Rent and Real Estate

Suppose your employee has been sick for almost a year. He holds a defining position within your company. You therefore want to appoint a replacement, because it looks like the sick employee will not be able to return to his original position. Is this allowed?

If it were up to the legislature, yes, but not at this time.

Bill on reintegration obligation second year of illness

A bill is pending, which offers small and medium-sized employers the possibility to fully focus on reintegration in the second track, i.e. reintegration with another employer, from the start of the second year of illness (no earlier and no later). Under conditions, second-track reintegration may be closed.

Completion of the reintegration first track

Closing the first track with the current employer is possible if the employee agrees. The consent by the employee is entirely voluntary, must be in writing, the employee must be demonstrably informed (in writing) of the two-week reflection period, and the employee is free to attach any additional conditions to the consent.

UWV permission?

If the employer and the employee have not reached a joint agreement on the closure of the first track and the employer still wants to close the first track, he must ask the UWV for permission.

After the conclusion of the first track and after the end of the notice period, the employer can ask the UWV for permission to terminate the employment contract, regardless of whether the employee is sick or better.

Advisory Council for the Judiciary

Earlier this year, the Council for the Judiciary advised on this bill, stating that it does not provide relief from the (long) obligation to continue paying wages, which is perceived as burdensome by SMEs. Furthermore, the necessity of the proposal is questioned. In the current situation, the employer can have the job temporarily filled by a temporary worker or a seconded employee. A fixed-term employment contract, for the duration of the employee’s illness, can also be entered into.

Moreover, the Council does not expect this bill to lead to more indefinite contracts. Caution remains necessary in this regard, given the duration of two years of wage payment.

Finally, according to the Council, the new ground for termination adds little to the current system of dismissal, where after two years of illness, parting can be done anyway through a vso or through the UWV.

Therefore, it remains to be seen whether the new administration will pass this bill and send it to the EK. If so, you as a small employer will have faster clarity in the reintegration process.

Questions about reintegration sick employee?

Do you have questions about the reintegration of a sick employee? Or are you curious about the status of this bill. Please contact Richard Ouwerling.

The AVG states that testing employees for substance use is not allowed. According to the Personal Data Authority, it is only permissible to have employees undergo alcohol and/or drug testing if there is a legal basis for doing so.

Consent for alcohol or drug test

For now, the permission is there only for certain professions in the Shipping Act, the Railways Act, the Local Railways Act, and the Aviation Act. Consider, for example, checks on pilots and train drivers. They may be required to take a breathalyzer test because they are responsible for a large group of passengers during their work.

On May 10, 2022, the Minister of SZW announced in a letter that the Working Conditions Act will be amended to allow testing. The amendment to the law will first give companies covered by the Major Accident Hazards Decree (Brzo companies) these testing options. This involves about 400 companies where testing for specific functions will soon be required. To be allowed to test, an employer must have a proper alcohol, drug and medication (ADM) policy (tool). This bill is still in the pipeline and it is unclear, given the outgoing administration, whether this will become new legislation.

Alcohol or drug test to prevent workplace accidents

Many companies, where the risk of workplace accidents is high, do test their employees for alcohol or drugs according to their regulations. So that is formally against the law, but according to these companies (mostly rightly) privacy is secondary to safety. These employers invoke their right of instruction (art. 7: 660 BW). This is limited by good employment practice. If the employer’s regulations interfere too far with the right to privacy, the result may be that these regulations do not stand.

There is not much case law on this point. Based on a Supreme Court ruling, among other things, it seems that taking alcohol and drug tests at work is permitted, provided strict conditions are met (necessity, proportionality, subsidiarity).

Employer’s duty of care

An employer may argue that, given the nature of the business activity, it has a far-reaching duty of care (necessity), so the right to privacy must give way somewhat (proportionality). Furthermore, the employer could argue that a breathalyzer test in the case of suspected alcohol is much less invasive than a blood test, thus meeting the requirement of subsidiarity. Employers can lay down these rules in a so-called ADM policy. The Works Council has a right of consent. Should an employee argue in any case that the ADM policy and/or the test were not permissible, even then, in labor cases, the evidence can almost always be used. Excluding illegally obtained evidence is not common.

Conclusion

If you have any questions on this topic, please contact Richard Ouwerling, an attorney specializing in employment law.

Employee termination: ‘We are going to quit’, clear and unambiguous?

It is more common than thought: an employee terminating their job in an emotional state. This termination may obviously be due to a conflict or discussion at work (e.g. about reintegration). It may also be that the employee feels pressured by his employer to quit.

Often, the employee only realises afterwards that he is then not entitled to WW benefits. The employee changes his mind and wants to go back on the termination.

Employee termination: clear and unambiguous

Any employee can terminate his employment contract. This can be done verbally or in writing. In a conversation, an employee makes a remark like “I’m not coming back here” or “I’m quitting”. This can therefore also be seen as a formal termination of the employment contract under circumstances.
However, there must be a clear and unambiguous statement by the employee, aimed at termination. This requirement does not apply to the employer in case it has given notice.

The employee is bound by the notice unless there is a lack of will, such as threat, fraud or abuse of circumstances. The employee must invoke this within two months. If he fails to do so, the termination is fixed.

The employer certainly has a duty to investigate in case of verbal or emotional termination. The extent of this duty to investigate depends on various circumstances.

We are going to quit is not a direct termination of employment contract

A good example of a termination that was not seen as clear and unambiguous is that of a head coach of FC Volendam. Here, the arbitration tribunal ruled that the media statement “We are quitting” did not constitute a clear and unambiguous termination will.

The Arbitration Committee (and also the North Holland District Court) considered – with reference to Supreme Court case law – that an employer may not quickly assume that an employee has given notice of termination given the far-reaching consequences of voluntary termination (no entitlement to benefits and transition compensation). Furthermore, the key issue is whether, given the circumstances, the other party was reasonably entitled to construe the statement as a termination. In the present situation, there was reason for the employer – if it believed there was a termination – to investigate whether the employee had intended a termination. After all, the statement was addressed to the media. The employer’s press secretary was only in the cc. Also, the content of the statement “We are going to quit” is not a direct termination. After all, this could also mean that the employee would quit at FC Volendam in the future.

Notice period and interim termination?

The employee must observe a notice period, except when terminating during the probationary period or for an urgent reason.

A fixed-term employment contract can only be terminated prematurely if this has been agreed in writing. The employee who terminates without a notice period is liable for damages over the non-observed notice period.

Termination during illness?

If an employee terminates while sick, this may constitute an act of prejudice towards the UWV. The employee is then not entitled to ZW.

Conclusion

• The employer should ensure that an employee understands that he may lose his right to ZW benefit, WW benefit and the transition allowance.
• Give a reflection period to the employee who terminates in an emotional state.
• Confirm the termination in writing. Address the circumstances of the case and state that you have made the employee aware of the consequences.
• If in doubt, seek legal advice immediately.

Want more information on employee termination? Contact Richard Ouwerling. He is an employment law lawyer at LVH Advocaten in Rotterdam and deals with the termination of employment contracts.

Abuse of alcohol or drugs can lead to major problems in the workplace. Think of unsafe situations, dysfunction and regular and/or long-term disability. The employer sometimes wants to unilaterally terminate the employment contract in such a situation. What are the possibilities.

Dissolution by the subdistrict court?

Of course, whether dissolution is possible depends on the circumstances of the case.

If addiction is an issue, it is often assumed on medical evidence that the employee is incapacitated. The employer then runs up against the ban on notice (during illness). Since the introduction of the WWZ, the subdistrict court tests whether the reasons for termination are related to the ban on notice. If there is the slightest connection to this prohibition on notice, a request for dissolution (for example, on the grounds of primarily culpable conduct and, in the alternative, a disrupted working relationship) will fail.

However, when an employee fails to fulfill his reintegration obligations without good reason, the prohibition on notice can be set aside. This can of course consist of not cooperating with a plan of action or not following the instructions of the occupational health physician. If the employee seeks treatment for his addiction or terminates his treatment (without good reason) prematurely, this also qualifies as a violation of these reintegration obligations.
If, for example, the (rehab) clinic would argue that the treatment is no longer of any use because the employee keeps relapsing into his addiction, then dissolution could also be considered.

Instant dismissal as an alternative?

Drunkenness or other debauched behavior (drug use) can also be an urgent reason for summary dismissal. If the behavior is serious enough, weighed against the personal circumstances of employer and employee, in the majority of cases the summary dismissal will stand. The employer does not face a notice prohibition when summary dismissal occurs.

However, often the transitional compensation must still be paid.
On the one hand, it is established case law of the Supreme Court that no culpability is required for the acceptance of a summary dismissal. In case of addiction, often no culpability will be assumed, but this therefore does not affect the urgent reason. On the other hand, there is always a silver lining. If there is no serious culpability (i.e. in the case of addiction), the employee retains his entitlement to the transitional compensation.

Thus, a summary dismissal followed by the offer of a settlement agreement containing the transitional compensation can be a good alternative to a complex and unlikely dissolution procedure (with appeal).

More information?

Are you dealing with an addicted employee and would you like to know more about reintegration, dismissal or a legally valid ADM policy? Then take part in LVH Advocaten’s latest labor law meeting on October 26. Other current labor law developments will also be discussed.

Suspension of employee; when and for how long?

Today, the summary proceedings in which Tom Egbers is demanding the lifting of his suspension by NOS after a year take place. The questions that come into play here are: when can you suspend an employee and isn’t a year of suspension far too long?

Suspension and non-action; the difference

A suspension also prohibits the employee from performing his work. The term suspended, unlike suspension, is used in a situation where there is no culpable action by the employee. However, in case law, the term suspended has effectively the same meaning as a suspension and the same employment-law consequences.

Nature of the measure of suspension

There are two types of suspension. As an order measure or sanction measure.

As an order measure to restore calm in the workplace. The employer must have compelling interests against which the employee’s interests are outweighed.
Another order measure may be that the employer wants to terminate the employment contract and suspends the employee in anticipation of this. It could also be that the employer wants to terminate the employment contract after an investigation and therefore maintains the suspension. Wanting to terminate the employment contract is in itself insufficient for (maintaining) suspension. There must be additional circumstances. The employer must have a good weighty reason for this, e.g. that the employee’s presence has negative consequences for business operations (loss of customers, major damage, justified fear of unrest on the shop floor, fear of frustration investigation).

