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Terms of employment

Terms of employment are all terms agreed between employer and employee

Terms of employment are all terms agreed between employer and employee when entering into the employment contract. Employment terms are usually laid down in an employment contract, company regulations and/or collective labour agreement.

Although these are not legal terms, a distinction is often made between primary terms of employment, secondary terms of employment and tertiary terms of employment. So, what do they mean?

Primary terms of employment

The primary terms of employment are, as it were, the core agreements in the employment contract. Think of the salary and the position. Also the number of hours an employee works per week and the 13th month can be seen as the primary terms of employment.

Secondary terms of employment

Employment terms such as an expense or travel allowance, a pension scheme, a bonus scheme, a lease or company car and a company telephone are often referred to as secondary terms of employment.

Tertiary terms of employment

Tertiary terms of employment are terms of employment that do not really belong to the primary and secondary terms of employment. Think of (the offerings in) the company restaurant and (the facilities around) the workplace.

Amending terms of employment

The starting point is that agreements must be honoured. Therefore, in general, agreed terms of employment cannot be amended unilaterally by the employer without the consent of an employee.

Whether or not it is possible to amend terms of employment depends, among other things, on the agreements made in this respect, whether primary, secondary or tertiary terms and conditions of employment are amended and the employer’s reason for amending.

Unilateral amendment clause

A so-called unilateral amendment clause may be included in the employment contract. By including such a clause, the terms of employment can be amended unilaterally (and therefore without the consent of the employee), but only if the employer has such an ‘overriding interest’ that the employee’s interest in the terms of employment remaining the same must deviate from the standards of reasonableness and fairness. An overriding interest may lie, among other things, in poor economic conditions. It follows from case law that an overriding interest is not rapidly accepted.

No unilateral amendment clause

If a unilateral amendment clause is not agreed upon, the main rule is that agreement must be reached with the employee on the amendment to be implemented. However, an employee may not withhold his consent in all cases.

A good employer is expected to carefully examine whether his amendment proposal is necessary and whether the proposal is reasonable. An employee may then only reject this proposals if “acceptance cannot reasonably be required of him”.

In short, whether or not an unilateral amendment clause has been included, it will always be considered whether, given the circumstances, the proposal is reasonable. The consent of the works council on the proposal (if present) may be important in this respect. The proposal will sooner be regarded as reasonable if the works council agrees with it. This also applies to the presence of a phasing-out scheme or transition scheme so that the employee is not confronted with the change from one day to the next. Think of a phasing-out scheme in which a certain allowance is reduced in monthly steps to the level desired by the employer or a transition period of a number of months so that the employee has time to prepare for the change in his working hours.

Good communication is very important when amending terms of employment. This can help to create support for the amendment. Talk to the works council and the employees about the necessity of the change and what the consequences will be for them. (Timely) Consultation can prevent a lot of turmoil and resistance to the change.

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