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Restoration sanctions, such as an order for periodic penalty payments, are imposed on an offender to restore the permitted or legal situation. For example, if an offender is using a building to rent out storage units without having a permit to do so, an order under penalty may be imposed to stop this use and restore the legal/permitted situation. Now what if the person on whom the order under penalty is imposed can no longer be held accountable for that violation, for example because he is no longer the owner of the plot, or because he has died. The order under penalty can then pass to the legal successor of the violator. The legal successor is the person who buys the plot from the violator, but this can also be the heirs of the violator. Can the order under penalty simply pass to that legal successor if he/she is unaware of it? 

This issue had to be assessed by the Administrative Law Division of the Council of State in its ruling of November 20, 2024. In this case, the college had imposed an order under penalty payment on the operator of a café for exceeding noise standards. In fact, local residents were suffering greatly from noise pollution. In its decision, the college had also explicitly stated that the order would also apply to the legal successor. The café was sold and the new owner continued under a new name. The college found that the new owner had violated the order several times and proceeded to recover the forfeited penalty payments. The new owner disagreed, claiming to have no knowledge of the previously imposed order for periodic penalty payments. The Division ruled that the answer to the question of whether the new owner could be considered a legal successor did not depend on whether the new owner was aware of the penalty payment order when he purchased and began operating the café. In addition, the Division ruled that the new owner could also have found this information in the municipal restrictions register. 

This therefore means that you, as the legal successor, can be faced with remedial sanctions imposed on your predecessor, even if you had no knowledge of them. Note that this transfer to the legal successor must be explicitly mentioned in the decision of the administrative body. 

There may be possibilities for recourse against the previous owner, but this strongly depends on the circumstances of the case. We can also assist you with this. 

Are you confronted with a recovery sanction and are you looking for assistance in the objection and appeal procedure? Please contact Gerard van der Wende or with Fleur Huisman. 

You can find the link to the decision of the Council of State here

Recently, the District Court of North Holland ruled, which again clearly shows that parties should look at the actual situation and not so much at what is (not) on paper. This case was about a hairdresser who was seen as a freelancer by her employer, because they did not (yet) have a written employment contract, but according to the subdistrict court she was still seen as an employee.

What was going on in this case? In this case, the parties discussed drafting a written employment contract. However, they had not agreed on the terms. A few months later, the (mother of the) hairdresser asks the salon owner for the employment contract and pay slips so that she has clarity on vacation days and vacation pay. The salon owner indicates that as long as the hairdresser does not agree to the employment contract, she is considered a self-employed worker and therefore the salon does not have to pay pay payroll taxes. Subsequently, the hairdresser called in sick, which the salon owner considered a termination of the employment contract. The hairdresser took the position that no notice should be given because she was sick and there was a prohibition on giving notice.

Why did the district judge rule that the hairdresser was an employee? The salon owner specified the work to be done by the hairdresser, with the hairdresser also needing constant supervision because she could not do the work independently. This indicates a relationship of authority. In addition, the hairdresser did not send invoices, did not charge her own hourly rate and was not registered in the trade register of the Chamber of Commerce. She reported her hours worked, after which payment followed. Thus, the hairdresser received wages and performed labor under authority for a certain amount of time. In short, all the requirements for an employment contract under Section 7:610 of the Civil Code were met. 

What was the consequence? The salon owner was not allowed to terminate the employment contract in connection with the ban on notice during illness and must therefore reintegrate the hairdresser and then keep her at work. In addition, the hairdresser's collective bargaining agreement, which has been declared generally binding, came into play and the hairdresser was entitled to 100% salary continuation including vacation allowance in accordance with the collective bargaining agreement for at least the first year of illness.

Do you have questions about whether the zzp'ers you have engaged are not in fact employees in disguise or would you like to set out the agreements with these zzp'ers more clearly on paper? If so, please contact Dennis Oud, Tessa Sipkema, Elke Hofman-Bijvank or Tim van Riel. 

You can find the link of the ruling here. 

