News Update Employment & Pensions

Plans for labour market reforms

On 3 April 2023, Minister Van Gennip of the Dutch Ministry of Social affairs and Employment presented a package of measures (in Dutch only) that aims to create greater security for employees and more flexibility for businesses.

Below is a summary of the main measures.

Greater security for employees:

• On-call agreements will be replaced by basic agreements for the minimum number of hours that employees are scheduled to work on a standard basis. Employees may refuse any on-call assignments outside of these pre-determined and set hours of availability. Employers may include a provision in the employment agreement requiring 30% more availability on top of the guaranteed minimum hours.
  
  If employees structurally work more hours, then after 12 months they must be given an offer to change the number of hours of work. Pupils and students with a part-time job may still continue to work on the basis of today's on-call agreements.
  
  
• The possibility to conclude up to three temporary employment agreements with the same employer within three years will remain. However, to avoid the situation that employees are given one temporary agreement after the other for prolonged periods, the six-month interval to be observed in that regard will be cancelled. Instead, a five-year interruption period will be introduced. In other words, only when the period between two employment agreements with the same employer is five years or more will the chain of temporary agreements that an employee may conclude with that employer start anew. It will no longer be possible to agree deviations by collective labour agreement. Pupils and students are exempt from this rule.
  
  
• Mandatory incapacity for work insurance for self-employed persons will be introduced. Director and major shareholders and persons receiving income from other work will be exempt from the insurance obligation.
  
  
• Current legislation provides that agency workers' terms of employment on wages and other payments and any arrangements made regarding working hours and rest breaks must be at least equal to those applicable to employees of the company that hires in those agency workers. Equality of all other terms of employment is now proposed. In addition, temporary employment agencies will be required to offer their agency workers a permanent contract sooner.

More flexibility for entrepreneurs:

• After an employee's first year of sickness, employers with up to 100 employees may decide, together with the employee, to end the first track of the rehabilitation process and focus on reassignment with a different employer. This reassignment is referred to as the second track.
  
  If the employer and the employee are unable to agree on ending the first track, but the employer nevertheless wants to do so, approval must be requested from the Dutch employee insurance agency (UWV).
  
  UWV assesses the following three aspects to determine whether the first track may be terminated:
  
  - Have sufficient rehabilitation efforts been made in the first year?
  - Is the employee still sick?
  - Can the employee be expected to resume their duties (with or without some adjustments) with their own employer within 13 weeks? An adjustment of duties may include changes to the number of hours, work schedule, type of duties and workload. The extent to which the employer may be reasonably expected to structurally adjust the employee's job is another aspect taken into consideration.
  
  If UWV gives a positive opinion on these three points, the employer will be given approval to focus rehabilitation efforts exclusively on the second track in the second year of sickness. This means that the employer will not be required to keep a position available for the sick employee, who can then be replaced permanently. An employee who nevertheless recovers in the second year of sickness can only return to work if their position has not yet been permanently filled by somebody else.
  
  Employers will remain responsible for the continued payment of wages and any rehabilitation with a different employer in the second year of sickness. Employers can take out insurance for this.


• Emergency Regulations for Employee Retention (Crisisregeling Personeelsbehoud, formerly 'Part-Time Unemployment Benefits' (Deeltijd-WW)) will be introduced, focusing on temporarily cushioning any crises and emergencies going beyond the usual entrepreneurial risk. Employers may invoke these regulations if their company-wide business declines by 20% or more.
  
  In the event of an emergency, employees may then be temporarily assigned to a different position or location, or their working hours may be temporarily reduced by at least 20%. Employees will receive 80% wages on the hours not worked, provided that their total wages are not reduced by more than 10%. For the hours deducted, the employer may apply for compensation of 60% for the wage costs of the hours not worked. In contrast to Part-Time Unemployment Benefits, this compensation is not linked to any individual unemployment benefit entitlements.
  
  Employers may make use of these regulations for no more than six months; this period cannot be extended.
  
  

The details of the above measures still need to be laid down in legislative proposals. The Minister intends to submit the draft bills for online consultation around the summer. After that, the bills are scheduled to be presented to the Dutch House of Representatives in the spring of 2024.

Checklist for the whistleblower internal reporting procedure

On 18 February 2023, part of the Whistleblowers Protection Act (Wet bescherming klokkenluiders) entered into force.

