But that’s how it’s always been, right?

It’s frequently the case that what the employer and employee have agreed to in the employment contract does not correspond one-to-one with what happens in practice. For example, consider an employee who, according to his employment contract (or the collective labor agreement for the Hospitality Industry), is entitled to 75% of his wages during long-term sickness, but who in the past has always been paid 100%. Or an employee who has been paid a thirteenth month in December for years, when there is nothing about it in the employment contract. Often this type of situation does not cause any problems until the employer decides that it no longer wants to pay these perks. For sometimes a custom can become a right, what is known as an “acquired right“.

What is an acquired right?
An acquired right refers to an employee’s right that is not in writing and has not been negotiated by the employer and employee. The right arises tacitly because the employer and employee have always acted in the same way over a certain, possibly extended, period of time. The way the employer acts may create certain expectations for the employee. The employee may then in some cases trust that the employer will continue to act in the same way in the future. Thus, a condition of employment may arise from a course of action. If this is the case, the employer cannot simply change or discontinue this condition of employment without the employee’s consent.

When and how does an acquired right arise?
In 2018, the Dutch Supreme Court ruled on the question as to when there is an acquired right. The Supreme Court concluded that this question cannot be answered in a general fashion because each case is different. Still, to provide some guidance on how to assess this, the Supreme Court has listed six points of view that are relevant to assessing when an acquired right exists:

1. The course of action taken;
2. The nature of the employment contract and the position of the employer and employee in relation to each other;
3. The length of the period during which the employer followed the course of action;
4. What the employer and employee stated to each other in connection with the course of action;
5. The advantages and disadvantages of the course of action for the employer and employee;
6. The nature and scope of the group of employees for whom that course of action was followed.

Let’s apply these viewpoints to a practical example. Suppose an employee has worked part-time at a bakery store as a salesperson for 20 years. In her own time, she has also been running a small business baking and selling personalized cupcakes to order for 15 years. Summer is the busiest time for her cupcake business, as there are many weddings and baby showers then, which means more customers. Therefore, this employee has been taking a few weeks of unpaid leave during the summer months for 14 consecutive years. The employer does not think this is a problem: Indeed, the employer has been known to say to the employee that he thinks it is a fine tradition, and that he respects the employee’s entrepreneurship.

But then things go wrong. In June 2024, the employee tells her employer that, again, she will be taking her unpaid leave in a week. Her employer says that’s not possible, because the bakery store is busy and he can’t spare the employee for three weeks. The employee can totally envision that her customers will walk away if she can’t serve them and fears she may close her cupcake business. The employee and employer are diametrically opposed here: There is no agreement on paper, but it has been going on for years, right?!

In this case, we would conclude that there is a high probability that there is indeed an acquired right and thus the employee is entitled to her unpaid leave as if a condition of the employment contract did exist. In addition to the long period over which this employee was allowed to take unpaid leave during the summer, the fact that the employer has stated in the past that it had no problem with this arrangement, and the great disadvantage that the employee would suffer if she were suddenly no longer allowed to take unpaid leave, all point in this direction. It is quite possible that a condition of employment has been created in this situation, which the employer can therefore no longer simply change.

Tips for practice
If an employer wants to prevent a particular perk from becoming an acquired right, it is advisable to put this intent in writing. For example, when granting leave, a bonus, or other benefit to an employee outside the contractual arrangements, it is helpful to indicate in writing that this is a one-time grant and that the employer may act differently in a subsequent case. This can provide guidance if there is future discussion about whether or not a right has arisen for the employee.

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