As an employer, you can also impose a suspension as a punishment. You must then communicate this to the employee immediately (and put it in writing). Again, reasonable and sufficiently serious grounds are required, which outweigh the employee’s overriding interest in continuing to perform his work. After all, a suspension is always diffuse in nature.

Good employment practices

According to established case law, the employer must behave as a ‘good employer’ when suspending or suspending an employee. This means that it would be wise to:

• weigh up all the circumstances of the case and the interests at stake and describe them in the letter setting out the suspension (or suspension from duty);
•  indicate that a less severe remedy, such as an official warning or final written warning, will not suffice;
• give an estimate of how long the suspension will last;
• finally, indicate that salary and holiday pay will be paid as long as the suspension continues.

Communication of reason for suspension

The reason must be communicated to the employee immediately. Suspending an employee without giving reasons is unlawful (Amsterdam Court of Appeal 8 March 1974, NJ 1974, 487). By clearly communicating the reason by the employer to the employee, the employee may be able to prove the falsity of the reason or it may appear that the reason given would not be reasonable.

Substantive review

As a basic principle, a ‘good employer’ may only deny an employee the opportunity to perform the agreed work if the employer has reasonable grounds for doing so. Those grounds must be sufficiently serious, given the employee’s, in principle, substantial interest in continuing to perform the stipulated work. This balancing of interests is not tested marginally by the court, as the following standard suspension ruling shows.

A judge will therefore test a suspension on all the circumstances of the concrete case, such as:

• the seriousness of the employee’s conduct;
• whether the employer can be required to allow the employee to return to work;
• the duration of the employment relationship;
• the employee’s position.

Claim for reinstatement

A suspended employee can therefore try to force reinstatement in summary proceedings. The following test applies to a claim for reinstatement:

• First, the weighty interest in suspension must again be made plausible (see above);
• Next, it must be assessed whether granting the reinstatement claim would not lead to an untenable situation in the workplace.

Interim relief judges apply the principle of reinstatement, unless it is plausible that this will lead to an unworkable situation, which is detrimental to the employer’s business.
If the suspension lasts too long, this may be grounds for the court to order the employer to lift the measure. Earlier, the ast Brabant District ECourt ruled that a suspension of more than five months by the UWV, without further measures, was too long. It is therefore also certainly not inconceivable that Tom Egbers will be proved right in the summary proceedings he filed.

Please note that an applicable collective agreement may explicitly specify the circumstances under which an employer can impose a suspension. In addition, the collective agreement may state whether or not the employer is liable to pay wages in the event of suspension as a disciplinary sanction. Incidentally, the basic principle is that the employer must continue to pay wages in the event of a suspension. An exception may be if the suspension falls entirely within the employee’s sphere of risk, for example if he has been taken into (provisional) custody.

Conclusion on suspension

Suspension should not be taken lightly. There are so many legal hooks and eyes to a suspension, that it is wise to seek legal help when you want to suspend or suspend someone. After all, suspending an employee unfairly or for too long can lead to an employment conflict and possibly entitle you to fair compensation.

If you have any questions about suspension or non-action, please contact Richard Ouwerling of LVH Advocaten.

Your employees are entitled to vacation days, but sometimes they take too many. May you set off excess vacation days against salary without consulting your employee?

Set off leave balance during employment

The law stipulates in which cases you as an employer may set off claims against wages during employment. This is allowed, for example, if your employee must pay compensation, has outstanding fines or has received too much pay. However, a claim due to excess vacation time is not included in the law. Setoff is therefore not allowed, unless a contractual provision allows it. So don’t forget to include this in the employment contract.

Set-off can only take place up to a maximum of one-tenth of the salary per month. Also, your employee must always receive at least the minimum wage. Any claims can therefore only be recovered from the wages your employee receives above the minimum wage limit.

Set off leave balance at the end of employment

The possibility of set-off at the end of employment is broader. Settlement with wages is possible, if those wages do not fall below the so-called ‘attachment-free foot’. This means, that you have to pay at least about 90% of the social security standard to your employee, so that your employee can at least pay his fixed expenses that month. Because of this broader set-off power, you and your employee can also agree by contract, that you will refund or set off excess vacation days at the end of employment.

What if you have no contractual set-off power?

That issue came up, among others, in an Oct. 18, 2021 ruling by the Central Netherlands District Court.
The common thread is that as an employer, you are responsible for the creation of a high negative leave balance, especially in the case of a temporary employment contract. You should not assume that this will be restored during the course of a subsequent year by working unpaid additional hours (the “time-for-time” system). The negative balance should not be so high that it cannot be made up by your employee during employment, with the result that you have to set off a (too) large amount against the salary. Of course, your employee also has his or her own responsibility in this.

In an employment relationship, where your employee works too few hours too quickly and where incentives are lacking to prevent arrears, this is primarily the responsibility of you as the employer.

Informing about and recording vacations

It is therefore in your best interest to regularly inform employees of their shortfall in accrued vacation days. In addition, you would be wise to lay down the settlement option by contract.

Conclusion

If you have any questions on this topic, please contact Richard Ouwerling, a lawyer specializing in labor law.

In a previous article, we wrote about the actions employees can take against a non-competition and/or non-solicitation clause. A non-competition clause can be challenged by employees if the clause unfairly disadvantages the employee. But how should an employer defend against this? In this article, on the basis of a concrete example, a judgment from the Amsterdam Court of Appeal, we examine in more detail the suspension (interlocutory proceedings) and nullification (proceedings on the merits) of a non-competition and non-solicitation clause and the balancing of interests that takes place.

Amsterdam Court of Appeal ruling: suspension of non-competition clause balancing interests

What was going on? The employee had been employed as a Trader Analyst for about 9 months when she terminated the employment contract. The employee then entered into a settlement agreement with the (former) employer in which they terminated the employment contract by mutual agreement and agreed that the non-competition clause would remain in effect. Just under a week later, the employee informs the employer that she will be working at another company as a Quantative Trader Associate. The employer responds, stating that the non-competition clause does not allow for this. The employee still joined the new employer.

The employee claimed before the subdistrict court, primarily, complete suspension of the non-competition clause and, in the alternative, that the clause be limited to such an extent that she could enter the service of the new employer. The subdistrict court granted the subsidiary claim. The former employer appealed.

Appraisal of suspension of non-compete clause on appeal

On appeal, the former employer put forward several arguments as to why the non-competition clause should be enforceable. The court of appeal thus began to assess whether the employer has an interest in enforcement. In particular, it was important whether the former employer could make it sufficiently plausible that the employee’s transfer would affect the former employer’s business. The court concluded that the employee did not have such knowledge of relevant commercial and technical information or unique work processes, or competitively sensitive information that the new employer could use. In doing so, the court considered it important that although the companies were both active in the field of cryptocurrency, at the ex-employer the employee was only active as a Trader Aanalyst in the Equity Options team and not in the Crypto Derivatives team. Thus, there was no evidence that the employee had gained knowledge and experience in cryptocurrency options trading and could disadvantage the ex-employer.

It follows from these considerations that the mere fact that employers are in the same industry does not prevent an employee from making the switch. The employee’s position and knowledge are of great importance in determining whether the non-competition clause can actually be enforced, even if the clause is validly agreed upon. The court then went on to weigh the parties’ interests. Among other things, the court found it significant that the employee had been employed for less than nine months and had only started working on equity options after four months. The court also considered that the employee had a clear interest in free choice of employment and that the employee’s financial position had improved significantly.

This balancing of interests led the court to conclude that the employee’s interest in being released from the non-competition clause outweighed the employer’s interest in maintaining it, and that the employee was unfairly disadvantaged by the clause. Indeed, the employer could not make the concrete disadvantage caused by the transfer plausible.

Defense of employer for enforcement of non-compete and non-solicitation clause

As an employer, do you want to enforce the competition and relationship clause? If so, first have the clause reviewed by a lawyer or employment law attorney to determine the validity of the clause. Next, see if the clause is applicable to the situation. Finally, you can see if the clause can be enforced. It is important that the departure of the employee to a competitor can cause actual damage to the organization in connection with the knowledge and skills acquired during the employment.

Information about competition and relationship clauses?

Want to know more about the legal validity, applicability or voidability of competition and relationship clauses? Contact Richard Ouwerling, employment law attorney at LVH Advocaten in Rotterdam. He advises and litigates on competition and relation clauses.

Sick employee does not cooperate in reintegration: employer actions

A reintegration process starts when the employer reports sick. Previously, we wrote an article about the steps that should be taken in a reintegration process. But what if the sick employee does not cooperate? Which actions can you take as an employer to get the reintegration process back on track or can the employer fire the sick employee if he does not cooperate?
In this article we discuss the actions or measures an employer can or should take if a sick employee does not comply with the obligations arising from the reintegration process.

Actions of the employer in case of non-compliance with the reintegration obligations

First of all, the employer must determine what exactly the reintegration obligations are that are not fulfilled. This determines to a large extent the action to be taken.

Warning not to comply with reintegration obligations

Sending a warning letter is a good first step when the employee does not comply with the reintegration. The employer is well advised to make clear which obligations the employee has, such as appearing at the company doctor, cooperating in drawing up the plan of approach and performing suitable work. Subsequently, the employer can schedule a meeting to discuss the obligations during reintegration.
If the employee disagrees with the advice of the company doctor, it is good that the employer points out in the letter that the employee can request an expert opinion from the UWV on the disability and reintegration.

Announcement of wage suspension or wage cut

If there is already a reason for a wage freeze or wage suspension (see below), it can be announced immediately that a wage freeze or wage suspension will be implemented in the event of non-compliance within a certain period.

Suspension of wages after violation of control regulations

A company is obliged to draw up a sick leave policy. For more information see our article on this subject. This policy contains control regulations concerning work disability, such as the procedure for reporting sick, the obligation to pass on accommodation details and the obligation to attend the company doctor’s surgery. If these control regulations are violated without a valid reason, the employer is allowed to suspend the salary.
If the employee complies with the control regulations again, he is entitled to continued payment of wages with retroactive effect. The wages that were not paid during the suspension must still be paid. No statutory increase or interest is owed on those wages.
Note: the wage suspension must be announced. Therefore, if the employer intends to implement a wage suspension, the employee must first be warned that he has violated the control regulations and that the employer has reasons to suspend wages. This gives the employee the opportunity to comply with the regulations after all.

