Change of tasks during the notice period leads to loss of goodwill indemnity
The legislator has granted employees who are mainly involved in finding and visiting customers with a view to concluding and negotiating business the special position of sales representative. In case of dismissal, these employees may (under certain conditions) claim a so-called goodwill indemnity to compensate for the customers they lose due to this dismissal.
However, it regularly occurs that an employer is not eager to let a sales representative who has been given notice of dismissal continue to perform his work. The consideration being that a dismissed employee is not always the best person to represent a company. Such commercial representative is then often moved to the “back office” – whether or not with the employee’s consent. Therefore, the question arises whether such employee can still claim goodwill indemnity when his notice period ends.
Consent of employee leads to financial loss
We can find an answer in a recent judgement of the Dutch speaking employment tribunal of Brussels. A sales representative was given notice by his employer after several poor evaluations. The employee and the employer subsequently concluded an annex to the employment agreement in which parties agreed that, during the notice period, the employee would no longer work as a sales representative, but as teleseller. Once the employment agreement had ended, the employee claimed a goodwill indemnity.
However, according to the employment tribunal, the case was clear: the qualification as sales representative – and the right to a goodwill indemnity – must be judged at the time on which the employment agreement effectively ends. At that time, the respective employee was a teleseller. Thus, according to the employment tribunal, he was not entitled to any goodwill indemnity.
“Forced back office” also leads to loss of goodwill indemnity.
The abovementioned judgement, in which parties explicitly agree to change the employee’s tasks, appears to be logical. However, the question is whether one would come to the same decision if the employer changes the tasks unilaterally.
The employment tribunal of Antwerp, division Antwerp, recently had to consider whether the employee also loses his right to a goodwill indemnity if the employer unilaterally moves the employee to the “back office”. The respective case concerned an employee whose duties were unilaterally changed by his employer during the notice period, mainly to duties which were related to the transfer of his tasks to his successor.
The employment tribunal concluded that the employee could no longer be considered a sales representative at the time the employment agreement ended. According to the tribunal, the employee did not prove that he had contested the change in duties. Although at the start of the change, the employee denied by email that he had consented to his new tasks, he performed these tasks during the entire notice period (being almost seven months) without taking any action. This implies, according to the employment tribunal, that the employee de facto agreed that he was no longer tasked with sales representative activities. Therefore, the claim for a goodwill indemnity was rejected.
Crucial: duties upon termination of the agreement
In summary, it can be concluded that the effective tasks of the employee at the end of the employment agreement are decisive in order to determine whether or not he is eligible to a goodwill indemnity. An employee who moved to the “back office” during his notice period can therefore no longer claim a goodwill indemnity. Of course, in case of a unilateral changing of duties, the employer does expose himself to the risk of the employee invoking a constructive breach and claiming severance pay (and logically also a goodwill indemnity). Such a strategy is thus quite risky, except in manifestly clear cases.
Dutchspeaking Employment Tribunal Brussels
14 August 2017
Employment Tribunal Antwerp, Antwerp division
10 October 2017