Employee refuses termination settlement offered and ends up with less in court

My client was dissatisfied with the performance of one of her employees. A programme of coaching failed to bring about the desired improvement, so she believed that there was no solution but to terminate his employment contract.

When my client discussed the situation with the employee, he initially gave the impression that he was prepared to cooperate with the termination of his employment contract if a reasonable settlement proposal was made.

During the negotiations, in which my client was very generous, it became clear to her that the employee was not taking a constructive approach. On each occasion, he responded later than the date by which he was requested to respond and he repeatedly reported sick when there was nothing wrong with him. As a result, the negotiations took several months, leaving my client in the situation that the date for termination of the employment contract kept being postponed. In the end, in an attempt to create some certainty, my client came to me.

Working with the legal assistance professional representing the employee, I quickly ascertained that rescission proceedings before the sub-district court were unavoidable. I issued these proceedings.

At the hearing, the employee acknowledged that he was no longer capable of doing the job. He realised that the termination of the employment contract was unavoidable, but really wanted a large settlement sum.

At the judge’s request, the parties conducted further negotiations outside the courtroom. As my client still wanted to settle the employment contract on good terms, she repeated her earlier offer. She was even prepared to ignore the fact that the employment contract would now terminate several months later than originally intended. This meant that in fact the employee would receive more than he was previously offered.

Although I produced calculations to show the legal assistance professional that this offer was significantly better than anything the sub-district court was likely to award his client, this offer was again insufficient to satisfy the employee. As my client did not want to increase the offer further, it was impossible to settle out of court. The parties therefore asked the court to give judgment.

In his judgment several weeks later, the sub-district court judge terminated the employment contract. In doing so, he took no account of the notice period, leaving the employee with a gap between the time when the employment contract ended and the date on which he was able to claim unemployment benefit. As the court calculated the termination settlement amount on the basis I had used in my calculations for my client and the employee, the court awarded him a lesser amount than that offered by my client. The sub-district court judge also reduced that amount further as the employee was held to have postponed the termination date of the employment agreement by originally giving the impression that he would cooperate with termination.

In the end, while the employee was successful in extending the period of employment, he had to deal with a period in which he had no income and he was awarded a lesser amount than he had hoped. The employee would have been better off if he had accepted my client’s first offer immediately.