Wage freeze after breach of reintegration rules

In the context of reintegration, the employee must among other things cooperate in drawing up an action plan and must perform suitable work if the company doctor advises this. If the employee does not cooperate without a valid reason, a wage freeze can be imposed. It is important that the employer uses this measure in time. If the employee has not or not sufficiently fulfilled the reintegration obligations and the employer has been inactive, the UWV may extend the obligation to continue paying wages after the end of the waiting period (in principle 104 weeks after reporting sick).

Please note: here too, the wage freeze must be announced.

Dissolution of the employment agreement of a sick employee

Failure to comply with the reintegration obligations may ultimately also lead to dissolution of the employment contract. The subdistrict court may grant the dissolution in the event of (seriously) culpable act or omission. This is the case if the employee repeatedly violates the reintegration obligations despite the written reminders from the employer and the applied wage freeze. The prohibition on giving notice during illness does not apply. Note: employer must have a UWV expert statement.

Summarily dismissing a sick employee

In extreme cases, summary dismissal is sometimes even possible if the employee does not fulfil the reintegration obligations. In this case, there must be additional circumstances. These could include, for example, the employee going on holiday abroad for an extended period of time without the employer’s permission during the reintegration process (Court of Appeal ‘s-Hertogenbosch ruling).

Want to know more about actions of the employer in case of non-compliance with reintegration?

It follows from the above that the employer must timely intervene during the reintegration process, so a UWV wage penalty can be prevented. For this, sufficient means are available. Want to know more about the possible actions? Richard Ouwerling of LVH Advocaten in Rotterdam will be pleased to help you determine the right strategy. He can help you, for example, in drawing up a sick leave policy, drafting warning letters and conducting employment law proceedings.

Managing director and works council: how to achieve effective cooperation?

The works council is an important body within the organisation. They represent their members and have the necessary powers to do so, such as the right to consent and the right of advice. Effective cooperation makes it easier to implement important decisions within your organisation and ensures that those decisions are also supported within your organisation. So there is every reason to work on the cooperation with the works council, but how do you achieve that? The interests of the works council and the director are sometimes opposed, and the works council is therefore often seen as an opponent of the director. In this article we will tell you how to get closer to an effective cooperation.

Inform yourself in time about the rights of the Works Council

If you are aware of the rights and obligations of the works council, it will be easier for you to cooperate with the works council. After all, there need be no (or at least less) discussion about the content of those rights and duties. Do you have doubts about these rights and how far they extend? Please contact an employment lawyer to have this checked before communicating with the works council. Also give the works council the opportunity to turn to an employment law specialist.

Works council rights

Right to information: This means that the works council is entitled to information to enable it to perform its duties. The works council can request information itself (active information right) and the employer is obliged to provide information about the financial and economic position of the company and the social policy pursued (passive information right).

Consultation right: The managing director and works council are obliged to meet in a consultation meeting within two weeks after a reasoned request by one of them. Compliance can be requested from the subdistrict court.

Right of initiative: The works council has the right to make proposals. The works council cannot force the director to accept these proposals.

Right to advice: The Works Council has a right to advise on certain intended decisions. Section 25 of the Works Councils Act contains a list of decisions about which advice must be requested.

Right of consent: The Works Council has a right of consent to certain proposed decisions. Section 27 of the Works Councils Act contains a list of decisions for which consent must be requested.

Facilities: the works council has the right to call in experts, the right to training, the right to retention of salary while working for the works council and the right to conduct legal proceedings free of charge.

Regularly involve the works council in decision-making

Sparring informally

In addition to the rights under the Works Councils Act that have just been discussed, a director can also involve the Works Council in issues other than those on which it has the right to advise and consent. After all, the Works Council has a stimulating task with regard to subjects that affect the staff, such as terms of employment, working conditions, equal treatment and more. The more regular the consultation with the works council, the better. The works council should not feel like an afterthought; that creates the idea that the works council has no influence on decision-making. Regular and timely involvement of the Works Council creates trust. This can be done simply by planning a fixed moment to consult.

Works council involvement without right to advice or consent

Please note: is the works council involved without the right to advice or assent? As a director, it must be made clear that no advice or assent is requested, but that the director merely wants the works council to think along on a certain subject. Therefore, always assess first whether the subject requires advice or consent. Uncertainty? Richard Ouwerling of LVH Advocaten will be glad to help you.

Works council agreement

The powers of the Works Council can also be extended through a Works Agreement. The involvement of the Works Council can thus increase and this can be positive for your organisation. Primary employment conditions, for instance, are not a subject on which the Works Council has the right to advice or consent. However, the managing director could agree with the works council that the terms of employment are submitted to the works council for approval. This could make it easier for the staff to accept.

Formation of a tacit business agreement

Please note: a company agreement can be created tacitly. If the directors repeatedly request consent or advice, in writing, unambiguously and without reservation, on a subject that falls outside the right to consent and advice, a corporate agreement may be created. Therefore, always make a reservation if you, as a director, wish to informally spar with the works council and state that no consent or advice is requested.

Need a lawyer in Rotterdam in the field of works councils and employee participation?

Co-determination is a promising tool for every manager if it is used correctly. Richard Ouwerling of LVH Advocaten in Rotterdam is happy to help you set up works councils in the right way within your organisation. Richard Ouwerling can help you with the establishment of the works council, the conclusion of a works agreement, as well as he can guide you in the process of advice and consent.

Entrepreneurs like to work together “in good faith.” In other words, agreements are made verbally and the parties immediately start working together. That’s great, after all we want to get to work quickly and deal with legal matters as little as possible. However, it only has to go wrong once and regrets surface. If only I had put that in writing in a commission contract with the contractor / client.

So too with the commission contract. Our advice to entrepreneurs is therefore: good faith is nice, but well organized is better! Discuss the conditions with each other and have them put on paper by a lawyer. An important message here is that a commission contract does not have to be pages long. You put the basic agreements on paper (can also be done by e-mail) and the law will fill in the rest.

In this article, we would like to provide some points that can be covered in the assignment agreement.

Duration and termination of assignment agreement

An important agreement that you should lay down is the duration of the contract. Will a specific assignment be completed or will the parties continue to work together for a longer period of time? This information is important, not only for the future perspective, but also for the possibilities of terminating the assignment.

For example, a contractor may, in principle, only terminate the open-ended contract and the fixed-term contract may only be terminated for important reasons. A client may cancel the assignment contract (indefinite and definite term), unless it concerns a professional client and deviating arrangements have been made. For example, the parties can agree that both parties can cancel the contract (possibly under certain conditions) with due regard for a notice period.

Compensation contractor

Of course, as a professional contractor, you also want to be paid. It is therefore wise to agree on that remuneration in writing. Are you going to work on the basis of an hourly rate, a piece rate or a fixed amount for the assignment. Also think about the expenses. Are they included in the fee or will they be for the account of the client or contractor.

If you do not agree on a fee, the contractor can still claim a reasonable fee. Of course, this is not a desirable situation and it is wise to put the agreed remuneration in writing.

Intellectual Property Contractor

As a contractor and client, you will have to deal with intellectual property rights. The main rule is that the creator (the one who delivers a creative performance) is the owner of the intellectual property rights, even if the client has commissioned the creation of a text, design or invention. It is possible to deviate from this main rule. After all, the client wants to use the intellectual property. So agree for what purpose the client may use the work delivered (user license) or arrange a transfer of copyright.

Please note that if the performance was created under the direction and supervision of the principal, then the copyright could lie with the principal. This depends on the instructions given and the freedom the contractor had.

Non-competition and relationship clause in assignment contract

We are all familiar with non-competition and non-solicitation clauses from employment contracts, but they can also be used in assignment contracts. Case law provides a similar test for assessing the legal validity of a non-competition clause. A non-competition clause is not automatically valid. It must be in writing and may not violate the fundamental right of free choice of employment (Article 19 of the Constitution). This may be the case if the duration of the clause is unnecessarily long or otherwise too broadly formulated.

The rule for the contractor is therefore: do not just sign a non-competition clause. And for the employer the following applies: a non-competition clause may be used to protect the business interests, but do not formulate the clause too broadly so that it does not infringe on the contractor’s freedom to choose his work.

Need help drafting assignment agreement?

We would be happy to help you draw up a contract of assignment so that you can focus on your business. Would you like more information or a free consultation about the possibilities? Please contact Richard Ouwerling of LVH Advocaten. She can tell you everything about working relationships, such as the commission contract.

The future labour market

Minister Van Gennip (Social Affairs and Employment) sent a package of labour market measures to the Lower House on 3 April (Kamerbrief over voortgang uitwerking arbeidsmarktpakket | Kamerstuk | Rijksoverheid.nl). The Minister largely follows the so-called ‘Borstlap Committee’ and the SER Advice and gives an advance insight into what the labour market should look like (at the latest) in 2025, according to the Cabinet.

The future of the labour market: level playing field between permanent contract and self-employed/flex worker

The playing field between the self-employed and the employee must be levelled so that employees are not (forced to) wrongly choose one form of contract or the other. The tax benefits of self-employment are being phased out. Moreover, a compulsory disability insurance for the self-employed is being worked on.

The differences between permanent and flexible contracts will also be reduced. As a result, employers will – the minister expects – more often opt for a permanent contract. That remains to be seen, as the dismissal law will not be further relaxed and the legal obligation to continue paying wages in case of illness will remain at two years. In addition, many employers need certain flexible shells to cope with the ups and downs in the workload.

1. Flexible workers get more security

On-call contracts, such as zero-hours and/or min-max contracts, will be abolished from 1 January 2025. These will be replaced by a ‘basic contract’, which has yet to be fleshed out. Scholars and students can still continue to work on the basis of current on-call contracts. The employer’s flexible shell will thus be further curtailed. This is again expected to lead to an increase in self-employed workers.

