Employer’s liability and good employment practices

Employer liability regulates the employer’s liability for damage suffered by an employee under various working conditions. This concerns strict liability. This means that liability does not apply to fault or culpable acts, but is based on the role or specific capacity of a person or employee. By taking out liability insurance, an employer can cover themselves against this damage.

Employer and employee responsibilities

There are two articles in the Civil Code that set out the responsibilities of the employer and employee in the event of an accident. One article is Employer’s Liability, which is based on Article 7:658 of the Civil Code. The other article (7:611 of the Civil Code) deals with the standard of good employment practices. Safe working conditions and a safe working environment are central to this. Over the years, employer liability has expanded considerably. Whereas in the past an employer could be held liable for a violation of Article 7:658 of the Civil Code (employer liability), nowadays the employer can also be liable on the basis of good employment practices (Article 7:611 of the Civil Code).

Good employment practices, Article 7:611 of the Civil Code

In an employment relationship, the basic principle is that everyone treats each other with respect and courtesy, just as in everyday life. This applies to colleagues, but also to the employer and employee. Companies and employers are required by law to behave as a “good employer”. If an employee believes that an employer is not acting correctly, the employee can take legal action.

Good employment practices contribute to the well-being of employees and happy employees. When we talk about a good employer, we are basically referring to six principles of good employment practices. With the principles of good employment practices, the courts provide guidelines for specifying employer liability according to this standard. Because these are principles, a judge will always consider the circumstances of each specific case.

The six principles of good employment practices are:

1. Care

A good employer acts with care towards employees. This means that every decision made by an employer must be carefully prepared. In legal terms, this is also referred to as the principle of care. The principle of care consists of three components:

• Duty to investigate

When making far-reaching decisions, an employer must thoroughly investigate all relevant facts and interests before the far-reaching decision is actually taken.

• Duty to hear

Before an employee can take a far-reaching decision, an employer must first consult with the employee and address any objections.

• Proportionality

Far-reaching decisions may not be taken solely in the interests of the employer; the interests and any objections of the employee must also be taken into account.

2. Abuse of power

Good employment practices also mean that in the relationship between employee and employer, the employer does not abuse its stronger position.

3. Justification

Far-reaching decisions must be clearly justified and substantiated by an employer. Examples include the suspension of an employee, summary dismissal or reorganisation.

4. Trust

A good employer ensures that he or she lives up to expectations. A good employer also keeps his or her promises. We call this the principle of trust. The principle of trust includes equal treatment (principle of equality) and the principle of motivation when making a far-reaching decision.

5. Treat employees equally

Every employee must be treated equally. Based on the principle of equality, no distinction may be made between male and female employees, race, skin colour, religion, political affiliation, beliefs and sexual preference. The Equal Treatment Commission monitors compliance with the principle of equality.

6. Adequate insurance

A good employer must provide good or adequate insurance for employees. This could include accident insurance that compensates employees for damage suffered after an accident.

Employer liability, Article 7:658 of the Civil Code

The employer can be held liable for ensuring safety in the workplace. If an employee suffers damage while performing their work, the employer may therefore be liable for this. The condition for this is that the employer has failed in their duty of care to provide a safe workplace for the employee. In the event of an accident, the risk for the employer is high. A high level of safety in the working environment is expected, with good safety instructions. However, this article does not provide an absolute guarantee that the employer is liable for all accidents.

Deliberate recklessness on the part of the employee

If damage has occurred, the employee can hold the employer liable for it. In doing so, the employee must prove that the damage occurred in the course of performing their work. There are two cases in which the employer can escape their employer’s liability:

• If the employer proves that they have fulfilled their duty of care for safety, there is no employer’s liability.

• If the employer proves that there was intent or deliberate recklessness on the part of the employee, there is no employer liability.

Taking out liability insurance

Experience often shows that the employee succeeds in holding the employer responsible or liable for damage suffered. The exception for intent or deliberate recklessness rarely occurs in practice and therefore plays a very minor role. Given the likelihood that an employer will be held liable, it is wise to take out liability insurance. If an employer fails to take out insurance for employees, the employer may be held liable in the event of damage (e.g. due to an accident) for an amount equal to what a proper insurance policy would pay out.

