Publications

A legal exploration of the scope and permissibility of the 'bad leaver' provision in The Netherlands. In the complex landscape of partnership and shareholder agreements, terms such as 'good leaver' and 'bad leaver' are crucial in determining the rights and obligations of departing shareholders. Leaver provisions are agreed to ensure that a departing shareholder is not left as a (passive) shareholder when the involvement in the company changes. A "good leaver" generally leaves without any problems, while a "bad leaver" often results from a situation of conflict or unwanted departure. These distinctive terms have significant implications, especially with regard to share transfers and their financial consequences. Because of the impact of the consequences, it is important to have a clear picture of the legal aspects when entering into such a clause. In this contribution, we will highlight the role of reasonableness and fairness in the interpretation and application of "bad leaver" clauses in The Netherlands. In doing so, we will also provide recommendations for drafting clear and objective bad leaver clauses, as this will prevent costly and complicated litigation later on.

On April 10, 2024, the Minister of Social Affairs circulated a new letter on the complete overhaul of the leave system. This overhaul is intended to make the system more comprehensible for both employers and employees. No legislative proposal for this revision is ready at this time, but the minister’s letter emphasises the intention to draft legislation. In the letter, the minister explains that leave can be broken down into different clusters of comparable forms of leave with the intention to unify the conditions and implementation. The proposed clusters are as follows:  Care of children: maternity leave, adoption or foster care.  Care for loved ones: short and long-term care leave for a sick relative (mantelzorg) or a sick child.  Personal situations: short-term leave for unforeseen or special circumstances.  Separately, a legislative proposal to implement a new form of leave has entered the public consultation phase: the introduction of mourning leave. Current leave upon the loss of a close relative is short and applies until the funeral; it is not intended as mourning leave. The legislative proposal introduces a minimum standard of five days (the hours of one work week) of mourning leave for working parents upon the death of a partner or minor child. During that period the employee retains the right to full pay. It will be possible to (partially) deny mourning leave in case of compelling business reasons.  How can La Gro be of assistance?  Do you have a question about employees going on leave? Do you want to introduce additional leave within your company? Do you have a different question? Expertise in 18 legal fields enables La Gro to offer broad legal assistance. Feel free to contact me or one of my specialist colleagues.   

Occupational disability remains a complex topic. Acting correctly after an employee calls in sick is by no means a given. In some cases, an employer stops payment without proper grounds. This happens, for example, when the employee is not believed to be sick. Recently, the Court of Appeals in The Hague gave a ruling in such a case, from which important lessons for employers can be learned.  The facts of the case were as follows: an employee, who had not worked for twelve years due to personal circumstances, had been hired by his friend, the employer’s director, as a maintenance mechanic. After only a few months (on 12 June 2022), the employee indicated that he needed to take time off. This request was accepted. A week later, the employee’s partner texted the employer that he was “clearly overworked.” The employee subsequently did not return to work. The employer stopped paying him.   The employee subsequently claimed his wages from 12 June 2022 in court. The employer defended itself, claiming that it hadn’t been clear that the employee was sick, that the employee never officially and personally called in sick, that the employee had been unwilling to work and had never sought contact, and that the employee was still working elsewhere while he stayed away from the employer.   The court nevertheless granted the wage claims. After the text message from the employee’s partner, the employer, being familiar with the employee’s background, could have anticipated incapacity for work even without an official sick notification. Furthermore, the court ruled that a right to wages during illness does not require an explicit sick notification. The court ruled that the employee had been sick since 12 June 2022, attaching value to an expert opinion  that had been issued seven months after 12 June 2022 (and after a court decision in first instance). It followed from this opinion that the employee had been sick on 12 June 2022. That opinion had since been confirmed by an insurance physician. The wage claim was thus awarded with an additional partial statutory increase of 10%.  Conclusion   After an employer is reasonably aware that an employee is sick, he must act correctly. An employer may unintentionally violate important legal obligations. If an employer does not call in a company doctor or simply stops wage payment, it can cost him dearly. Even if there was never an explicit notification of illness.  How can La Gro be of assistance?   Are you wondering how to act when an employee calls in sick? Are you considering a new sickness policy? Do you have a different question? Expertise in 18 legal fields enables La Gro to offer broad legal assistance. Feel free to contact me or one of my specialist colleagues. 