2. Smaller firms’ obligations for long-term incapacitated workers are reduced.

From 1 January 2025, small and medium-sized employers (up to 100 employees) may determine by mutual agreement that reintegration with their own employer (‘first track’) is no longer reasonable and focus entirely on reintegration with another employer (‘second track’). Employers, on the other hand, remain obliged to continue paying wages during illness for two years. They are also co-responsible for the reintegration process. The incapacitated employee retains the right to return to his own job, should he recover in the second year of illness and if the employer has not yet permanently filled his original position.

3. In a crisis or calamity, a company can retain employees

There will be a Crisis Staff Retention Scheme (‘CP’), formerly part-time unemployment. Employers can claim this if there is at least 20% less work across the company. The scheme will be aimed at coping with crisis and calamities, which fall outside the regular business risk (e.g. in case of another lockdown due to a pandemic). The CP implies that only 80% wages need to be paid on the number of hours not worked in a crisis situation. Of this, the employer can then claim back 60% under the scheme.

4. So-called false self-employment among self-employed workers will be reduced

There are almost 1.2 million self-employed in the Netherlands. Among them are also a large number of “false self-employed”. In fact, Deliveroo’s meal deliverers, Uber’s drivers were also pseudo self-employed.

The lack of protection in case of illness and dismissal and the fact that these self-employed workers (wrongly) only contribute to social security to a limited extent is seen as problematic.

There will therefore be legislation, which will define the ‘organisational embeddedness of the work and the worker’. This is the decisive criterion on the basis of which a commission contract may turn out to be an employment contract after all. In addition, this should combat false self-employment. Moreover, it will become easier for self-employed persons to claim an employment contract. Indeed, there will be a civil-law legal presumption of an employment contract linked to an hourly rate (a possible rate below €35 per hour). If the zzp’er’s hourly rate is higher, this will be a contraindication for a contract for services.

Finally, the enforcement moratorium by the tax authorities will finally be lifted in 2025 and the (to be adapted) DBA Act will be enforced again. The question is, however, whether the tax authorities will then have sufficient capacity to actually enforce it.

Questions about the future of the labour market and implications for your organisation?

In short; another set of far-reaching labour market changes are on the agenda. Do you have questions about how these labour market changes will affect your organisation? Then contact Richard Ouwerling, employment law lawyer at LVH Advocaten in Rotterdam for more information.

Since the beginning of the corona crisis, hybrid working has been the norm. The number of corona infections is slowly increasing again. It is not inconceivable that some companies will soon again require their employees to work wholly or partially from home.

Agreements on working from home

Employers and employees should make their own arrangements for an appropriate division between on-site and home work. Currently, only half of companies have a home-working policy. Research shows that a large majority of employees believe that working from home should be well regulated. Flexibility in this policy is a must, even given the ever-changing government recommendations.

Role of works council

The works council (OR) can also play an important role here. Not only can the Works Council push for an adequate complete homework policy, but it has a right of consent under Section 27 of the Works Councils Act (WOR) when introducing or changing a homework policy or arrangement. After all, these are regulations on working conditions and conditions of employment. For example, a homeworking policy will often include rules on working hours, working conditions, assessment systems and employee tracking systems. Even though homeworking is not mentioned as such in the WOR, the Works Council is still required to give its consent because this policy affects working conditions and terms of employment.

No consent

Without consent, the business owner cannot implement the work-at-home policy, which looks at the above points. Does the entrepreneur do this anyway? Then the Works Council can invoke the nullity of this decision within one month after the announcement of the homework policy. The entrepreneur may be able to go to the subdistrict court for substitute consent if the Works Council withholds its consent.

‘Right of initiative’ works council

If the employer does not want to introduce a homework policy or homework regulation, the Works Council can take the initiative with the so-called ‘right of initiative’. A proposal to this end must be substantiated in writing by the Works Council (and discussed at least once in a consultation meeting). The employer is not obliged to implement the Works Council’s initiative proposal, but must give reasons why it refrains from doing so.

Advisory right

The strange thing is that for a new home-working policy to be introduced, the Works Council is also obliged to advise on certain points (see Article 25 WOR). For example, if working from home leads to an important change in the organization of the company or to the introduction or modification of an important technological facility (think of switching to a new work system). Or perhaps the home working leads to important investments for the entrepreneur and he must therefore seek advice.

Conclusion

In short, it is important for both the entrepreneur and the works council to consider the consequences of hybrid or home working and what rights (consent or advice) may be associated with it. In smaller companies, the staff meeting or staff representation may have certain co-determination rights. It is therefore important to involve these co-determination bodies in the process about working from home at an early stage.

More information or advice on a work-at-home policy?

Would you like to know more about the rights of the Works Council with regard to homeworking policies? Or do you want to introduce such a policy within your company and have it drafted or monitored? Contact Richard Ouwerling, employment law attorney at LVH Advocaten.

The on-call worker as a flexible shell; 6 points to consider

If your company’s staffing requirements fluctuate widely, an on-call agreement can be a solution. With an on-call agreement, a flexible layer of employees can be formed and employees can be deployed for a varying number of hours each time.

There are various on-call agreements, such as a zero-hours contract and a min-max contract. The use of on-call agreements has some legal concerns.

1. Call and notice period

The standard rule is that the employee must call for work at least 4 days in advance, e.g. by e-mail or WhatsApp message. The notice period for a zero-hours contract is the same as the on-call period: 4 days.

2. Minimum payout of 3 hours per call

Every time you call up an employee, you must pay the employee a minimum of 3 hours’ pay. Even if he only works for 1 hour.

3. Exclude legal presumption of work scope

In principle, the employee can invoke the legal presumption of work scope. This means that the contract automatically changes in hours to the number of hours the employee has worked on average over the past 3 months. You can exclude this legal presumption in the first 6 months of the contract.

4. Notification and higher WW contribution

As an employer, you are now obliged to report on the payslip that the employment contract is an on-call contract, and you also pay a higher WW premium for on-call workers than for permanent employees.

5. Fixed scope of employment

You must make your employee employed by you on an on-call contract a written offer of a fixed scope of work after every 12 months. When calculating those 12 months, you must include the period of hiring and/or legal predecessors.
The written offer for the fixed scope of work must be at least equal to the average scope of work in those previous 12 months. It is up to the employee to respond to it with a refusal or acceptance of the hours offer within one month.

Did you fail to make the offer or make it too late, or you cannot prove that the offer made was refused? Then, even after a longer period of time, your employee can still claim the salary that was lost as a result from that thirteenth month. The employee has then not worked that difference in hours, but still has a wage claim to recover from your company.

6. Duty to report unpredictable work pattern

Since 1 August last, the Transparent and Predictable Terms of Employment Act has come into force under a European Directive of the same name. This law stipulates that in case of an unpredictable work pattern, the employer must agree on a reference period (days and hours) during which the employee can be called up. If the employer does not comply with this or the employee is called outside the framework, the employee may refuse the call.
Need help drafting an on-call contract?
So far, the main points of interest in an on-call contract. As an entrepreneur, do you want to use on-call employees and need help drafting a watertight contract? Contact Richard Ouwerling, lawyer at LVH Advocaten in Rotterdam for more information.

In a previous article, we wrote about the importance of a scope review and avoiding a financial noose. In that article, it was about Booking.com facing mandatory affiliation with the industry pension fund for the travel industry.

This time it is the online supermarkets Picnic, Flink, Gorillas, Getir and Hofweb that are facing the collective bargaining agreement Food Industry. In this article, we discuss the judgment of the Central Netherlands District Court of February 28, 2024, as well as the importance of a scope review.

Assessment court scope of scope collective agreement

In the proceedings before the District Court, the supermarkets claimed a declaratory judgment that they do not fall within the scope of the collective bargaining agreement for the food industry. It follows from the relevant CBA that “employers who operate one or more stores that meet the description in Article 2 under a”. The Court indicated that this provision should be interpreted using the “collective bargaining standard.”

Interpretation via collective bargaining standard

The collective bargaining standard means that a provision of a collective bargaining agreement must be interpreted according to objective standards. The reason for this is to protect third parties who were not present at the collective bargaining negotiations and thus are not familiar with the parties’ intentions. Such an explanation does not assign significance to documents other than the text of the collective agreement and explanatory notes, as follows from the DSM/Fox judgment.

The court considered that from the text of the CBA in conjunction with the definitions, that the CBA applies not only to employers who themselves operate a (virtual) store, but also to employers who are part of a group whose activities are related to the operation of a store by another legal entity in the group. Thus, operating oneself is not a requirement to fall within the scope. Since Picnic c.s. is predominantly engaged within the group in the sale of food through a virtual store and home delivery and the other companies perform activities related to that, they are covered by the collective bargaining agreement.

The importance of a proper scope study thus follows from this ruling. In its absence, an organization can be unpleasantly surprised with the applicability of a collective bargaining agreement with all its consequences. Picnic et al. have to apply the collective bargaining agreement that has been declared generally binding for the period of the declaration. This will require Picnic to make various changes to salary payments, rosters and more.

More information about the collective labor agreement and industry pension fund?

If you would like more information about the possibilities of a scope investigation for your organization to see if you are covered by a collective agreement or industry pension fund, please contact labor lawyer Richard Ouwerling.

New rules on wage transparency on the way

EU directive on pay transparency and the pay gap remain a persistent phenomenon. Despite existing legislation stipulating equal pay, figures from Statistics Netherlands show that women still earn on average 10.3% less than men for equivalent work. That is why European legislators have not been idle: on March 26, 2025, the Dutch government published a draft bill to implement the European Pay Transparency Directive (EU) 2023/970. These new rules will bring about radical changes for employers.

The EU Pay Transparency Directive and the pay gap in the Netherlands create new obligations for employers. The core of the directive is that employers must be more transparent about their remuneration structures and must be able to justify pay differences. This means (among other things) that employees are entitled to information about remuneration criteria and that employers are obliged to report periodically on pay differences between men and women. The most important change is that the burden of proof is shifting. From now on, employers must demonstrate that they pay equally. If they cannot do so, they must explain the difference.