The Act introduces new requirements for internal reporting procedures. For example, whistleblowers must receive confirmation of receipt of their report within seven days and, within three months of this confirmation being sent, must be informed of the subsequent steps available and/or to be taken. Further, standards for registering reports of malpractices have been drawn up and the rules about observing confidentiality regarding the whistleblower's identity have been tightened.

Private sector companies with 250 or more employees are already required to have an internal reporting procedure in place that meets the requirements of the Whistleblowers Protection Act. Under transitional legislation, employers in the private sector with 50 to 249 employees only need to comply with the new requirements of the Whistleblowers Protection Act from 17 December 2023.

If there is no internal reporting procedure, or if the internal reporting procedure does not fully meet the statutory requirements, any affected employee may petition the Subdistrict Court to set a deadline for the employer to adopt an internal reporting procedure that meets the statutory requirements.

A checklist for internal reporting procedures has been published at www.wetbeschermingklokkenluiders.nl (in Dutch only). This checklist sets out what must be included in the reporting procedure and what other requirements employers should take into account.

The study costs clause in practice

With the entry into force of the Act on Transparent and Predictable Working Conditions (Wet transparante en voorspelbare arbeidsvoorwaarden) on 1 August 2022, the option of recovering study costs from an employee has been limited.

The new Article 7:611a(2) of the Dutch Civil Code provides that employers may not recover any costs from employees for training that the employer is obliged to provide to employees by law or under any applicable collective labour agreement. This would include, for example, training that employees have to follow to be able to work with a new computer system introduced by their employer. Another example would be training an employee has to follow as part of an improvement programme, for instance if their English language skills prove inadequate and the employer finds such skills essential for the job. In that case, the training is covered by Article 7:611a of the Dutch Civil Code and must therefore be provided free of charge.

A study costs clause for mandatory training, under which all or some of the study costs are to be paid by the employee, is null and void.

Given the generally high costs of employee training, it is important for employers to fully understand whether or not they are allowed to include a study costs clause. Whether certain training courses are to be considered mandatory training under Article 7:611a(2) of the Dutch Civil Code is a matter of much debate in practice. Various legal proceedings have already been conducted on the subject, as discussed below.

The annex (in Dutch only) to the professional qualifications regulation (beroepskwalificatierichtlijn) lists some specific exemptions from Article 7:611a(2) of the Dutch Civil Code. For such training, employers may therefore still include a study costs clause. The Overijssel District Court (in Dutch) ruled that the company doctor training programme concerns such a regulated profession. The annex to the professional qualifications regulation includes 'Employment and health, occupational medicine' training. The study costs clause was upheld as the case was about obtaining professional qualifications.

The Almere Subdistrict Court (in Dutch) examined a case in which an employer and an employee had concluded a study costs agreement with a repayment arrangement. The recitals stated that the employee intended to follow registered accountant training as part of their further professional development and had asked the employer to finance this training. When the employment agreement ended, the employer sought repayment of the study costs. According to the employee, the study agreement was null and void as the training for which the study agreement had been concluded was necessary training within the meaning of Article 7:611a(2) of the Dutch Civil Code.

The Subdistrict Court agreed with the employer that nothing indicated that the employee had been hired so that he could work as a registered accountant for the employer or that the training for which the study agreement had been concluded was necessary for the employee's proposed job or current job. Another aspect deemed relevant by the Subdistrict Court was that the employee had followed the training at his own request and had asked the employer to finance it. The employer had made no commitments regarding the period within which the employee would become a registered accountant with signatory power and the employee knew that there was no need for this in view of the organisation's limited size. Having considered all this, the Subdistrict Court ruled that the training was not necessary training and upheld the study costs agreement.

These court rulings provide a little more clarity about what is regarded as compulsory training for which no study costs may be recoverd. Hopefully future case law will give us more guidance.

Houthoff Employment event: 'A year of change' | 25 May 2023

All sorts of circumstances may make it necessary to amend the terms of employment of an employee or group of employees. How do you deal with this as an employer? To what extent are employees required to cooperate? What is the works council’s role when there are changes? And how will the Future of Pensions Act (Wet toekomst pensioenen) affect all this?

On 25 May 2023, we are holding the Houthoff Employment Event with the theme: 'A year of change'. Read more