Both case law and practice often discuss it: the administrative body sends a decision by mail, but the citizen claims not to have received anything. When the citizen does not receive a decision, it can have far-reaching consequences. Therefore, this is often litigated in case law. Such is the case in the Division's ruling of November 27, 2024. 

In this case, the plaintiff had submitted an application for a permit to replace roof tiles and facade parts of buildings on his property. However, the application was not complete and the college therefore requested additional data. The plaintiff did not send that additional data within the time limit set for this purpose, and the college therefore disregarded the permit application. The plaintiff claimed never to have received this decision and even believed that the environmental permit had been granted by operation of law because the college had not made a decision after two years. The college did not go along with this and the plaintiff objected to both the decision to set aside and the decision to refuse publication of a permit granted by operation of law. The college declared the objection inadmissible for the former part and further declared it unfounded. The court declared the appeal against it unfounded. 

The Division now had to assess whether the college had actually set aside the permit application, or at least whether it had sent this decision to the plaintiff. 

It was established that the college had not sent the letter by registered mail. It follows from established case law that in that case the college must make it plausible that the letter was sent. It is sufficient if the college proves that the letter was sent to the correct address, by demonstrating that the letter is correctly addressed, that it has a date of dispatch and that there are proper shipping records. On the contrary, the plaintiff must disprove this and dispute receipt of the letter. In this case, the college had plausibly established that the letter was sent and the plaintiff could not sufficiently disprove or dispute this. 

In practice, this means that you yourself must keep a close eye on the deadlines and, more importantly, maintain good contact with the municipality and not wait. If you need help with this in an objection or appeal procedure, please contact Gerard van der Wende or with Fleur Huisman. 

You can find the link to the ruling of the Council of State here.

The veto is a right inextricably linked to a form of democratic control. The veto has been around for so long that it dates all the way back to the Roman Republic, where the Roman tribunes (representation of the people) could keep senators in line (fun historical fact to find out over Christmas).

An essential addition to still give the minority a form of control; something that can be seen today, for example, in shareholder agreements and also central to an interesting ruling from Nov. 5, 2024. The veto right in principle allows minority shareholders to still oppose certain decisions without requiring a majority. The court ruled in the present ruling that in some circumstances reliance on a veto right may be unacceptable based on reasonableness and fairness.

For advance information, roughly speaking, a “simple” majority is 50+1, a “qualified” majority is then a deviation from that, for example, a 2/3 (66.67%) number of votes or 4/5 (80%) of votes (with possibly other conditions).

In the ruling, minority shareholders of the StudyPortals company VOC and Keen disagreed with the decision of the qualified majority of shareholders to distribute free reserves to shareholders. This was because the shareholders' agreement contained a provision that resolutions could be validly passed by qualified majority, but that in some cases consent of VOC and Keen was required to count as a valid resolution. These included decisions regarding distributions to shareholders. The provision that VOC and Keen had to consent to such decisions effectively meant that they had a veto power within the shareholders' meeting. 

 
Specifically, what happened in this case? The qualified majority of the shareholders voted to distribute free reserves to the shareholders. The distribution was in the amount of €4.5 million. This distribution was actually paid out several days after the resolution, even though VOC and Keen voted emphatically against the resolution and had a veto power. VOC and Keen then turned to the preliminary injunction court to reverse the distribution as soon as possible and to grant an express prohibition that no distributions could be made as long as they did not consent. Indeed, VOC and Keen believed that these free reserves should be used for any acquisitions or other major financial projects consistent with StudyPortals' goals. 

The preliminary injunction court first determined that the resolution was validly passed because there was a qualified majority. However, the question is to what extent VOC and Keen can claim performance of the shareholders' agreement. The defense put forward on this claim includes the fact that VOC and Keen's reliance on the right of veto should be considered unacceptable by the standards of reasonableness and fairness. The court goes along with this. 

