Since August 1 of this year, the law (Section 7:653a of the Civil Code) has provided that the employment contract may no longer contain a prohibition on ancillary activities (“ancillary activities clause”) unless there is an “objective reason for doing so.
This means work in addition to the current position with the employer. This may also include work that the employee performs independently.
Ban on ancillary activities
The ban on ancillary activities is certainly not absolute. An additional work clause may be included in case of an objective reason, which does not necessarily have to be included in the employment contract in advance. The employer may also communicate the objective reasons at the time the employee requests permission for the ancillary activities.
Examples of “objective reasons,” according to the explanation of the law, include the health and safety of the employee, the protection of the confidentiality of company information, the integrity of a public service, the avoidance of a conflict of interest, or the violation of a legal requirement. For the last example, consider a violation of the Working Hours Act.
If the work is performed during the employer’s regular working hours, a ban on ancillary activities need not be accompanied by an objective reason. After all, Section 7:653a of the Civil Code deals with ancillary activities ‘outside the work schedule’ or ‘outside times when work is performed’. It may therefore be advisable to make a distinction in the ancillary activities clause between ancillary activities within and outside normal working hours.
The case law that has appeared to date on ancillary work is very limited. Below is an overview
Being transparent about ancillary activities
In a case before the Den Bosch Court of Appeal, there was no ban on ancillary activities, but the employee was expected to be transparent about the ancillary activities he performed. The employee was employed by an aircraft manufacturing company. He was required to make many business trips. His employer expected employees to complete an annual form to report any outside activities. The worker had filled out the form in 2015 and 2016 that he would perform translation work for his partner’s family business. His employer found out in 2021 that the employee had additionally been registered as a statutory director for that family business since 2015. The failure to report this was considered culpable by the Court, resulting in the termination of the employment contract. Not as seriously culpable, which did give the employee the right and entitlement to the transitional compensation.
Integrity of public services and an objective justification
In a case before the Zaanstand subdistrict court, an arborist employed by the Municipality of Zaanstad claimed that it should be ruled that his ancillary employment clause was void and invalid. The Subdistrict Court rejected the claim. In the opinion of the Subdistrict Court, the employer, a municipality, may in this case prohibit the employee from performing ancillary activities within the area of the municipality. In addition to his position with the Zaanstad municipality, the civil servant had consistently performed ancillary activities since 2014. Those ancillary activities amounted to him working on commission as an arborist for companies and individuals in and outside the municipality of Zaanstad, which included pruning work and caring for and maintaining greenery in gardens. Prior to 2017, he had verbal permission for these ancillary activities and from 2019, he received written permission for the two-year period.
Effective May 31, 2021, the official’s position was changed from Arborist to Supervisor Green. Given this promotion, higher demands were placed on the official’s integrity and he was no longer allowed to perform outside activities within the municipal boundaries of Zaandam. The employee challenged this new ban before the subdistrict court.
On June 8, the subdistrict court ruled that the ban on ancillary activities must be appropriate, suitable and necessary to protect the employer’s interest, also in light of the fact that this is a restriction of a fundamental right. The interests of the employee must also be taken into account.
The Subdistrict Court ruled that the integrity of government services could provide an objective ground of justification for the municipality as referred to in Section 7:653a (1) of the Civil Code and the Transparent Employment Conditions Directive. After all, that integrity of public services is specifically mentioned in Article 9 (1) of the Directive as objective reasons to restrict certain ancillary activities. Also in the legislative history of article 7:653a BW, integrity of public services is mentioned as an objective reason to prohibit ancillary activities. In short, the prohibition of ancillary activities is objectively justified and upheld.
Case law from before August 1, 2022
From case law before the new legal regulation on ancillary activities came into force, we also saw a certain line in the case law of circumstances that can be considered an objective reason to prohibit ancillary activities (even without an ancillary activities clause):
Normally, ancillary activities are prohibited if:
- The employee’s ancillary activities compete with the employer.
- The employee performs ancillary work for competitors.
- The employee’s ancillary activities result in damage to the employer’s image.
- The employee’s ancillary activities result in the employee not performing well at his full-time job.
Conclusion
Whether ancillary activities are permissible and what qualifies as an objective reason for a legally valid ancillary activities clause can be inferred primarily from existing and future case law. As a result, it is unclear to most employers and employees what the rules on ancillary activities are. To avoid an employment dispute over this with an unpredictable end, please contact Richard Ouwerling, lawyer specializing in employment law.