The Netherlands should have implemented the directive by June 7, 2026 at the latest. However, implementation has been postponed. On September 15, 2025, the Informal Council on Employment and Social Policy announced that the Netherlands needs more time to implement the EU Pay Transparency Directive. Therefore, the target date for entry into force is now no later than January 1, 2027. However, the European Directive will already apply on June 7, 2026, and employees will be able to invoke this directive directly from that date. So now is the time to take a close look at your remuneration policy, also in the context of attractive employment practices.

Which (large) employers will be subject to the new rules?

The directive and the reporting obligation it contains initially apply to employers with 100 or more employees. However, the directive also contains an information obligation for employers with more than 50 employees (see point 3 below).

When are there 100 or more employees?

For the purposes of the Directive and the upcoming Dutch implementation legislation, the decisive factor is whether a company “as a rule” has at least 100 employees in the Netherlands. This criterion is in line with existing legal provisions, such as Article 2:153(2)(c) of the Dutch Civil Code and Article 2:263(2)(c) of the Dutch Civil Code (structural arrangement). This refers to the average number of employees over a financial year. Both full-time and part-time employees are included, as are temporary workers who are actually working within the company. Employees working abroad are not included in this threshold.

EU directive on pay transparency and the pay gap in the Netherlands: what will change?

Our government has opted for a ‘pure implementation’ of the European directive. This means that national rules will not be stricter than strictly necessary. Nevertheless, the consequences are significant. The most important changes are listed below:

1. Objective and gender-neutral pay structures
2. Employers will be required to use pay structures based on objective, gender-neutral criteria such as skills, efforts, responsibilities, and working conditions. These criteria must be clearly defined, for example in a collective labor agreement or job evaluation system.
3. Transparency before employment
4. Applicants must be given clarity in advance about the starting salary or salary range, based on objective criteria. Employers are no longer allowed to ask about an applicant’s current or previous salary, precisely to prevent a repeat of wage differences. Of course, applicants are still allowed to share their salary history of their own accord.
5. Wage transparency within the organization
6. Organizations with at least 50 employees must give employees the right to request written information about their own wages and the average wages of colleagues in similar positions. If the employer does not comply with these transparency obligations, the burden of proof in a claim for unequal pay is reversed: the employer must then demonstrate that no prohibited discrimination has taken place.
7. Reporting obligations for larger employers
8. Employers with 100 or more employees must report periodically on pay differences between men and women, including bonuses. These reports are partly made public via a national website. The frequency of reporting varies depending on the size of the organization. See below:

Number of employees Reporting period First report no later than

100 – 149 Every 3 years June 7, 2031

150 – 249 Every 3 years June 7, 2027

250 or more Every year June 7, 2027

1. Mandatory wage evaluation in case of differences
2. If the report shows that there are unjustified wage differences, the employer must take measures within a reasonable period of time, in consultation with the works council. In case of differences of 5% or more that still exist after six months, a mandatory wage evaluation will follow, including an analysis, an action plan, and an evaluation of previous measures. The works council must agree to this plan.
3. Role of the works council
4. The works council will play a central role in ensuring equal pay and monitoring compliance with the new obligations. This includes the right of consent to the remuneration policy, helping to resolve unjustified differences, and assessing the pay reports. In collective bargaining situations, trade unions can take over these tasks, provided that the collective bargaining agreement provides for this.

Practical tips and preparation

It is wise to take action now:

• Identify the number of employees: Calculate the average number of employees over the financial year, including part-timers and temporary workers.
• Document job classification system: Clearly define job descriptions and equivalent positions.
• Analyze remuneration structures: Investigate whether there are any unexplained wage differences and establish objective remuneration criteria.
• Implement reporting systems: Ensure that systems are in place that make it easy to report on remuneration differences on a regular basis.
• Involve the works council in good time: Discuss the current wage structures and the objective criteria.
• Evaluate regularly: Conduct internal audits and draw up improvement plans where necessary.
• Inform and train the HR department and management: Ensure that those responsible are aware of their obligations and know how to answer questions from employees.
• Communicate with employees: Inform employees in good time about their rights and how equal pay is guaranteed.

Conclusion

For companies with 100 or more employees in the Netherlands, it is essential to anticipate the Pay Transparency Directive in a timely manner. By anticipating the EU Pay Transparency Directive and the pay gap in the Netherlands in a timely manner, large employers can limit risks (such as claims for back pay) and comply with future legislation. Do you have questions about adjusting your remuneration policy in response to the Pay Transparency Directive? Please feel free to contact LVH Advocaten. We are happy to assist you.

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.

How final is the final discharge in termination agreements?

If employer and employee wish to terminate an employment contract by mutual agreement, they sign a termination agreement. A termination agreement often includes a final discharge clause. A final discharge clause ensures that parties do not have to renegotiate rights and compensation after the execution of the termination agreement. But how final is the final discharge clause in a termination agreement?

This article first discusses the importance of a final discharge clause in the termination agreement. It then discusses when a claim falls under the final discharge and the best way to formulate a final discharge clause. Finally, an illustrative reference is made to a judgment of the Court of Appeal of Den Bosch.

The importance of the final discharge in a termination agreement

Once employer and employee have decided to part company by mutual agreement, it is undesirable to have to renegotiate rights and obligations at a later date. The final discharge agreed in a termination agreement is intended to ensure that the parties have nothing more to claim from each other.

However, the final discharge in the termination agreement is not always final in practice. There are situations in which a discussion can arise about the question whether a claim does or does not fall under the final discharge, for example in the case of a “forgotten” claim.

What is covered by the final discharge in a termination agreement?

To determine whether a claim is subject to final discharge, the circumstances of the case must be considered. When interpreting the termination agreement the Haviltex-criterion is applied, which means that a judge not only interprets the final discharge clause linguistically, but also looks at the intentions of the parties and what they were entitled to understand between themselves. Various circumstances will be assessed, such as: the extensiveness of the negotiations, assistance by an agent, the knowledge and position of the parties and whether reservations were made.

Formulation of final discharge in a termination agreement

The discussion about which claims are subject to final discharge should therefore be limited as much as possible. This can be done first of all by recording in the stipulation what the parties have discussed. In other words, record all subjects which, according to the parties, are covered by the final discharge. This way the stipulation can be explained. In addition, specific subjects can also be excluded, so that there need not be any discussion about them.

Court of Appeal on the question: Does immaterial damage as a result of burn-out fall under the final discharge?

The Court of Appeal of Den Bosch ruled on the question whether immaterial damage as a result of an employee’s burn-out was covered by the final discharge clause. Employer and employee had entered into a termination agreement to end two proceedings. In 2015, employee fell on the job, after which she had to reintegrate. Later, after her full reintegration, a disrupted employment relationship arose and proceedings followed regarding the dissolution of the employment contract. The employee also instituted preliminary relief proceedings. During the hearing the parties agreed on an amicable settlement. The parties concluded a final discharge and only excluded personal injury. After concluding the termination agreement, the employee claimed non-material damages as a result of burnout. The Court of Appeal ruled that the damage relating to the burn-out was not part of the concept of injury as expressed in the final discharge clause. The reason was the background and contents of the two proceedings. For instance, the parties agreed that the ban on giving notice due to illness did not apply, there were no medical limitations according to the company doctor and furthermore, the employee had indicated that her stress-related complaints were no longer an issue. Furthermore, there was no evidence of negotiations on this point prior to the conclusion of the termination agreement.

Need advice from a lawyer in Rotterdam regarding final discharge of termination agreement?

As has become clear in this article, it is important to think carefully about the wording of a final discharge clause. The parties can limit the discussion as much as possible by formulating it correctly and appropriate to the circumstances.

Are you involved in negotiations about a termination agreement and do you want to know how to formulate the final discharge or are you having a discussion about a claim while you have agreed on a final discharge? Contact Richard Ouwerling, an employment lawyer at LVH Advocaten in Rotterdam.

How to create a good bonus scheme?

The bonus is a nice incentive for employees that you can use as an employer. But you have to be careful. The bonus scheme can be risky if it is not put down on paper correctly. As an employer, you then face the question: is the employee entitled to the bonus and how high is it? Obviously, you do not want to have that discussion with your employees.
In this article, we discuss how you, as an employer, can draw up a good bonus scheme. We also discuss a number of important pitfalls that often occur in bonus schemes.

Determine the performance of the bonus scheme

A bonus is a variable reward linked to certain performances. This can be the performance of the organisation, the performance of an individual employee or a combination of both. So don’t use a standard bonus scheme, but attune the bonus scheme to the organisation and the function of the employees. Describe as clearly as possible the performances that must be achieved, leave no room for other interpretations and ensure that afterwards it can be verified whether those performances have been achieved.

Bonus scheme and subjective criteria

When determining performance, beware of subjective criteria, such as linking a positive assessment to the award of a bonus. If you do opt for this, make sure that you have a fixed assessment moment every year. Not giving an assessment and then not awarding a bonus is contrary to good employment practice as set out in Section 7:611 of the Dutch Civil Code judgment of the District Court of Amsterdam 6 September 2016.

Discretionary power in bonus schemes

In many bonus schemes we also see a discretionary power (freedom to make a decision at one’s own discretion) on the basis of which the employer may decide not to award a bonus or to award a lower bonus to the employee. It is good to include this, but the employer must take into account that this discretionary power to mitigate the bonus cannot be used just like that. It is established case law that this power to determine the bonus is subject to good employment practice. It follows from case law, Amsterdam Court of Appeal 18 January 2022, that good employment practices require the employer to make clear how the discretionary power is exercised. If this is not clear, the employer may not mitigate. Therefore, explain under what circumstances moderation is possible.

Termination of employment and bonus scheme

Another important point of attention with regard to the bonus scheme is that the employer can stipulate that the employee must be employed in order to be entitled to the bonus. If an employee leaves employment halfway through the year, he is not entitled to a bonus. It is also possible to opt for a pro rata claim to the bonus if the employee leaves employment halfway through the year. It is sensible to agree this in writing, all the more so if the bonus depends on a turnover which is only determined at the end of the year.

Beware of acquired rights in bonus schemes

Has an employee received a bonus year after year and does the employer at any time decide not to award a bonus? The employee may argue that this is an acquired right. Namely, that the bonus was granted every year and therefore became part of the fixed salary. This risk arises particularly if there are no clear agreements on the granting of the bonus. The advice for employers is therefore to clearly indicate with every bonus payment that it concerns a variable reward and not an acquired right.

