The Rotterdam District Court recently had to rule on whether an employee owed her employer a penalty for breaching a secondary-activities clause.
An employee had a secondary-activities clause in her employment contract, providing that:
- The employee undertakes not to carry out secondary activities for third parties other than with the express written consent of the Employer.
- The Employer may refuse consent within the meaning of article 17.1 if it has an objective justification for doing so, which will then be communicated to the Employee in writing.
Under the accompanying penalty clause, in the event of a breach of this clause the employee must pay a penalty per breach of one gross monthly salary, increased by €5,000 for every day the breach continues.
At some point the employee reported sick, but subsequently gave a talk at a live business event during her illness. She did so without having asked her employer’s permission beforehand.
The employer claims that the employee was not genuinely ill, but was instead busy building up her own business, and therefore believes it is entitled to a penalty for breach of the clause.
The court ruled that, in this case, the employer had insufficiently substantiated why the employee was not permitted to carry out her secondary activities. The clause was therefore considered void. This was because there was no objective reason for the employer to prohibit the secondary activities.
It was also taken into account in the assessment that it is likely the employee would not have asked for permission to speak at a live event during her illness in any case. The employer’s objective reason for refusing consent would therefore need to entail more than merely that the employee was still on sick leave while carrying out the secondary activities.
Questions or advice?
Prevent legal problems and make sure you are well prepared! Would you like to know more about this, or do you need advice? Then contact us via info@thelegalcompany.nl or call 020-345 0152.
