organisation? Feel free to contact us. We will be happy to think with you about how to limit your risks.

Wage sanction: non-compliance with reintegration obligation

Posted on by Iris Taling

An employee is entitled to continued payment of wages during the first two years of illness (104 weeks). During this period, the employee and employer must make efforts towards reintegration. When an employee does not fulfil his reintegration obligations, an employer can impose a wage sanction. Non-compliance with the reintegration obligations occurs, for example, if the employee cannot be reached, does not show up at the company doctor’s office, does not cooperate in drawing up the action plan or refuses to perform suitable work.

If an employee does not comply with his reintegration obligations, an employer must take various legal steps, depending on the (manner of) violation of the reintegration obligations. This blog discusses the different possibilities for an employer to proceed with a wage sanction. If an employee does not fulfil his reintegration obligations after this, this may even ultimately lead to dismissal.

Official warning

An official warning can be used to send a first signal to the employee. This concerns situations when a violation of the reintegration obligation is not (yet) evident, justifying a suspension or stop in pay. The written warning states the facts that (possibly) indicate a violation of the reintegration obligation. An employer may state in the warning that a wage suspension or wage freeze will be applied in case of repetition. An official warning may be given before a wage suspension or wage freeze, but this is not mandatory.

Suspension of wages

Under Article 7:629(6) of the Civil Code, the employer may suspend the employer’s wages if the employee violates written control regulations. These control rules allow the employer to check whether the employee is actually sick. Consider the situation where an employee fails to show up at the appointment with the company doctor or if the employee is unreachable for the employer and the company doctor. An employee must inform the employer at what times he is hard to reach due to a medical appointment, for example, so that the employer can take this into account.

The salary suspension is intended as a means of pressure. Once the employee still complies with the monitoring requirements, he is entitled to continued wage payment for the period that wages were suspended. There is thus a right to retroactive wage payment.

Wage stop

Article 7:629(3) of the Civil Code lists six cases in which the employer can stop the employee’s wages. Some examples are: deliberately causing the illness, hindering or delaying recovery, refusing to perform suitable work and refusing to cooperate with reasonable reintegration instructions. A wage freeze can also be applied without first imposing wage suspension.

The moment an employee fully meets his reintegration obligations again, the wage freeze must be lifted immediately. The part of the salary that has not been paid does not have to be repaid. This differs from wage suspension, where wages are temporarily suspended.

But first: the duty to warn

Under Article 7:629(7) of the Civil Code, the employer has a duty to warn. This means that an employer is obliged to inform the employee of the reason for the wage freeze or wage suspension within a reasonable period of time. An employer must make it clear that it is a wage freeze or wage suspension. An employee must have clarity about his right to pay as soon as possible so that he can take timely action. If the employer fails to fulfil this warning obligation, there is a risk that the employee may still be entitled to the withheld wages.

Termination or summary dismissal?

Violation of reintegration obligations may lead to termination of the employment contract due to culpable acts or omissions (the e-ground). It follows from case law that dissolution is only possible if the employer has given written notice to comply with the reintegration obligations. Also, an employer must first have tried other sanctions, such as suspension of salary or a wage freeze. It also follows from case law that a request for a termination must be rejected if an expert’s statement is missing, unless the submission of this statement cannot reasonably be required of the employer. Only if these conditions are met does the prohibition on giving notice during illness lapse and the employment contract can be dissolved.

A summary dismissal for violation of the reintegration obligations is less likely. In a recent case before the Court of The Hague, the court upheld the prevailing doctrine that summary dismissal is an ultimum remedium. This means that lesser measures, such as a wage sanction or dissolution of the employment contract, should be imposed first. A summary dismissal is often only possible if there are additional special circumstances. Think, for instance, of an employee who repeatedly fails to comply with his monitoring instructions, neglects agreements made and is unavailable to the employer for a long period of time.

Conclusion

It is good to keep in mind the different wage sanctions when an employee does not comply with his reintegration obligation. We regularly deal with cases in which wage sanctions are imposed. Do not hesitate to contact us. We will be happy to think along with you about the right wage sanction.