Bonus scheme for sick employees

During illness, an employee is entitled to at least 70% of his or her salary for 104 weeks. But what about the bonus? After all, this is a variable bonus which (sometimes) depends on the performance of the employee. An employee may also be entitled to the bonus during illness if it depends on performance, as long as it is plausible that the employee would have achieved the performance if he had not been ill. An agreement in the bonus scheme that the employee will not receive a bonus if he is sick, is not possible. The obligation to continue to pay wages during illness is compulsory law (it cannot be contractually deviated from).

Need a lawyer in Rotterdam for drawing up a bonus scheme?

In short, do not use a standard bonus scheme. Tailor the bonus scheme for your employees to the organisation and the position of the employee. Choose for clear achievements and give yourself, as an employer, a clearly defined discretionary power.
Do you need help with drawing up a bonus scheme or do you have a conflict about the granting of a bonus? Please contact Richard Ouwerling of LVH Advocaten. He is an employment lawyer and will be pleased to help you with all matters relating to employment law.

Recently, the Hague Court of Appeal ruled that Booking.com must join the industry pension fund for the travel industry.

The company opposed this because it sees itself as an Internet company. The financial consequences for Booking.com are huge: The parent company estimates that the ruling will lead to an additional cost of 405 million euros. None of that can be charged retroactively to (former) employees. Booking.com must join pension fund PGB with retroactive effect (up to and including January 1, 1999).

Scope investigation CLA and pension

Many such claims can be prevented by a scope investigation for generally binding pension fund or collective bargaining agreement.

It is very important to investigate in case of a takeover, a transition to a new pension scheme or in case of various business activities within the same (group of) company(ies) whether a compulsory collective bargaining agreement or pension fund applies or will apply to your company.

It regularly happens that companies are obliged to follow a collective bargaining agreement and an industry pension fund, without knowing it. Some companies adamantly deny this without having this investigated. This poses a substantial financial risk to you and can mean a financial noose. So when in doubt, do not cross over and have your company find out whether you fall under the scope of a collective bargaining agreement or industry pension fund that has been declared generally binding.

Information?

If you would like more information about the possibilities of a scope of application investigation, please contact our employment lawyers Richard Ouwerling or Lisa Kloot.

In June 2019, the European Parliament adopted a Directive on transparent and predictable working conditions. The Directive grants new rights to employees and this thus affects employees’ employment contracts, as well as any employment conditions regulations. This may lead to employers having to change their (model) employment contracts and employment conditions regulations in 2022.
In this article we discuss the changes contained in the bill and consider the changes employers must make to their (model) employment contracts.

Implementation of Directive 2019/1152

The directive must be implemented in Dutch law. The government published a bill on 12 November 2021. The intended entry into force of the law is 1 August 2022. Thus, we recommend to review the employment contract of your employees and applicable regulations before that time.

Legislative amendments from Directive on transparent and predictable employment conditions (2019/1152)

Training costs clause

Employers already had a training obligation, but it is expanded by the Directive. Employers can no longer agree on a study costs clause for training that is necessary for the performance of the job. The employer must offer this training free of charge and the time an employee spends on the training is working time.

The question is therefore, what constitutes training that is necessary for the job? In any case, this concerns a training which the employer is obliged to offer based on the law or collective bargaining agreement.

Side-activities clause

An ancillary activities clause in the employment contract is possible from August 2022 only if the employer can justify it on the basis of an objective reason. If there is no such justification, the clause is null and void. Note: The justification does not have to be given at the conclusion of the employment contract or be included in the employment contract. The justification may already be included in the employment contract, but may also be given at a later date. So does an employee request permission to perform ancillary work? Then the employer can still provide the justification at that time.

The rationale behind this change is that an employee is free outside of working hours to work for another employer or to work for himself. Thus, an employee may have multiple jobs unless the employer can justify a prohibition. A justification could be, for example, the threat of a violation of the Working Hours Act, the protection of confidential business information or the health of the employee.

Employer information obligation

The information obligation of employers is expanded. Employers must, in addition to the information in Section 7:655(1) of the Civil Code, also provide information about:

• Working hours;
• Work place(s);
• Wage components (bonus and allowances);
• Procedural aspects in the event of termination of the employment contract;
• Right to training;
• Leave arrangements(s).

The employer can include this information in the employment contract, terms of employment regulations and/or personnel handbook.

On-call agreement

Employees are only obliged to work unpredictable working hours if the employer has made these working hours known at the start of employment. The employer is therefore given a more extensive information obligation in this area. An on-call worker must therefore know at what times he is obliged to work. This can be included in the employment contract.

Request for predictable work

Furthermore, after 26 weeks a call employee can submit a request for predictable work. Employers do not have to agree to this and the work must be available. Employers must respond to the request within 1 month (or within 3 months for small employers) with a written motivation. If the response is lacking, the employee’s request must be acted upon.

Prohibitions on giving notice

There is a new prohibition on giving notice. An employee who invokes the above new rights cannot be dismissed for that reason.

Posted workers in the EU

If an employer wants to post an employee from the Netherlands within the European Union, certain information must be provided. The employer must inform the employee about the wages, allowances and reimbursement of expenses to which he is entitled. This can be included in the employment contract or terms of employment.

Need help updating your employment contracts?

It is always wise to have your model employment contract checked regularly by an employment lawyer. Labour law is constantly changing and this year too there are changes, namely the implementation of the EU Directive on transparent and predictable terms of employment. Richard Ouwerling of LVH Advocaten in Rotterdam will be happy to help you evaluate and adjust your employment contracts. He can also tell you more about the upcoming changes in employment law.

Everything you need to know about a unilateral modification clause

There may be reasons for you as an employer to unilaterally amend certain terms and conditions of employment if you are unable to reach an agreement with the employee(s). For example, to adjust the travel allowance because employees are working from home more often since the corona crisis. Then a ‘unilateral change clause’ from the employment contract can offer a solution

In principle, employers cannot simply change terms of employment unilaterally. After all, there is an agreement and both parties must respect the arrangements therein.
However, under circumstances, the employer must also be able to unilaterally amend the contractual agreements with an individual employee, in order to meet the interests of the collective of employees (e.g. the survival of the organisation). A unilateral modification clause can help the employer do this.

What is the unilateral modification clause

The unilateral modification clause allows the employer to make changes to the employment contract (in the future) without the further consent of the employee. Because the employer can easily include a unilateral modification clause in the employment contract and obtain the required consent of the employee upon commencement of employment to do so, the legislator set strict conditions for the use of this clause.

The employer can invoke a unilateral amendment clause if he has such a strong interest in the amendment that the employee’s interest, which will be harmed by the amendment, must give way to it according to reasonableness and fairness.

When may the employer unilaterally modify the employment contract?

Whether these conditions can be met depends very much on the factual circumstances of the case. As a starting point, if the works council (OR) agrees to a collective change in the employment conditions package, the employer’s overriding interest is deemed to be present. Does your organisation not have a works council? Then the assessment must be made whether the interests of the employee must reasonably give way to the interests of the employer.

Possibilities without unilateral change clause

If the employment contract does not provide for a unilateral amendment clause, it is only possible to unilaterally amend employment contracts by invoking the general standards of good employee conduct (Article 7:611 of the Civil Code).

Double test of reasonableness

However, the Supreme Court ruled in the so-called ‘Mammoet judgment’ that, when testing against Section 7:611 of the Civil Code, not only what can reasonably be expected of the employee in such a situation should be considered. The question of whether, given the situation, a good employer could have found reason to make a proposal to change the terms of employment should be considered first. It must then be assessed whether the proposal is reasonable, taking into account all the circumstances of the case.

This ‘double reasonableness test’ must be applied for each individual employee, which is particularly cumbersome if an employer wants to implement a collective change in the terms of employment. A unilateral change clause can then offer a solution, especially if the weighty interest of the employer appears to be present, because the works council has agreed to the collective change of the employment conditions package.

Therefore, check whether your employment contracts provide for a unilateral changes clause. Such a clause allows you to more easily realise unilateral collective changes to the employment conditions package, for instance in case of a change in the law or if business economic circumstances give reason to do so.

More information or advice on unilateral change clause ?
Want to know whether you can unilaterally change employment conditions, with or without a unilateral change clause? Contact Richard Ouwerling, lawyer at LVH Advocaten in Rotterdam for more information.

Surveillance in the (home) workplace: what is an employer allowed?

Previously we wrote an article about the rules for camera surveillance in the workplace. The need for employer monitoring exceeds – partly in view of the corona pandemic – the mere checking of the workplace with cameras. Employers also have a need to monitor employees’ browsing habits, as well as the emails they send. And, of course, they want to prevent employees from spending hours Internet shopping and watching TV at the home workplace during working hours. But isn’t monitoring this a violation of the employee’s privacy, especially at the home workplace?
In this article, we address that question. Is an employer allowed to use monitoring tools and what rules must the employer abide by during a monitoring. To form a clear picture, we will also discuss case law.

When may an employer conduct structural workplace monitoring?

The employer must comply with privacy legislation, including the General Data Protection Regulation (AVG). Does the employer want to monitor the (home) workplace? If so, this must be announced in company regulations or the personnel handbook. In addition, the Works Council (if any) must grant permission for this monitoring. Finally, a legitimate interest is always required. And that legitimate interest is not always present, as case law shows.

Is an employer allowed to check an employee’s e-mails?

The District Court of Amsterdam awarded an employee compensation of € 10,000.00 after the employer had violated the privacy of the employee. The court ruled that the employer searched the employee’s mailbox without concrete suspicion, prior notice or consent. This was allegedly done to gather information about ongoing projects. However, the years 2016, 2017 and 2018 were also searched. According to the court, this violated Article 8 ECHR, especially since nothing shocking came to light. Also, the employer should have hired an external agency for the investigation, according to the court.

Is camera surveillance in the workplace permitted?

In determining the amount of the fair compensation, the North Netherlands District Court took into account the events surrounding the placement of cameras on the work floor. The employer had placed hidden cameras without notice to the employees and without the consent of the Works Council without having a legitimate interest in doing so. The hidden camera surveillance should also have been reported to the Personal Data Authority. Partly because of this, the court ruled that the employer was seriously culpable. Learn more about camera surveillance, read: rules for camera surveillance in the workplace.

