The Bottom Line
- Established practices can override written contracts. If your company consistently pays more than what’s stipulated in an employment agreement and management approves it, courts may treat this practice as the new reality, blocking claims for repayment.
- Managerial approvals are critical evidence. A key factor in the employee’s defense was that her direct supervisor and the company’s former director had knowledge of and approved the payments. A lack of clear internal controls can severely undermine a future legal claim.
- Misuse of staff time is a red line. While the court rejected claims related to the manager’s own compensation, it held her liable for damages for using company employees, during paid work hours, for her private business and personal chores.
The Details
The dispute centered on a former Operations Manager at Schoonzorg B.V., a cleaning services company. After a new director was appointed, an investigation was launched into the manager’s conduct. The company subsequently sued her for over €760,000, including a primary claim of €221,243 for “undue payments.” Schoonzorg argued that for years, the manager had received a higher salary, bonuses, pension contributions, and expense allowances than specified in her 2021 employment contract. However, the court dismissed this claim entirely. The manager successfully argued that the payments were not made in error but were based on verbal agreements and established practices, notably an agreement that her compensation would match her previous role at another company. The court found that because these payments were consistently made and approved by the former director and processed by the salary administration, they had formed a de facto agreement that superseded the written one.
Schoonzorg also brought several claims for damages based on alleged misconduct, including making unverified company purchases, taking excessive cash withdrawals, and using a company car above her allowance. The court rejected these claims as well, citing a lack of concrete proof of fraud or personal enrichment. While acknowledging that the company’s financial administration was “messy,” the court noted that internal finance and external controllers had not flagged these issues for years. The manager argued that the expenses were part of a company culture of gift-giving and were used for business purposes, a defense the company could not sufficiently rebut. This underscores the high burden of proof required to turn administrative sloppiness into a successful legal claim for fraud.
However, the company did not leave empty-handed. The court found the manager liable for damages in two specific areas: using company staff, on company time, for her private side-business and for personal chores like gardening and moving house. The manager’s defense that this was part of a “family-like” company culture was rejected. The court ruled that using company-paid employee hours for personal gain constitutes an unlawful act and unjust enrichment. Schoonzorg was granted permission to proceed to a separate hearing to determine the exact financial value of the damages for this misappropriation of staff time.
SOURCE: Rechtbank Noord-Holland
