Dutch employment law will change (again)
In 2015 Dutch employment law changed significantly. The goal of our legislator was to provide incentives for employers to conclude more permanent contracts and to simplify dismissal procedures. Practice has shown the contrary. More people are working as a (self-employed) contractor or as a temporary worker than ever before. Therefore our legislator has proposed a revision of our employment law for 2019. This should reduce the disproportionate difference in rights and benefits between employees and other, “flexible", workers.
And therefore yet again changes in employment law are expected, albeit slightly less drastic than the 2015 changes. The expected changes are the following:
- A payrolling contract (employee is employed by company A and seconded to company B) will be a temporary contract, meaning that all legal provisions of the temporary contract apply. This means among other things that the payroll-employee is entitled to the same salary as his colleagues who are employed by the hiring company.
- The maximum probationary will be extended significantly (from two) to five months for indefinite-term contracts, and three months for fixed term contracts longer than two years. The possibility to have a non-competition clause in combination with this extended probationary period will be limited.
- The rules regarding zero-hour contracts will become more strict: an employee needs to be notified a minimum of four days in advance of working, he will be entitled to pay if the call is cancelled within those four days, and the duration of the flexible aspect of this contract will be limited to a year.
- Unemployment insurance contributions will be reduced for employers who offer their employees permanent contracts.
- The period within which permanent contracts may succeed one another is restored to three years (currently: two), and the intermission period that starts a new series is brought back to three months (currently: six), if this is agreed in a collective bargaining agreement. This basically restores the rules as they were before 2015.
- The grounds for termination will be extended in the sense that a combination of grounds will also be possible. Currently one of the specific grounds needs to be completed and sufficient for termination; in the future it will also be possible to terminate on account of a combination of circumstances that would under current law not each separately warrant termination.
- Employers will be reimbursed when paying severance to employees on long term sickleave. Furthermore severance will be due for all employees whose contracts are terminated, whereas currently only employees who have been in service for more than two years qualify.
Unfortunately, the government's most important advisory council regarding draft legislation (Raad van State) thinks this legislation will be inadequate. The proposed changes have insufficient connection between each other. As a result one solution will only aggravate another problem.
I personelly do not think this legislation is inadequate, because it will probably stimulate (some) employers to offer their employees permanent contracts. However, there is a bigger underlying problem that will not be tackled with this legislation: our legal definition of employment does not fit anymore in the everyday reality of our labour market. An example of this reality is platform labour. Platform labour, through Uber and Temper for example, provides workforce-as-a-service by means of simple on demand online platforms. Our current labour legislation is not capable of defining the employer for these types of work relations. This has become a grey area, which results in a deterioration of the (social) security for low-income workers.
I do believe however that this shortcoming in Dutch employment law will also be fixed, although this will result in yet another, much bigger, legislative change in the near future.
Our office will keep its clients informed throughout all the upcoming changes. We know how to anticipate and will be happy to assist your HR department.