Working under an employment contract does not necessarily mean that the work itself takes place within the employer’s company. Sometimes the work takes place elsewhere. Moreover, if an employee works specifically through a temporary employment agency under the direction and supervision of another entity, we speak of “temporary agency work”. The entity where the work is performed is then the ‘user company’.   Specific legal provisions apply to temporary agency work to protect temporary agency workers. These rules include, for example, the Wet allocatie arbeidskrachten door intermediairs (Waadi), based on the European Temporary Employment Directive (2008/104/EC).  One of the aims of the Waadi is to prevent temporary workers from being disadvantaged compared to workers employed directly by the user company. Among others, an important provision is Article 9a Waadi, which states that temporary workers may not be prevented from entering into the user company’s s employment after the end of the assignment.   A recent decision of the Court of Appeals in ‘s Hertogenbosch clearly illustrates the importance of a good understanding of the (European) rules on temporary agency work.  An administrative employee of an temporary agency (who was working internally and thus would not perform temporary agency work elsewhere) had been put to work at a scaffolding construction company. Afterwards, he claimed in court that he had also worked there as a  foreman under the direction and supervision of the user company. The temporary  agency denies this, but the court concludes, based on the company records, that the employee had indeed worked as a foreman, so that he qualified as a temporary agency worker.  The (re)qualification ultimately led to the nullification, of the non-solicitation clause in the employment contract on the basis of Section 9a Waadi, because the clause prevented the employee from joining the user company’s employment. The non-competition clause, however, was upheld.   The fact that the court applied Section 9a Waadi ex officio (without any of the parties invoking it), makes this case extra special. The court felt compelled to this initiative because of a recent ruling by the Court of Justice of the EU, confirming that Article 47 of the EU Charter, which provides for the right to effective legal protection, can be directly invoked in labour relations. This ruling by the Court of Appeals in ‘s-Hertogenbosch marks one of the first cases following this EU development.   Lessons learned   Convenient use of employees by a temporary employment agency can unintentionally lead to applicability of the Waadi and similar regulations.   In addition, the wording of relationship clauses is and remains of great importance. Finally, an employer who is not familiar with European law may be in for unpleasant surprises in proceedings.  How can La Gro be of assistance?   Do you have a question about temporary work, the formulation of your non-solicitation  clauses or the effect of European law on your organisation? Do you have a different question? Expertise in 18 legal fields enables La Gro to offer broad legal assistance. Feel free to contact me or one of my specialist colleagues. 

In the event of transfer of undertaking employees are transferred to the transferee by operation of law under the same terms of employment. An exception applies in the case of bankruptcy: in case of a continuation after bankruptcy, employees do not automatically transfer. The transferee may choose which employees it wishes to offer an employment agreement and under which conditions. This exception can also apply if a continuation after bankruptcy is prepared (far) in advance, provided there is a legal basis for such a ‘pre-pack’. Such a legal basis does not currently exist in the Netherlands.  The Continuity of Enterprises Act, containing a legal basis for the pre-pack, already passed in the House of Representatives in 2016, but it has not entered into force yet in anticipation of the Transfer of Bankrupt Undertaking Act. This act has now been published and has entered into the public consultation phase. Dutch law may therefore soon provide a full regulation of the transfer of employees through pre-packs.  The Transfer of Bankrupt Undertaking Act dictates that  the transferee  must, in the event of a continuation after bankrupty, offer all dismissed employees an employment contract with unchanged terms of employment. However, certain terms and conditions of employment may change if necessary to maintain employment availability. In any case, existing non-competition clauses will be null and void. If a loss of jobs is foreseen within 26 weeks after the continuation – a regular occurrence in takeovers – the transferee only has to make an offer for available positions, with selection by means of the opposite of the reflection principle (Afspiegelingsbeginsel). Finally, the works council will be given advisory rights on this course of action.   For smaller undertakings (below 20 employees), the new rules shall – for now –  be optional .  How can La Gro be of assistance?  Are you thinking about selling your business? Are you facing a bankruptcy? Do you have any other questions? Expertise in 18 legal fields enables La Gro to offer broad legal assistance. Feel free to contact me or one of my specialist colleagues.

