Alternating successive employment contracts for a definite period and replacement contracts

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Date:
29 Jun 2021

In a recent judgment, the Constitutional Court ruled that the principle of equality enshrined in Articles 10 and 11 of the Constitution is violated when, after more than two years of uninterrupted employment through alternating successive employment contracts for a definite period and replacement contracts, an employee does not benefit from the presumption of employment based on an employment contract for an indefinite period.

Facts

An employee, who had been in continuous employment since 2001 under alternating successive employment contracts for a definite period and replacement contracts, was dismissed in October 2017 and paid severance pay equal to his salary until the foreseen expiry date of his last ongoing contract, which was 31 December 2017. The employee contested this amount claiming additional severance pay in accordance with the rules for contracts for an indefinite period, as in his opinion there had been an employment contract for an indefinite period since 2001. 

The employer rejected this claim and argued that, according to a strict reading of the legal provisions, the presumption of employment on the basis of an employment contract for an indefinite period only applies if the employee is employed on the basis of either successive employment contracts for a definite period or successive replacement contracts of which the combined duration in principle exceeds two years. According to the employer, the presumption does not apply in case of a succession of employment contracts for a definite period and replacement contracts that alternate.

The employer was proven right in first instance and the claim was therefore rejected as unfounded. The employee appealed. In the appeal proceedings, the Labour Appeal Court accepted this strict interpretation. However, the Labour Appeal Court questioned the compatibility of this strict interpretation of Articles 10 and 11b, §1, fifth paragraph of the Act on Employment contracts) (AOW) with Articles 10 and 11 of the Constitution and consequently submitted a preliminary question to the Constitutional Court.

Decision

As mentioned above, the presumption of employment on the basis of an employment contract for an indefinite period does not apply when successive employment contracts for a definite period and replacement contracts, whose combined duration exceeds two years, alternate.

According to the Constitutional Court, such an interpretation is not compatible with the ratio legis of the law, which is to ensure job stability and to protect the employee against abuse of successive employment contracts for a definite period or successive replacement contracts by the employer. Thus, the Constitutional Court does not consider it reasonable for the presumption of employment for an indefinite period not to apply in the case of alternating successive employment contracts for a definite period and replacement contracts.

The Constitutional Court therefore considers that there has been a violation of the principle of equality and has instructed the legislator to amend the law. In the meantime, the courts are given the task of addressing the unconstitutionality found by applying the legal provisions for employment contracts for an indefinite period to employees in a similar situation.

Action point

Be vigilant in the event of successive employment contracts for a definite period and replacement contracts. Even if this succession now complies with the provisions of the Act of 3 July 1978, a court could consider, depending on the circumstances, that there is nevertheless a presumption of employment based on a single contract for an indefinite period, in view of the recent decision of the Constitutional Court mentioned above.