Is an employer allowed to monitor the home workplace?

When deploying surveillance equipment, it does not matter whether the employee works in the office or at home. Working from home is not a reason for the employer to monitor more strictly. An employee is not obliged to agree to a home visit. An employer cannot impose sanctions for refusal. The same applies if the employer asks for a photo or video of the home office. Checking e-mails, telephone traffic, surfing behavior and behavior on social media is in principle not possible since this is private. However, when the employer complies with the requirements, control is possible.

Looking for an employment lawyer in Rotterdam?

In short, as an employer you cannot simply monitor your employees. The privacy of your employees must always be taken into account. Therefore, always contact an employment law specialist. They can check whether you meet the requirements.

Would you like to know more about the means of control you can use as an employer and how you can do this correctly? Please contact Richard Ouwerling of LVH Advocaten in Rotterdam. She will be happy to help you implement these means of control, including drafting an internet and e-mail policy and/or a personnel handbook.

Part-time layoffs and secondment as solution to energy crisis

Bankruptcies are slowly increasing again as a result of the energy crisis, high inflation and the cessation (and repayment) of government support measures. Retail, agrifood and business services are particularly hard hit. Entrepreneurs in these sectors should anticipate even worse business times. In that context, when part of the turnover is lost, two alternatives to a (final) reorganization can be considered, namely part-time dismissal and secondment.

Part-time layoff as a solution

The first option is to reduce the hours of your employees. This way you can reduce your personnel costs. Part-time dismissal can be done through the UWV or through a settlement agreement. You pay a partial transfer fee in exchange for a reduction in hours. For the reduction in hours, your employee will be entitled to unemployment benefits. If necessary, you can agree on a return guarantee to the old scope of work. For older employees in greenhouse horticulture, the seniority scheme is also an alternative. This arrangement allows an older employee to work 20% less while retaining 90% of the salary.

Secondment as a solution

Another solution is collegial secondment. This has been done a lot in recent years in the industry and certainly offers a solution for the coming winter. Record these arrangements well in a secondment agreement. A risk to secondment is that you as a hirer (in addition to the lender) are jointly and severally liable for payment of wages, income tax and sales tax for the hired employees. In addition, chain liability may follow for you if the lender as formal employer fails to pay wages. Other risks include transfer of undertaking, applicability of a different collective bargaining agreement and conditions of employment, incapacity for work or an industrial accident of the posted employee. Finally, all employers who provide workers for a fee have a duty to register with the Chamber of Commerce. If you fail to comply with this obligation, the Inspectorate SZW can impose a fine on you. This fine is as much as €8,000 for the first 10 loaned workers.

More information or advice about part-time dismissal or secondment?

Do you have questions about part-time dismissal or secondment? Please contact Richard Ouwerling, attorney at law at LVH Advocaten in Rotterdam for more information.

Compulsory education and study-cost clause: all points of attention for employers

As an employer, you like to keep your employees’ knowledge up to date. This is important for the sustainable employability of your personnel and it can create more productivity within the organisation. Thus, a win-win situation.

But staff training requires investment. If the employer invests in an employee, the wish is of course that the employee will remain in service for a long time. But what if that employee leaves anyway? Who pays for the training if the employee leaves the company during or after the training?

Labour law has the necessary rules to deal with this. In this article we discuss all the points of interest for employers regarding the training of employees, namely the legal training obligation, training costs and the study costs clause.

Training obligation of employees

The law (Article 7:611a BW) stipulates that the employer must enable its employees to follow (1) the training necessary for the performance of their duties and (2) the training necessary for the continuation of the employment contract when the employee’s position is no longer held, if this can reasonably be expected of the employer (training in connection with redeployment). This implies an obligation for the employer to invest in employees by means of training. An employee is expected to make efforts as a good employee to accept the training and to complete it successfully.

Attention: see also heading “Change to training obligation and study costs clause as per 1 August 2022”.

Training necessary for the performance of a function

We will now zoom in on the first part, the necessary training for the execution of the position. It concerns necessary training. This includes training that is compulsory by law or by an external party (collective labour agreement or governing body). In addition to offering the training, the employer must also enable the employee to follow the training. The employer must make regular working hours available for the training activities.

Does the organisation have a CAO? Check it for the specific rights and obligations with regard to training.

Training in case of malfunctioning

The aforementioned training obligation is also important in a situation where the employee does not function. If there is dysfunction and this can be resolved through coaching or courses, it is up to the employer to offer support in the form of training. Are you, as an employer, not making enough effort? This can lead to serious culpability and the associated fair compensation.

Training costs to be borne by employer or employee?

In principle, the employer has to finance the necessary training mentioned above and training in the context of redeployment. Is the training not necessary? Then the employer does not have to finance it. If the employer does pay for the training, this can, under certain conditions, be deducted from the transitional allowance.

Study Costs Clause

As mentioned, a training course is an investment. An investment that the employer would like to recoup. This is not possible if the employee leaves shortly after completing the training. To prevent this becoming an empty investment, a study costs clause can be agreed. The education costs clause provides that an employee, if he or she resigns (or if the employer’s resignation is at the employee’s risk), must repay the training costs to the employee. Please note: in principle, an employer cannot invoke the training costs clause if the initiative for dismissal or non-renewal of the employment contract lies with the employer, unless other agreements have been made. For example, it may be agreed that the employee must repay the study costs if he is summarily dismissed or in the event of serious culpability on the part of the employee.

This study costs clause is not (yet) regulated by law, but case law has laid down a number of requirements:

1. The financial consequences (concrete amounts) of the clause and when it comes into effect must be properly explained, preferably in writing;
2. The period during which the employer will benefit from the study (and the resulting knowledge and skills) must be established;
3. The repayment obligation must decrease proportionally on the basis of the established period mentioned under 2 (sliding scale).

Even if the foregoing has been arranged well, it may be that the employer cannot invoke the study costs clause. This is the case if after the study costs have been deducted, the employee’s salary falls below the statutory minimum wage. Furthermore, invoking the study costs clause may be unacceptable according to the standards of reasonableness and fairness.

Change to training obligation study costs clause as of 1 August 2022

On 1 August 2022, new rules will be introduced in Dutch law regarding the training obligation and the study-costs clause. Based on the European Employment Conditions Directive (click here for more information about this directive), the employer is obliged to offer a study free of charge if (1) the study is compulsory on the grounds of the law, the CAO or regulation of a competent administrative body and (2) the study is necessary for the performance of the duties. If a study costs clause is nevertheless agreed for this compulsory or necessary training, the clause will be null and void. These are clauses whereby the costs of training are recovered or set off against monetary income arising from the employee’s employment.

Please note: training or education that employees are obliged to take in order to obtain, maintain or renew a professional qualification, does, in principle, not fall under mandatory training as referred to under 1. Therefore, a study-costs clause would be agreed upon with regard to such training. The question is how this will work out exactly in the Netherlands if a course of study is not compulsory, but necessary for the performance of the duties.

Do you need a lawyer in Rotterdam to advise you on the obligation to study and the study costs clause?

The above shows that agreeing and invoking a study costs clause is not self-evident. So think carefully about the exact wording of the education costs clause and consult an employment lawyer. If you want to invoke the clause, first get advice on your chances. If you would like to know more, please contact Richard Ouwerling of  LVH Advocaten.

How do I substantiate the need for reorganisation?

Support measures have stopped and energy crisis and high inflation are putting many entrepreneurs in financial trouble (again). Starting to reorganise on time can then be a ‘must’. But how do you substantiate the need for reorganisation?

Do you need to reorganise due to business economic circumstances? If so, one of the options is to terminate the employment relationship with some of your employees by applying for individual dismissal permits from the UWV.

Substantiation for dismissal in the event of reorganisation

A request for dismissal for economic reasons must be substantiated with annual accounts and a profit and loss account for the past three years. You should also explain the number of jobs to be cut in relation to the minimum amount to be cut. In addition, you must provide insight into your company’s organisation and staff composition, indicating the different positions, their possible interchangeability, age and years of service.

Assessing dismissal in the event of reorganisation

Dismissal for economic reasons usually involves a poor financial situation or reorganisation. The business decision to reorganise is not always easy to assess. Therefore, there is a certain degree of policy freedom for an entrepreneur. In any case, the UWV may not sit in the employer’s chair and can therefore only marginally assess the reorganisation decision.

This policy freedom comes into play with an entrepreneur’s motive for dismissal, the size of the proposed staff reduction and the selection of the categories of jobs in which redundancies will take place. The UWV respects in principle that an entrepreneur must be able to take the appropriate decisions, which are necessary for healthy and efficient business operations, also in the longer term. Not only the corporate interest, but also the labour market interest and the employment interest may come into play here.

Which employee will be dismissed?

You cannot choose the employees for whom you apply for a dismissal permit. The UWV’s policy rules state that when determining which employees are to be nominated for dismissal, the employees must be classified by business location into so-called ‘interchangeable job categories and age groups’ based on the principle of mirroring. The age groups are classified as:

• 15-25 years;
• 26-35 years;
• 36-45 years;
• 46-55 years;
• older than 55 years.

Within each age group, the employee with the shortest tenure is put forward for dismissal first.

Reassignment in the event of reorganisation

Finally, in the UWV procedure, you as an employer must make it plausible that there are no possibilities for redeployment of the employees proposed for dismissal. This involves redeployment both within and outside the employer’s company. This assessment will also address whether other measures have been taken to maintain employment.

Notice period for dismissal due to reorganisation

The UWV dismissal procedure generally takes six to eight weeks. Does the UWV grant a dismissal permit for the employees? Then you still need to take into account the notice period of the employees concerned when terminating their employment. If a dismissal permit is granted by the UWV, the employer may reduce the notice period by one month, as long as at least one month remains.

More information or advice on reorganisations?

A letter of dismissal must be adequately substantiated and you must nominate the right employees for dismissal. The employment law specialists at LVH Advocaten can take this off your hands and, of course, advise you accordingly. Contact Richard Ouwerling, employment law lawyer at LVH Advocaten in Rotterdam for more information.

Like many other industries, the transportation industry is understaffed to keep up with growth. Job openings remain high and retirement attrition continues to increase. In this article, I discuss possible solutions.