The pre-pack at the private limited company in the Netherlands

Posted on by Michelle Sangers

The pre-pack is a special form of restart in the Netherlands inspired by the pre-packaged administration from the UK. If a private limited company runs into financial difficulties and bankruptcy is suspected to be inevitable, the company (often the management board) can start a pre-pack procedure. This procedure involves a prospective administrator (beoogd curator) preparing an asset transaction before bankruptcy that will take place in bankruptcy.

How does the pre-pack work in the Netherlands?

Although there is no legal basis for the pre-pack procedure in the Netherlands, the vast majority of courts in the Netherlands are sympathetic to it. The legislator aims to give the pre-pack a legal basis soon through the Business Continuity Act I bill.

As a rule, (the board of) the private limited company facing imminent bankruptcy requests the court to quietly appoint a prospective administrator. A prospective administrator has a similar task to that of an administrator: it has to look after the interests of the company’s joint creditors. If the application is granted, the court chooses a prospective administrator from its list of administrators and sets this prospective administrator a deadline (often 11 to 15 days) in which the prospective administrator has to investigate an arrangement outside bankruptcy or a restart in bankruptcy. In the period before bankruptcy, the company retains full power of management and disposition, which means the prospective administrator can only act with the company’s consent.

After preparation, the company files for bankruptcy and the (prospective) administrator submits its final report to the court registry, after which the asset transaction is carried out with the permission of the supervisory judge (de rechter-commissaris).

Reasons to opt for a pre-pack

In a pre-pack, the asset transaction in bankruptcy can take place in the blink of an eye because it has been quietly prepared. As a result, to the public, the company never appears to have been bankrupt. This is advantageous because customers and creditors of the company do not lose confidence in it as a result. This results in value maximisation and preservation of (part of) goodwill, which is a big advantage for companies with a strong brand name or intellectual property. Moreover, the pre-pack usually costs less money and time than a ‘normal’ bankruptcy.

However, the pre-pack in its current form has caused quite a few labour law headaches with regard to the doctrine of transfer of undertaking: for a long time, it was unclear whether or not employees could be dismissed in a pre-pack. With the Transfer of Undertaking in Bankruptcy Bill, the legislator aims to remove these headaches and regulate the employment-law consequences of the pre-pack.

Are you curious about what the pre-pack can do for you or what other actions you can take in the event of a company’s financial difficulties? Feel free to contact us. We will be happy to advise you.

This blog is part of the series Blog series: the legal positions of limited liability company organs in times of financial hardship.

The settlement in bankruptcy

Posted on by Fleur Diderich

When a bankruptcy has been declared and it cannot formally be reversed, there is still a possibility to escape the usual winding-up of the bankruptcy. That option consists of offering a settlement to creditors. A settlement may offer creditors a better outcome than a complete liquidation of the estate. In this blog, we discuss the procedure, the relevant articles of law and the advantages and risks related to offering a settlement in bankruptcy. We also discuss the difference between the bankruptcy settlement and the WHOA.

What is a settlement in bankruptcy?

A settlement in bankruptcy is an arrangement under the Bankruptcy Act (FW) in which the bankrupt makes a proposal to his creditors to pay part of the debts, usually against final discharge of the residual debt.

The procedure

Offering a settlement in bankruptcy proceeds in several stages:

  1. Drawing up the settlement (art. 138 Fw): the bankrupt or a third party draws up a proposal describing what percentage of claims will be paid to creditors and under what conditions.
  2. Deposit draft settlement (art. 139 Fw): the bankrupt shall deposit a draft settlement at the court registry at least eight days before the meeting of creditors, while simultaneously sending it to the trustee.
  3. Trustee’s advice(art. 140 Fw): the trustee assesses the settlement and gives advice to the creditors and the supervisory judge).
  4. Voting by creditors(Section 145 Fw): at the meeting of creditors, the settlement is voted on. The settlement is adopted if more than half of the voting creditors vote in favour, and these creditors represent at least half of the total debt).
  5. Approval by the court(art. 150-157 Fw): if the required majority agrees, the proposal is submitted to the court for approval. The court assesses whether the settlement is fair and lawful. If approved, the settlement becomes binding on all unsecured creditors.