Work-related accidents and insurance

The employer’s liability in this article relates to the standard of good employment practices. The difference with the other article lies mainly in the burden of proof. Accidents that did not occur in the workplace but are work-related, for example. An employer cannot have given instructions for safety in all cases, given that the risk was incurred outside the regular workplace.

A condition for holding the employer liable is that the accident took place at a location or involved an action related to work. For example, an accident during a company outing also falls under this employer liability, as is clear from case law of the Supreme Court. In order to hold the employer liable, the employee must prove that the employer has failed in its duty of care.

The employer can then be held liable under the standard of good employment practices for not taking out employer’s liability insurance. So even if something happens, but an employer has exercised due care for the employee and taken safety into account, an employer can still be held liable under employer’s liability. The employer can limit this risk by taking out liability insurance.

What constitutes adequate insurance?

Employer’s liability arises, among other things, if an employer has not taken out adequate insurance for employees. An employer has an insurance obligation for employees who regularly participate in traffic in order to perform their work. The insurance taken out by the employer must cover various traffic risks. This insurance must also be “adequate”. There is no exact definition of this term, except that the insurance must provide for compensation for any damage in accordance with prevailing social attitudes regarding coverage.

Liability for commuting

It is clear that the employer runs a high risk and that there is a large safety net for the employee to hold the employer liable. Safety and safety instructions cannot be taken into account in all cases. A number of clear rules of thumb have been agreed upon with regard to traffic conditions:

• The employer is not liable for damage during purely commuting.

• Employer liability does apply to damage during work-to-work travel.

• Pure commuting is truly pure if there are no work-related activities.

When commuting is not purely commuting, for example colleagues carpooling or an employee performing work or work-related activities during a journey in the form of delivering a parcel, the boundary between commuting in the private sphere and work-related travel disappears. In these special circumstances, both forms are treated as equivalent to performing work and the employer is liable. The Supreme Court has ruled that, pursuant to Section 7:611 of the Dutch Civil Code, an employer’s duty of care also applies when employees perform work outside the workplace.

Employer liability for self-employed persons

Self-employed persons are increasingly being deployed these days and are therefore at risk of injury. Employer liability is also relevant for self-employed persons. However, this is conditional on the work performed by the self-employed person being the same as the normal business activities (i.e. those of permanent employees within the company). An employer can therefore only be held liable for those activities for which the employer already provides safety measures. The employer has a duty of care for the usual business activities. The rights of a self-employed person can therefore be limited if the self-employed person is employed for other types of work.

When is an employee liable?

In addition to employer liability, an employee can also be held liable. By signing the employment contract, an employee undertakes to behave as a good employee. As with employers, certain rules regarding good employment practices are laid down in the Civil Code for employees.

Employee liability applies in the following situations:

• Failure to perform by an employee

• Breach of a concluded agreement

• Unlawful acts by an employee

An employee can be held liable by the employer and by third parties. Think of a customer or supplier who suffers damage as a result of the employee’s actions. The employer can hold the employee liable for damage to third parties. In practice, however, this does not mean that the employee will be liable for the damage if the liability claim is successful. The employee acts on behalf of the employer, which means that the employer is held liable for the employee’s actions.

However, there are a number of rules under which the employer may be able to hold the employee liable. Although this is difficult in practice, this rule may be deviated from when:

• The employee causes damage intentionally

• The damage is caused by reckless behaviour on the part of the employee

• There are other circumstances that justify the employee paying compensation

• The employer and employee have contractually agreed that the employee must pay compensation. However, the employee must be insured for this.

Advice on employer liability from a solicitor

Would you like more information about employer liability, your duty of care as an employer, or do you have a conflict regarding liability? Fruytier Lawyers in Business specialises in corporate law. Our experienced solicitors will be happy to provide you with legal assistance and explain what you, as an employer, need to take into account and the risks involved. We will also be happy to explain why we advise you to take out employer’s liability insurance. Please feel free to contact our office without obligation.