On 18 July 2025, the Dutch Supreme Court issued its first ruling on the "i-ground" for dismissal, a significant development in employment law. The i-ground was introduced in 2020 under the Labour Market in Balance Act as an additional ground for dismissal. It allows for the termination of employment based on a combination of multiple, partially fulfilled grounds, such as underperformance, misconduct or a disrupted working relationship. This ruling clarifies the application of the i-ground, emphasising the need for courts to provide thorough reasoning and to take into consideration the employer's legal duty to explore employee reassignment.

Combination of grounds for dismissal

The case was brought by an employee of Profoto B.V. and revolved around a series of events leading to the employee's dismissal and subsequent legal proceedings.

The employee joined Profoto in 2018 as an image-processing developer, relocating to the Netherlands for the position. His employment terms included adherence to Profoto's personnel handbook. When the employee requested holiday leave for December 2022 and January 2023, his manager initially approved this. But the employee later altered his holiday plans and travelled to Iran, where he called in sick and asked that his holiday leave be converted to sick leave. Intending to work remotely, the employee had taken a camera belonging to Profoto to Iran. This led to a series of communications with his manager about returning the camera. Profoto issued a written warning to the employee for working remotely without permission, taking the camera with him to Iran, and not following his manager's instructions. The employee was eventually dismissed with immediate effect on 30 January 2023, for multiple reasons, including unauthorised absence and failure to return the camera.

Legal proceedings

The employee contested his instant dismissal before a subdistrict court. The court annulled the instant dismissal, but terminated the employment contract on the grounds of misconduct (e-ground) with effect from 1 August 2023. In the appeal proceedings, the court of appeal ruled that the dismissal on the grounds of misconduct (e-ground) was invalid, but upheld the termination based on the i-ground. This latter ground combines multiple, partially fulfilled grounds for dismissal, in this case misconduct and a disrupted working relationship (e- and g-ground).

The Supreme Court found that the court of appeal had inadequately assessed whether Profoto had fulfilled its obligation to reassign the employee before opting for dismissal. The ruling highlights the need for courts to meticulously evaluate the combination of grounds for dismissal and ensure that reassignment within the company is not feasible.

Highlights

According to Stefan Sagel, who litigated the case[ES1] before the Supreme Court on the employee's behalf, the ruling highlights three key points:

1. Reasons for the decision: the Supreme Court emphasised the need for courts to clearly set out the combination of grounds that justify dismissal. In this case, the court of appeal found that the lower court had failed to specify the nature of the alleged misconduct (e-ground), which was part of the grounds for dismissal.
2. Reassignment obligation: before dismissing an employee based on the i-ground, employers must demonstrate that reassignment within the company is not possible. The Supreme Court stressed the importance of fulfilling this obligation.
3. Application of the i-ground: according to the Supreme Court, judges can apply the i-ground and award additional compensation (amounting up to 50% of the statutory transition payment) "ex officio", so even if the employer has not requested termination on this basis or if the employee has not requested being awarded the additional compensation. If the court of appeal decides to apply the i-ground and award additional compensation, the employer must be given the opportunity to withdraw its request to the court to rescind the employment agreement. If the employer does so in a scenario where the court of first instance dissolved the employment agreement, but on a different ground (that the court of appeal considers inapplicable), the court of appeal can restore the employment agreement or grant the employee equitable compensation (pursuant to article 7:683 (3) of the Dutch Civil Code).

Insights

This ruling offers valuable insights for companies navigating the complexities of an i-ground dismissal, such as the importance of comprehensive documentation. It is essential to properly document and clearly express all reasons for dismissal, especially when the dismissal is based on a combination of partially fulfilled grounds. This includes providing evidence of any attempts to reassign the employee within the company.

[ES1]the Supreme Court case?