Calculation of the notice period and the Unified Status Act. Update following a judgment by the Constitutional Court.
Principles of the calculation of the notice period
For employees whose period of continued service started before 1 January 2014, the notice period will be calculated in two steps: a calculation must be made for the period (i) until 31 December 2013 on the one hand, and (ii) as of 1 January 2014 on the other hand.
For the first step, the length of the notice period of a white collar worker depends on the yearly gross remuneration:
- If on 31 December 2013 the white collar worker’s annual gross remuneration was less than € 32,254, the notice period must be calculated following the statutory, regulatory and contractual rules applicable on 31 December 2013. In this case, the statutory rules provide for a three months’ notice period per commenced five years of service.
- If on 31 December 2013 the white collar worker’s annual gross remuneration exceeds € 32,254, a fixed notice period of one month per commenced year of service, with a minimum of three months, should be taken into account. Contrary to the first category as indicated above, in this case no reference is made to the contractual arrangements which the employee and employer may have concluded as part of the employment contract. However, according to the preparatory works, it was acknowledged that contractual notice clauses could overrule the fixed notice period provided by law.
What about contractual notice clauses?
Since the entry into force of the Unified Status Act, there has been a debate amongst legal scholars about the application of the pre-2014 contractual notice clauses concluded with a higher earning white collar worker: should the fixed notice period provided by the Unified Status Act be applied for step one and/or for step two, or can a valid pre-2014 contractual notice clause be applied?
These questions have led to various positions in case law until to date without any clear certainty for both the employer and employee.
The Constitutional Court judgment
In its judgment of 18 October 2018, the Constitutional Court has now ruled that contractual notice clauses concluded before 2014 with higher earning white collar workers remain applicable.
If a contractual notice clause has been validly concluded as part of the employment contract before 1 January 2014, the fixed notice period provided by the Unified Status Act will not be applicable for the calculation of step one.
- The Constitutional Court did not rule on the application of contractual notice clauses concluded after 2014. We are of the opinion that these remain valid if they are more favourable for the employee compared to the statutory notice period.
- The Constitutional Court specifically judged on step one. The latter implies that for the calculation of the notice period, the second step should still be added based on this judgment (today (i.e. November 2018): 15 weeks in case of a dismissal by the employer).