Terminating an employment contract due to changes at work is common, but not at the initiative of the employee. In this article, we discuss a recent example from our practice and explain what this can mean for you as an employer.
What does dissolution due to changing circumstances mean?
Termination of an employment contract due to changed circumstances means that the employer or employee can request the court to terminate the employment contract, because the situation at work has changed to such an extent that cooperation is no longer possible. This can happen due to long-term illness, conflicts, reorganisations or changes in the function. In that case, the court will also decide whether a termination payment must be paid and what a reasonable amount is.
A recent example: The case of an assistant manager
Let's look at a recent case study from Curacao. An assistant manager had been working for the same employer for 35 years. In June 2023, the employee became disabled and ended up at home with a burnout. Due to years of work-related tensions, the employee no longer felt like returning to the workplace.
Before taking legal action, the employee, with the help of her lawyer, attempted to terminate the employment contract by mutual consent. The employer rejected this request in early 2024.
To the judge
As no solution was found, the employee went to court. She asked the court to terminate the employment contract and to award her reasonable compensation for the termination of the employment. The employer filed a counterclaim, in which she demanded that the employee resume her work via a reintegration program.
Judgment of May 24, 2024 of the Court of First Instance of Curaçao
The employee stated that the employer had been guilty of conduct that had irreparably disrupted the employment relationship. The employer denied this and believed that it was unclear why the employee did not want to return and had suffered a burnout.
The Court held that it was clear from the evidence and the oral hearing that the cooperation between the two parties was no longer possible. The employee had not worked for a year and did not want to resume. The Court therefore decided to terminate the employment contract.
Fair (reasonable) compensation
After the decision to terminate the employment contract, the Court had to determine who was responsible for the disturbed working relationship. The employee claimed that the intimidating behavior and the unilateral changes to her employment contract by the employer were the cause. The employer denied this.
The Court ruled on the basis of the evidence that the employer was indeed negative and derogatory towards the staff and that the employer's actions did not demonstrate good employership. Therefore, a fair (reasonable) compensation was awarded to the employee.
Taking into account the employer's financial situation, a gross compensation of over Naf 100,000 was awarded.
What does this mean for you?
What we often see in practice is that conflicts escalate because parties are not prepared to enter into a dialogue with each other. In the case of this case, the employer would have achieved more by opting for a negotiation process instead of prematurely rejecting the employee's proposal for termination.
Employees can also ask the court to terminate the employment contract due to changing circumstances. The court will then not only rule on the termination, but also on whether a fair compensation is appropriate. As an employer, you would therefore be wise not to end the conversation prematurely, but to seek careful advice and to weigh your options and costs/benefits.
Is your organization dealing with a conflict in the workplace? Or would you like more information about the possibilities for terminating an employment contract? At Wildeman, we offer you strategic advice and help you make a considered decision, so that you do not lag behind the facts. Contact us for the possibilities.
We are happy to help you.
About the authors
Didi Wildeman