Peer hiring

Peer hiring can be a solution when staff shortages occur. Collegial hiring is a variant of hiring personnel, where one entrepreneur makes his or her own personnel available to a fellow entrepreneur “on a non-profit basis”.  Peer hiring does not involve the hiring out of personnel by the lender on a professional or business basis. Peer hiring is a temporary affair.

Peer-to-peer hiring involves the risk of hirer liability. This concerns liability for the payment of contributions and taxes on the hired employee’s wages. Agreements on this and, for example, employer liability should be made in a hiring agreement.

Employing self-employed truck drivers

In the transport sector, it is becoming increasingly common for carriers to hire self-employed drivers so that no employment contract needs to be concluded. However, when regularly or repeatedly using a self-employed driver, a transporter runs the risk that the tax authorities and/or a judge will subsequently determine that it is an employment contract rather than a contract for services.

According to the Road Goods Transport Act (Wwg), however, a transport company is prohibited from carrying out transport operations with drivers who are not employed by the company. This is the so-called requirement of employment.

To make it clear that an employment relationship exists, the transportation company and the driver must jointly prepare a statement that:

• the transport is carried out at the transport company’s expense and risk
• a pay and authority relationship exists between the transportation company and the driver;
• the driver is employed by the transport company, which has a Euro permit for professional transport.

Own transportation

Under the Road Goods Transport Act, it is permissible to hire a self-employed person as a driver in own transportation. In own transportation, the requirement of employment does not apply. Own transportation is the transportation of goods owned by the company or which the company trades, rents, leases, handles, processes or repairs.

ZZP-er

ZZP-ers must have their own Euro permit and their own truck. In practice, this last requirement in particular often causes problems because it requires a very large investment. Therefore, the form of leasing or renting is often chosen. A model agreement for professional freight transport has existed for some time: vbvo_beroepsgoederenvervoerder_branchemodel_dv10211z4ed.pdf (belastingdienst.nl)

This agreement contains all kinds of provisions that the parties must meet in order to demonstrate the self-employed driver’s independence (including a license, own car, own fuel, right to outsource transport again, etc.) This is where the shoe pinches. It is known that in the transport sector many self-employed drivers do not (cannot/will not) meet these requirements. If, in practice, the conditions of the model agreement are not met, there is a risk of retrospective taxation by the Tax Authorities regarding missed payroll taxes, although the DBA Act is currently not enforced by the Tax Authorities unless there is ‘malicious intent’ on the part of the client.

TLN wants an exception for professional freight transport in the cabinet’s new rules for self-employed workers. Licensed freight transport is already subject to quite a few rules.

Payrolling

In payrolling, a company’s staff is “employed” by the payroll organization. Legal employership and payroll administration are entirely the responsibility of the payroll organization. However, payroll companies are obliged to apply a number of elements from the industry’s collective bargaining agreement to payroll contracts: the so-called hirer’s remuneration. The problem is that the hirer does have to take care of recruitment and selection of the relevant employees itself, which remains difficult with an already growing staff shortage.

Moreover, payrolling is not entirely without risks. For example, the client is partly responsible for payroll taxes for the payrolled employees, among other things. If the payroll company does not pay these to the tax authorities, the tax authorities can come and collect them from the entrepreneur. Moreover, the payroll restriction is sometimes seen through, if the construction is set up solely to take away the labor law protection of the employees. Also, situations where it is unclear to the employee with whom he has an employment contract are not allowed: the employee must clearly and unambiguously agree to this construction.

Broadcast

The difference between payrolling and staffing is mainly in the recruitment of the workers. In payrolling, the transportation company recruits the workers itself; in temporary staffing, they are recruited for the employment agency.

Under the ABU collective agreement, the temporary employment agency is obliged to apply the hirer’s remuneration from day one. As a result, temporary workers in professional freight transport are entitled to the hirer’s remuneration in accordance with the Professional Goods Transport collective agreement from the first working day.

Incidentally, only temporary employment agencies, which are designated by the Minister of Infrastructure and the Environment, are allowed to dispatch drivers. A driver then needs a declaration of posting. He must be able to show this on the road during inspections. Finally, the temporary employment agency must have a designation from the Kiwa Register. In itself, temporary employment is a safe construction if a certified and specialized agency is used, but it often turns out to be quite expensive, with margins that are simply too small.

Conclusion

Thus, each form of engagement has its advantages and disadvantages. If you have any questions or would like legal advice, please contact Richard Ouwerling, telephone number 0031 10 209 27 77.

Qualifying employment contract: employee or not after all?

With the Deliveroo judgment of March 2023, the Supreme Court has once again given the practice more clarity on the qualification of the employment contract. Since that ruling, of course, various case law has again been rendered on whether there is an employment contract or yet another type of contract.

This article explains when there is an employment contract and, on the basis of two examples, further clarifies the qualification of employment relationships in order to get a better idea of when you are dealing with an employee or still with a ZZP or intern.

When is there an employment contract?

First of all, just the basics. We speak of an employment contract only when the following cumulative requirements of Article 7:610 of the Civil Code (BW) are met:

• labor;
• pay;
• authority (employed);
• for a certain amount of time.

These elements are left to be fleshed out by case law.

Viewpoints assessment employment relationship

In the Deliveroo ruling, the Supreme Court provided points of view that answer the question of whether an agreement should be classified as an employment contract. The points of view are as follows:

• The nature and duration of the work;
• The manner in which work and working hours are determined;
• the embedding of the work and the person performing the work in the organization and business operations of the person for whom the work is performed;
• The existence or absence of an obligation to perform the work personally;
• How the contractual arrangement of the parties’ relationship was established;
• The manner in which remuneration is determined and paid;
• the amount of these rewards;
• whether the person doing the work is at commercial risk in doing so;
• Also of importance may be whether the person performing the work behaves or can behave as an entrepreneur in economic life, for example, in acquiring a reputation, in acquisition, in terms of tax treatment, and considering the number of clients for whom he works or has worked and the length of time for which he usually behaves.

It also follows from the ruling that only provisions that actually have meaning for the parties are relevant in the assessment.

Then to the examples.

Security guard is self-employed and has no employment contract

The East Brabant District Court ruled that a security guard did not have an employment contract, but performed his work as a ZZP’er. Various elements in the employment relationship pointed to an assignment contract. The security guard had a lot of freedom. He had no obligation to work a minimum number of hours, he himself determined which days and times he worked, and he had no maximum number of vacations.

Furthermore, the court found it significant that although security work was the core business of the work provider, the security guard was not embedded in the organization. In addition, his fee was substantially higher than the salary of the employee with similar work and the security guard was at commercial risk because he had no claim to a fixed number of hours.

Finally, the court concluded that the security guard could conduct himself as an entrepreneur in the course of business by being allowed to work for other clients.

Internship agreement qualifies as employment contract

The Central Netherlands District Court ruled that, an employee whose last employment contract was not renewed was already in permanent employment. The first “internship agreement” qualified as an employment contract. In fact, after that first agreement, the employee had received three more temporary employment contracts and the last extension automatically resulted in an indefinite contract.

The agreement was qualified as an employment contract because the employee’s work during the internship agreement was not substantially relevant to the employee’s training. From the outset, the employee performed much of the work that was part of the position of entry-level production manager. Study was not a primary concern. There was no plan and the employer had no knowledge of the training requirements. Thus there was employment within the meaning of Section 7:610 of the Civil Code. Thus, the employer still had to pay the minimum wage over the internship agreement, because only an internship allowance had been paid.

Clarifying assessment of employment relationships and legal presumption

The legislature is also not sitting still in this area and aims to give more interpretation to the concept of “employed” (relationship of authority) in Article 7:610 of the Civil Code. The legislator proposes the following interpretation of the term:

• he who performs the work under work-related direction from the employer; or
• he or labor that is organizationally embedded in the employer’s organization; and
• he who does not perform the labor for his own account and risk.

The bill also introduces a new legal presumption. Anyone who performs work for remuneration not exceeding €32.24 per hour will be presumed to be working on the basis of an employment contract under a new Section 7:610aa of the Civil Code to be introduced.

Seek advice qualifying employment relationship?

In doubt about the qualification of an agreement? Contact Richard Ouwerling of LVH Advocaten in Rotterdam. Richard Ouwerling is an Employment Lawyer and advises entrepreneurs on labor relations and employment contracts.

External entrepreneurship is fully taken into account when assessing pseudo self-employment

The Supreme Court has made an important ruling on the employment relationship between Uber and its drivers. This ruling has far-reaching consequences for self-employed people without employees and the question of whether they are truly self-employed or pseudo self-employed.

In the Deliveroo ruling, the Supreme Court mentioned 10 circumstances that are important in assessing whether an employment relationship is an employment contract or not. One of these criteria concerns the entrepreneurship of the worker. The question was whether this entrepreneurship also applies to the relationship outside of that with the client. In other words: do you also behave as an entrepreneur in ‘economic traffic’? The Supreme Court has now ruled that external entrepreneurship must also be considered as a circumstance in the assessment of false self-employment. So: external entrepreneurship is therefore a fully-fledged criterion.

How does this appear in practice?

• The worker has several clients per year;
• The worker spends time and/or money on acquiring a reputation and finding new customers or clients.
• The worker has business investments of some significance.
• The worker behaves administratively as an independent entrepreneur, is registered with the Chamber of Commerce, is a VAT entrepreneur and/or is entitled to the tax benefits of entrepreneurship (such as entrepreneurial facilities).

In a bill (‘VBAR’), external entrepreneurship (C+) only played a role if it could not be determined on the basis of the other assessment criteria whether there was an employment contract or a contract for services. Now the Supreme Court deviates from this.

In addition, the ruling means that when the activities of the self-employed person are embedded (the same as those of employees), this does not necessarily mean that there is likely to be disguised employment. After all, if the self-employed person can demonstrate his external entrepreneurship, he is also there.

Fortunately, this means that it is easier for the self-employed person to prove that he is truly self-employed. Client happy, contractor happy because he does not want to be an employee.

Information?

Would you like to know more or do you have questions about this subject? Then please contact Richard Ouwerling, Employment Lawyer at LVH Advocaten.