Advantages and risks of a settlement in bankruptcy

A bankruptcy settlement has the advantage that, as a rule, a higher distribution to unsecured creditors can be realised than with an ordinary winding-up of the bankruptcy. The bankruptcy can also be finalised faster, and part of the bankruptcy costs can be saved. Finally, a settlement offers the possibility for the debtor to continue with a clean slate and to continue the (restructured) business within the same legal entity.

A bankruptcy settlement does not always provide the desired solution. For instance, the agreement may fail because the required majority is not achieved, the court may refuse the approval because the settlement seems unreasonable or unfair, and the settlement only applies to unsecured creditors, allowing, for instance, pledge and mortgage holders to continue exercising their rights.

Difference with WHOA

A settlement in bankruptcy is not the same as a WHOA agreement, which can be offered outside bankruptcy to prevent imminent bankruptcy.

Since the entry into force of the WHOA on 1 January 2021, there is an additional possibility to restructure debts without bankruptcy. The main differences between a WHOA agreement and an agreement in bankruptcy are:

FeatureSettlement in bankruptcyWHOA agreement
Legal basisSections 138-161 FwSections 370-387 Fw
SituationOnly during bankruptcyOutside bankruptcy, in case of impending insolvency
CreditorsUnsecured creditors onlyAll classes of creditors and shareholders
Jurisdiction of receiverPlays a role in assessmentNo trustee involved
TargetSettlement of bankruptcyPreventing bankruptcy

Both tools can be useful, depending on the company’s situation.

Conclusion

A settlement in bankruptcy offers bankrupts and creditors a chance for a more favourable settlement than a complete liquidation. However, the legal framework of the Bankruptcy Act imposes strict conditions on the procedure, including creditor and court approval.

Do you have questions about offering a settlement in bankruptcy or are you facing a settlement as a creditor? If so, please contact us. Wieringa Advocaten is happy to assist you.

Dutch Supreme Court: whistleblower

Posted on by Annemarie Buwalda

On February 7, 2025, the Dutch Supreme Court issued its first ruling on the Whistleblower Protection Act (Wbk). The ruling focuses on the presumption of evidence regarding the prohibition of disadvantage in the Wbk. The Supreme Court clarifies that, to rebut this presumption of evidence, the employer cannot merely rebut the causal relationship between the report and the disadvantage but must prove the opposite.

The Whistleblower Protection Act

The Wbk implements Directive (EU) 2019/1937 (“the Whistleblower Directive”) and aims to provide more protection to employees who report (suspected) wrongdoing in the workplace. Our other blog about the Wbk provides further explanation of the law.

The prohibition of disadvantage is included in Article 17e of the Wbk. This article states that a person who reports or discloses suspected wrongdoing – a whistleblower – must not suffer any disadvantage from this. When the whistleblower nevertheless experiences adverse consequences after making a report or disclosure, it is presumed that this disadvantage is the result of the report, as stated in Article 17eb of the Wbk.

It is then up to the employer to rebut this presumption. However, it was unclear how the employer should do this. Is it sufficient to merely rebut the presumption, or must the employer prove that the disadvantage is not a result of the report? The Supreme Court clarifies this in this ruling.

Background of the case

The case involved a dispute between an employee, the appellant in cassation, and the employer, the Omgevingsdienst IJsselland. The Omgevingsdienst wanted to terminate the employee’s employment agreement and went to the subdistrict court. However, the employee had previously reported suspected wrongdoing at the Omgevingsdienst, which would make the prohibition of disadvantage applicable. According to the subdistrict court, the termination request related to facts and circumstances that had occurred before the wrongdoing report, meaning the prohibition of disadvantage did not apply. Therefore, the employment agreement could be terminated by the subdistrict court.

