If an employee engages in misconduct, this may, under certain conditions, constitute grounds for termination due to culpable acts or omissions. But when is conduct serious enough to justify termination? And what are the consequences for the employee?
When does culpable conduct apply?
Culpable conduct occurs when an employee behaves in such a way that the employer cannot reasonably be expected to allow the employment contract to continue. It therefore refers to conduct that is serious enough to justify termination.
Examples include theft, fraud, breach of confidentiality, or refusing to perform work without good cause. Failure to fulfill other important obligations may also, under certain circumstances, constitute grounds for termination. What qualifies as culpable conduct always depends on the circumstances of the case. While one instance of theft may be sufficient grounds for termination, another may not.
The employee’s position and the consequences for the employer also play a role in determining whether the employee’s conduct is sufficiently culpable. The higher the position, the more can generally be expected of an employee. The greater the consequences for the employer—such as reputational damage—the more likely the conduct will be deemed culpable.
Another factor is whether the employee knew that certain behavior was not permitted. Often, an employee handbook or personnel policy specifies what behavior the employer will not accept. Sometimes, these documents even adopt a zero-tolerance policy. The employee may then be aware that violating these rules is not permitted, making it more likely that a violation will be considered culpable conduct. Establishing such rules and their consequences is therefore an important starting point in preventing culpable conduct.
Reassignment in Cases of Culpable Conduct?
In principle, when terminating an employee’s employment, an employer must first determine whether reassignment to another suitable position is possible. However, in the case of termination due to culpable conduct, reassignment is in any event out of the question. An attempt at reassignment is therefore not required under this ground for termination.
How can the employer terminate the employment contract?
If an employer wishes to terminate the employment contract due to the employee’s culpable conduct, the employer must file a petition for termination with the subdistrict court. In this petition, the employer must substantiate why the employment contract must be terminated due to the employee’s conduct. The subdistrict court will then assess whether the conditions for termination have been met. In doing so, the subdistrict court will also determine whether any prohibition on termination —such as due to illness or pregnancy—prevents the termination.
What are the consequences for the employee?
If the subdistrict court terminates the employment contract, it determines when the contract ends. In principle, the applicable notice period is taken into account. The employee is also entitled to the statutory transition allowance and, in principle, is eligible for unemployment benefits.
The above does not apply if the employee has acted not only in a culpable manner, but also in a seriously culpable manner. If the court rules that the severity of the employee’s misconduct can be classified as seriously culpable, then the employee is not entitled to the statutory transition allowance, their entitlement to unemployment benefits is at risk, and the court may choose to terminate the employment contract immediately, without regard to the notice period.
The standard for “serious culpability” is higher than that for the standard ground for termination based on culpable conduct. Therefore, it is not the case that an employee automatically loses their transition payment in every instance of termination due to culpable conduct.
Right to fair compensation?
Just as with any other ground for termination, the employee may be entitled to fair compensation if the employer acted with serious culpability in connection with the termination. This applies both when a court rules that the termination is justified but the employer acted with serious culpability, and when the termination is unjustified and the employee accepts the termination.
Immediate termination or termination due to culpable conduct?
Conduct or negligence for which the employee is at fault should not be confused with immediate dismissal. Although both forms of termination relate to misconduct by the employee, different rules and consequences apply. For example, termination due to culpable conduct does not require that it take place immediately (as soon as possible), whereas summary dismissal does. Furthermore, summary dismissal requires that there be an urgent reason. Not every instance of culpable conduct constitutes an urgent reason.
There is also a difference in the procedure for termination. Dismissal for misconduct can only take place with the court’s approval, whereas summary dismissal does not require such approval and is reviewed by the court only after the fact—if the employee disputes the dismissal.
In some cases, both forms of termination are an option, and the employer can therefore choose between them. It is advisable to seek legal advice on this matter, as both forms entail their own conditions, consequences, and risks.
Settlement Agreement (VSO)
Instead of seeking termination through the courts, the employer and employee can attempt to reach a settlement agreement. Of course, the employee must agree to this. The parties then reach agreements on matters such as the termination date and severance pay. The wording of the settlement agreement can affect the right to unemployment benefits.
What does this mean for employers and employees?
Dismissal for misconduct requires careful consideration. It is important for employers to thoroughly document the behavior and clearly explain why it is no longer acceptable.
Employees would be wise not to accept a termination offer without further consideration. Whether the conduct actually constitutes grounds for termination and what financial consequences are associated with it depends heavily on the circumstances.
Do you have questions about termination for cause or a potential dispute with a (former) employee? Our employment law attorneys are happy to advise employers and employees on their rights and options.
