Court of Cassation rules on dismissal for serious cause: damages to be taken into account when assessing the gravity of a shortcoming
11 Apr 2023
In its judgement of 6 February 2023, the Court of Cassation overturned a Brussels Labour Court ruling in which the latter concluded that – when analysing the validity of a dismissal for serious cause – whether or not the grave shortcoming that resulted in the dismissal caused any damages is irrelevant. Although the existence of any damages in and of itself is no prerequisite for a valid dismissal for serious cause, the Court of Cassation ruled that the gravity of a shortcoming must be analysed by taking into account all circumstances, which could include damages resulting from this shortcoming.
General principles
Under Belgian labour law, dismissal for serious cause implies the termination of the employment agreement with immediate effect, without notice period or indemnity in lieu being due. ‘Serious cause’ in this respect means a grave shortcoming by one of the contracting parties that renders any further cooperation immediately and irrevocably impossible. The party terminating the employment agreement for serious cause must be able to substantiate and prove this grave shortcoming. In this regard, the applicable legislation does not require that the shortcoming resulted in damages for the other party in order for it to constitute a serious cause.
The case at hand
In the present case, a company’s Finance Manager had neglected to file the required VAT-declarations – a task for which she bore the ultimate responsibility -, which resulted in a significant financial liability for the company. The employer considered this professional malpractice a grave shortcoming that warranted a dismissal for serious cause and also invoked the damages caused to the company as a result of the shortcoming to substantiate their argument.
The employee contested the dismissal and the ensuing dispute ended up before the Brussels labour courts. Both in first instance and in appeal, the courts sided with the employee and ruled that the professional malpractice – even though this showed clear negligence in the execution of the employment agreement – did not constitute a grave shortcoming warranting a dismissal for serious cause. In the argumentation of their appeal ruling, the Brussels Labour Court stated that, when assessing the gravity of a shortcoming invoked by a party terminating the employment agreement for serious cause, it’s irrelevant whether that party suffered (significant) damages as a result of the alleged grave shortcoming.
The Court of Cassation, however, overturned the Brussels Labour Court ruling and reiterated the principle that the entirety of the circumstances surrounding the invoked shortcoming must be analysed to assess whether or not this shortcoming is sufficiently grave to immediately and irrevocably make further cooperation impossible. In such facts-based assessment, the Court stated, whether or not damages were caused by the shortcoming – and to what extent – must be taken into account and is thus relevant to determine the gravity of the shortcoming and the legality of the dismissal for serious cause.
If you have any questions regarding this latest Court of Cassation judgement or regarding the notion of dismissal for serious cause in general, please get in touch; we would love to hear from you!