The Court of Appeal ruled similarly, after which the employee appealed to the Supreme Court. The employee complained that the Court of Appeal failed to recognize that the Omgevingsdienst could not suffice with merely rebutting the presumption of evidence that there was a connection between the report and the termination request, and that the Omgevingsdienst should have provided proof of the contrary.

Supreme Court’s Ruling

The Supreme Court rejects this complaint. The Supreme Court considers in paragraph 4.4 that multiple passages in the legislative history of Article 17eb Wbk indicate that the legislator intended for the employer to prove that the disadvantage is not a result of the report, and that it is therefore up to them to prove that the disadvantage occurred on grounds other than the report. According to the Supreme Court, the rule of evidence laid down in Article 17eb Wbk must therefore be understood to mean that the employer cannot suffice with merely rebutting the presumption of a causal relationship between the report and the measure to counter the statutory presumption of evidence, but must prove the opposite. The fact that the term ‘ontzenuwen‘ (rebut) was used in this context in the legislative history of Article 17eb Wbk does not affect this, according to the Supreme Court.

Unfortunately for this employee, the appeal is rejected. According to the Supreme Court, the complaint was based on an incorrect reading of the contested ruling. The employee’s complaint stated that the Omgevingsdienst should have provided proof of the contrary. The Supreme Court explains that the Court of Appeal’s ruling means that the Omgevingsdienst did not merely rebut the presumption that there was a causal relationship between the report and the termination request but proved the opposite. And this is exactly what the Omgevingsdienst, according to the complaint, should have done.

Mandatory address title for online purchases: permitted or not?

Posted on by Joost Kokje

When shopping online, customers are often required to choose an address title, such as “Mr” or “Ms”, prior to placing an order. The Court of Justice of the European Union recently ruled that this obligation when making an online purchase may be in breach of the General Data Protection Regulation (GDPR). What does this mean for online shops and the ordering process?

Is an address title really necessary?

This case involved SNCF Connect, a subsidiary of the French railway company SNCF that sells train and transport tickets. Customers had to provide an address title when making a purchase. French association Mousse took the matter to court, claiming that this obligation did not comply with the AVG. The complaint was initially rejected by the French data protection authority, the Commission nationale de l’informatique et des libertés (CNIL). Mousse then turned to France’s highest administrative court, which in turn referred preliminary questions to the Court.

The court then held that processing an address title for personalised communication based on gender identity is not necessary for:

  1. the performance of an agreement. Indeed, a title of address is not necessary to enable the proper performance of a rail transport agreement.
  2. the legitimate interest of the railway undertaking. SNCF Connect considered direct marketing to be a legitimate interest for requesting address titles. However, the processing of the address title must be necessary to pursue that interest, which is not the case here, partly because the processing of gender identity is not strictly necessary for commercial communications.

Data minimisation

Besides the lack of a legitimate basis, the principle of data minimisation also plays a significant role. SNCF may not process more personal data than is strictly necessary for the purpose for which it is collected. Thus, the mandatory entry of an address title without clear necessity violates this principle. In this case, SNCF Connect could easily have used inclusive forms of address unrelated to gender identity, such as “Dear Customer” or “Dear Traveller”.

What are the consequences?

The Court’s ruling has direct implications for online shops in the EU. If personal data are compulsorily requested for a certain purpose without being necessary to achieve that purpose, there is a breach of the AVG. Companies must therefore look critically at personal data that is collected. If a personal data is not necessary, it should simply not be compulsorily requested.

Tips for online retailers

What can web shops learn from this? Three practical tips:

  1. Think critically about what data you really need. In many cases, processing a name, address, e-mail address and payment information is sufficient for an online purchase.
  2. If you do want to incorporate an address title, for example to tailor the salutation of emails to the customer’s needs, make this field optional. Don’t force customers to make a choice.
  3. Have the ordering process scrutinised by a specialist to avoid violating the AVG and other rules.

Conclusion

The mandatory entry of an address title may seem like a minor detail, but without necessity it can have unwanted consequences. This ruling underlines the importance of data minimisation; personal data are only lawfully processed if the processing is necessary for the purpose to be served.

Sure if your webshop is AVG-proof? Then feel free to get in touch.