The Social Insurance Bank (hereinafter: SVB) is responsible for implementing national health insurance in Curaçao. Due to the financial results of 2020 and the economic situation on the island, in which the government is going to cut back on employment conditions, the SVB is obliged to apply cutback measures. The management has therefore asked the service group members whether they agree with the proposal regarding the cutback on employment conditions. The service group members have indicated that they have no objection to this. By letter dated 19 January 2021, the service group informed the SVB staff of the decision. On 22 May 2022, SVB announced that the cutbacks will also apply for the years 2022 and 2023.
Of the 270 employees, 17 objected to the austerity measures. A meeting with management was the result of this opposition. The opposition was stopped. However, on October 13, 2022, an employee filed a petition to declare that the SVB is not authorized to unilaterally reduce the employment conditions.
On 21 February 2023, the court ruled on this request. In support of its judgment, the court took into account a ruling by the Supreme Court (Stoof-Mammoet criteria). The ruling by the Supreme Court formulated a standard regarding the authority of an employer to change/adjust the individual employment relationship.
In its review of the Supreme Court's ruling, the court took into account the fact that the SVB has been in a deteriorating financial situation for years, long before the COVID pandemic.
During the pandemic, the Curaçao government called on the Netherlands for budget support. The Netherlands provided this support under various conditions, including the National Ordinance on the reduction of employment conditions. This also includes SVB staff. It is therefore clear that SVB considered itself bound by this austerity objective and wanted to achieve it in this way. The court considered it reasonable, under the given circumstances and the fact that its own staff constitute a large part of the administrative costs, that the mandatory reduction should be paid via the staff.
The SVB board also passed over several alternatives to achieve the cutbacks objective. The other measures were all considered less desirable than the measure that was ultimately decided upon.
In addition, in 2021, SVB was also confronted with a demand from the government of Curaçao that SVB's management costs should be reduced by 23%. Since the objections to the measures in 2021 had been opposed, SVB decided to extend the measures for 2022 and 2023. The measures introduced had an effect.
Under all given circumstances, the court ruled that the austerity measures can be upheld by reviewing the Supreme Court's ruling. This is because there are very exceptional circumstances. SVB's already deteriorating financial situation had been severely affected by the COVID pandemic, making measures unavoidable. After all, SVB also weighed up various austerity measures before making the decision. Moreover, the reduction of employment conditions fell within the very broad framework of austerity measures within SVB. The court considers the proposal reasonable and is of the opinion that acceptance can reasonably be expected from the employees. Especially if it is taken into account that the external austerity pressure has increased in 2022 and the financial position of SVB has not improved. The applicant's requests are therefore rejected.
Changing employment conditions is and remains an important topic. Especially due to the COVID pandemic, we see that many companies, including government bodies, have come under financial pressure. Whether or not an employee's consent is required for changes that affect them financially, is always a matter of weighing up all the circumstances of the case. This ruling has made us aware of this necessary balancing of interests.
The location of the full statement is:
https://uitspraken.rechtspraak.nl/#!/details?id=ECLI:NL:OGEAC:2023:19
The location of the Supreme Court's decision is:
https://uitspraken.rechtspraak.nl/#!/details?id=ECLI:NL:HR:2008:BD1847