An employer in the Netherlands has to inform an employee in writing or electronically of the key terms of employment, including any bonus plan, within one month of starting work. This obligation to provide information ensues from a European Directive aimed at providing employees with transparency and predictability about their terms of employment.

In principle, a violation of the obligation to provide information leads to the employer's liability. However, case law attaches other consequences to the failure to provide information or to the provision of incorrect information, specifically in terms of the obligation to furnish facts and the burden of proof. The Dutch Supreme Court recently ruled on this in a dispute about the interpretation of a bonus plan.

What was the case about?

The parties had agreed in their employment contract that the bonus plan in effect at the employer would be explained in an addendum. The employer failed to do this and instead handed over a booklet during the application process, which included a component chart and bar charts linked to sales results to explain the bonus plan. The employee believed this document did not provide sufficient clarity on how the bonus was calculated and whether it would be offset against the fixed salary.

The employee argued that the bonus amount to which he was entitled was intended to be an extra on top of the basic salary, whereas the employer was of the opinion that the basic salary should be deducted from the...

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