Long-term illness of an employee can eventually provide a basis for termination of the employment contract, provided that:  (1) the statutory (possibly extended) period of wage payment during illness has expired, and    (2) it is plausible that recovery and performance of modified work are not reasonably possible.   In case of such a termination, the statutory transition compensation is due. Employers may therefore be tempted not to terminate the employment contract and instead let it continue as ‘dormant’, in other words without paying any more wages and without settling with the employee financially by paying the transition payment.   In 2019, the Supreme Court ruled that an employer must in principle agree to terminate the employment contract by mutual consent if the employee so requests, unless the employer still has a legitimate interest in the continuation of the employment contract, for instance if reintegration is still possible. An approaching retirement – which would end the employment contract without statutory transition compensation – does not constitute a legitimate interest in this context.  The Supreme Court recently clarified that the existence of an exception must be assessed at the time the employee makes the request for termination. This assessment must include relevant facts and circumstances before and after the request.  UWV often compensates the transitional compensation paid to a long-term sick employee. Such compensation should be calculated against the date on which the statutory period of wage payment during illness ended (and not, for example, against the actual termination date). Otherwise, the employer pays more than the maximum compensation. This regulation may change as part of the coalition agreement of 16 May 2024, but as of yet no initiatives have been taken to that end.   How can La Gro be of assistance?   Do you have questions about a sick employee or compensation of transitional allowance by UWV? Do you have a different question? Expertise in 18 legal fields enables La Gro to offer broad legal assistance. Feel free to contact me or one of my specialist colleagues.

On 23 January 2024, the Provisions Judge of the District Court of The Hague handed down a decision in the PI proceedings initiated by Janssen Biotech Inc. (“Janssen”) against Samsung Bioepis NL B.V. (“Samsung NL”). Janssen claimed that Samsung NL infringed its Stelara SPCs granted in Italy and Denmark. The Provisions Judge denied the PI as according to his preliminary assessment Samsung NL can benefit from the SPC Manufacturing Waiver.

On 1 November 2023, the District Court of The Hague handed down a decision in the invalidity proceedings instituted by Sandoz B.V. (“Sandoz’’) against Bayer Intellectual Property GmbH. (“Bayer’’). The Court held the once-daily dosing regimen of rivaroxaban, claimed in EP 1 845 961 B1 (“EP 961”), inventive.

Today, innovation is the norm. Business models are constantly evolving, and financial instruments play a crucial role in shaping the business future. This article looks at three emerging models that impact the business and financial landscapes: the widely used convertible loan, the Simple Agreement for Future Equity (SAFE), and the Agreement for Subscription against Advance Payment (ASAP). In this contribution, we delve deeper into these models, examine their impact on companies and investors, and shed light on the legal considerations inherent in these financial approaches.

On 3 October 2023, the Provisions Judge of the District Court of The Hague rendered its decision in the PI proceedings between Grünenthal GmbH. et al. (“Grünenthal’’) and Teva B.V. et al. (“Teva’’). The Provisions Judge (“PI Judge”) is of the preliminary opinion that EP 1 457 208 B9 (“EP 208”) makes the technical effect plausible and is inventive. The likelihood of EP 208 being held valid in final relief proceedings is high and therefore a PI against Teva is granted. Making this case particularly interesting is that in parallel final relief proceedings, courts in Germany and the United Kingdom have found EP 208 invalid. The PI Judge (who is also a Judge in the Dutch local division of the UPC) is of the preliminary opinion that the plausibility standard in the Netherlands is different from that in the UK, referring to the recent PI decision of the Court of Appeal in the Apixaban case.

On 1 September 2023, the Implementation Act for the European Mobility Directive comes into effect. This new law contributes to a more integrated and dynamic European market. In an era of increasing globalization and international business activities, companies are increasingly faced with the challenge of operating across borders and expanding their operations. Cross-border mergers, conversions, and splits play a crucial role in facilitating this business mobility and promoting collaboration between companies from different countries.

On 15 August 2023, the Court of Appeal of The Hague (”CoA”) rendered its decision in the PI proceedings between Bristol-Myers Squibb Holdings Ireland Unlimited Company (“BMS’’) and Sandoz B.V. (“Sandoz’’), Centrafarm B.V. et al. (“Centrafarm”) & Teva B.V. et al. (“Teva’’). The CoA is of the preliminary opinion that EP 1 427 415 B1 (“EP 415”) makes the technical effect plausible, allowing post-published evidence to be taken into account. The CoA comes to its finding after the Enlarged Board of Appeal (“EBA’’) handed down its decision in G2/21. The likelihood of EP 415 being held valid in the pending final relief proceedings is high and therefore a PI against the generic companies is granted. Making this case of particular interest is that two out of the three CoA Judges are also Appeal Judges in the UPC. This case may show the position the UPC may take on plausibility.