The judge's considerations mainly focus on the fact that StudyPortals has not made distributions to shareholders since 2015, but has been making profits for years. The judge cites the point that according to established case law, the principle is that profits should be distributed to shareholders unless it is contrary to the interests of the company. A policy where reserves are held unnecessarily and for a considerable time is also not justified in principle. When looking at the party intentions during the conclusion of the shareholders' agreement, it does not explicitly appear that the shareholders wanted to deviate from this principle regarding the veto power for VOC and Keen. There is a balancing of interests by the court, with the interest of distributing the profits outweighing the interest of preserving a coercive power of VOC and Keen to use the profits for acquisitions, etc. So should this discussion arise in the future, another balancing of interests will have to be done to determine whether the veto is lawful. 

All in all, the right of veto is not an absolute means of making your mark as a minority shareholder. Although of course this only applies when it is unacceptable by the standards of reasonableness and fairness in the interest of the company. However, the right of veto remains of great importance to minority shareholders and will continue to play a major role in most cases and simply be legally valid if agreed upon in the agreement. Just as it has played a role since the Ancient Romans.

So for a minority shareholder, it is a good idea to include a veto right in a shareholder agreement.

Do you have a question about this topic or about corporate law? Please feel free to contact one of our corporate law specialists We are happy to help you! 

In a recent ruling, an employee asked that his summary dismissal be set aside. What was the reason for the dismissal? 

The managing director of the Dutch branch of Pentagon decided to light up a joint at home during a Teams meeting. At the moment the joint was lit, his camera unknowingly turned on, causing the colleagues present to see him with the joint. At first, the employee claimed it was actually a cigar, but then admitted it was a joint and then dismissed the incident as a "stupid mistake". 

That the employee made a mistake, the district judge agreed. Employer had a zero tolerance policy on alcohol and drugs. This policy is in the personnel regulations which was known to employee or at least should have been.

Employee indicated that due to severe neck pain he sometimes uses cannabis in private time and that he only planned to smoke the joint after the meeting. This does not negate the fact that drugs were used during working hours. Moreover, this employee held a senior position. Indeed, the notice of immediate dismissal reveals that he held “the most senior management position of our company in the Netherlands. This obviously goes hand in hand with being a role model within the organization. The employee's behavior showed insufficient respect towards his colleagues. 

The judgment of the subdistrict court is therefore clear: the instant dismissal was justified. The violation of company rules does not go up in smoke, even in an online meeting and even if from a home office. 

What can we learn from this? 

Establish your policy and enforce a zero tolerance policy, because then there can be no discussion about it. 

You can find the link of the ruling here.

Article 16:79(2) of the Environment Act lays down the power for the administrative body to determine that a granted environmental permit will not take effect until four weeks after the day of publication of the decision. This provision is particularly useful for decisions that may cause irreversible consequences.

Such a situation existed in the ruling of the preliminary relief judge of the Gelderland District Court of November 7, 2024. This case involved a granted environmental permit for the construction of a new tree nursery. Part of the permit included the construction of drainage at a depth of no more than 90 centimeters below ground level. The applicant had applied to the preliminary relief judge for injunctive relief, as she disagreed with the granted environmental permit and had lodged an objection. She wanted to avoid irreversible consequences already before her objection had been decided.

It emerged at the hearing that the permit holder had already carried out and completed the drainage work. Thus, irreversible consequences for the archaeological remains in the soil had already occurred because the context of the archaeological remains had been lost during the drainage work.

The court in preliminary relief proceedings ruled that in this case it would have been in the power of the Municipal Executive to make use of the power provided in Section 16:79 (2) of the Environmental Protection Act. Because the Municipal Executive failed to do so and the permit holder started the drainage works immediately after the environmental permit was granted, the applicant could therefore not make a successful request for a preliminary injunction in any case, because the Municipal Executive had given the permit holder the opportunity to immediately start works with irreversible consequences and a preliminary injunction would therefore no longer be effective.

Do you disagree with a granted environmental permit for a site near you and wonder whether it makes sense to file an objection or appeal and request a preliminary injunction? If so, please contact Gerard van der Wende or Fleur Huisman.

You can find the link to the ruling here.