HR UPDATE 2015
The new labour law New employment law and regulations
Version 5: July 2015
Overview of the document Adecco Group Nederland has set itself the goal to inform you, as a knowledge partner, meticulously about relevant developments in the world of work. To that end we have issued periodical HR Updates since 2014. These White Papers provide a detailed clarification of current and relevant legislation and regulations which may affect decisions relating to the organisation of employment. For example, this fifth publication of the ‘HR Update 2015’ contains a more detailed examination of changes to the flex legislation, the law governing dismissals, changes to the Association of Private Employment Agencies Collective Labour Agreement for Temporary Agency Workers [ABU CAO voor Uitzendkrachten] as regards the remuneration scheme and the new Sickness Benefit Act [Ziektewet]. All these developments can have a varying impact on companies as regards the organisation, deployment and utilisation of ‘work’. All the changes described are now definitive. The Employment and Social Security Bill was passed by the Dutch House of Representatives (after a few final amendments) on 18 February 2014. This was an important step towards making the planned legal changes definitive. After that the Dutch Senate gave an opinion and the planned legal changes were converted into definitive new legislation and regulations. The changes to the ABU CAO for Temporary Agency Workers are the result of a CAO agreement that was reached on 30 September 2014. This therefore also involved definitive amended or new arrangements in the ABU CAO for Temporary Agency Workers. No rights can be derived from the information provided. The information does provide an insight into the new contours which apply for and to the organisation and deployment of staff (including your own employees as well as employees hired in from outside). In view of the ambitions of the current coalition government with regard to employment market reforms and the accompanying specific focus on temporary work, we will continue to update you in the coming period based on our expertise with HR Updates.
Table of Contents •
Foreword Patrick Bakker, CEO Adecco Group Nederland
1. Flex legislation 1.1 The chain arrangement 1.2 The fall-back arrangement 1.3 Agency clause 1.4 Obligation to give notice 1.5 Ragetlie rule 1.6 Trial period 1.7 Non-competition clause 1.8 Training obligation 1.9 Successive employers
9 9 11 11 12 12 13 13 14 14
2. Law governing dismissals 2.1 Dismissal procedure 2.2 Settlement agreement 2.3 Dismissal upon reaching the age of eligibility for old-age pension 2.4 Notice period 2.5 Appeals (to the Supreme Court) 2.6 Transition allowance 2.7 Equitable remuneration
17 17 18 18 19 19 20 21
3. The new Sickness Benefits Act [Ziektewet]
Association of Temporary Work Agencies Collective Labour Agreement Remuneration Scheme for Temporary Agency Workers [Beloningsregeling ABU CAO voor Uitzendkrachten] 4.1 Hirer’s remuneration
Background information on Adecco Group Nederland
Overview of changing legislation and regulations
Phase B diagram
In accordance with the rules The employment market is rapidly becoming more and more flexible. The number of people with temporary employment contracts is growing quickly. Young people in particular are put to work on the basis of flex models. According to calculations by Statistics Netherlands (CBS) the number of young people aged up to 27 working on the basis of a temporary employment contract rose between 2002 and 2012 from 24% to 40%. Four in ten young people are therefore ‘flexworkers’, working directly at companies or via temping or secondment organisations. All the indications are that this trend is set to continue. Trend watcher Adjiedj Bakas, with whom we organised a series of network sessions for our clients, pays a great deal of attention to the term ‘Flexicurity’ in one of his trend booklets. This mix of apparently contrasting values, which originated in Denmark, is a good indication of what the future holds: continued flexibility as regards work in combination with sufficient security and protection of the rights of ‘flexworkers’. In the Netherlands we already started taking this route in 1996. In the spirit of the Flexibility and Security Act [Wet Flexibiliteit en Zekerheid] our sector representative, the Association of Private Employment Agencies [Algemene Bond Uitzendondernemingen] (ABU), consulted at an early stage with the trade unions to negotiate generally applicable arrangements. A covenant was quickly concluded. In 1999 a milestone was reached in the form of the first ABU CAO for Temporary Agency Workers. The chain arrangement was introduced from which temporary agency workers can derive important rights. Agreements were also made about pensions and training. As one of the original ABU members, Adecco has always and readily subscribed to these agreements. Thousands of temporary agency workers and professionals work each and every day for our clients on behalf of our organisation. We take our responsibility for all these people extremely seriously. These days this no longer means ‘permanent employment’, but job security and long-term employability. This requires a new social basis. Legislation and regulations are dynamic in nature. The Flexibility and Security Act and the first ABU CAO for Temporary Agency Workers lay down new and essential standards for how we, as the business community and society, want to deal with flexible employment.
And increasing insight always produces changes, refinements and sometimes tightening of existing agreements, as is currently the case. In a certain sense, the new legislation and regulations are reforming the employment market. Flex legislation has been amended, the law governing dismissals has changed, the Sickness Benefit Act has been adapted and this is having far-reaching consequences for your organisation if it engages employees on the basis of a temporary employment contract. One thing is clear, and that is that it is becoming more complicated to do things yourself. The options when it comes to entering into successive temporary employment contracts are now limited. The modernisation of the Sickness Benefit Act even implies serious cost risks as regards employees who are ill when their temporary employment contract ends, or become ill shortly thereafter. Flexibility is a key condition for continuing to make a difference in the â€˜new economyâ€™ and in the context of constantly changing market conditions. The reality of increasing flex work means that security and the protection of rights have to be properly arranged and that legislation and regulations have to be complied with carefully. To do this, you have to have a good knowledge of legislation and regulations and be able to interpret these. As far as we are concerned this is part of our daily work. We are keen to share our knowledge with you, for example via this HR Update 2015, and more will follow as necessary. It contains descriptions and visualisations of the most striking changes. If you have any questions, you can rest assured that your contact person will have the necessary knowledge and answers. If you would like to do business without having to worry, with temporary agency workers and professionals giving their maximum, and with the 100% guarantee of compliance with ever-changing legislation and regulations, without any unpleasant surprises later on, you should put your trust in the expertise and commitment of Adecco Group Nederland. Based on the international core values of the worldwide Adecco Group, namely Entrepreneurship, Passion, Customer Focus, Team Spirit and Responsibility, we can contribute, by providing tailor-made flex solutions, to the success of your company or organisation.
Patrick Bakker CEO Adecco Group Nederland
1. Flex legislation The Flexibility and Security Act, which is also known as the ‘Flex Act’ [Flexwet] was introduced in 1999. It had two goals. Firstly it was intended to give employers more freedom to use flexible workers and to guarantee a better legal position for the workers in question. The Flex Act contains stipulations relating to the obligatory continued wage payment, trial periods and the transition to an employment contract for an indefinite period of time via the chain arrangement. In the meantime the employment market has become characterised by more and more flexibility. For this reason, the coalition government wants to implement a number of changes in the flex legislation. To this end agreements were made in the Social Agreement [Sociaal Akkoord] in April 2013. These were then ratified in the Autumn Agreement of October 2013. The changes described below had the status of a bill submitted on 29 November 2013. The Dutch House of Representatives adopted the bill by a large majority after a number of amendments. The Act was also adopted by the Dutch Senate (June 2014). This new law has since been introduced in phases with, for example, the chain arrangement and the fall-back arrangement (and the successive employers rule) came into effect on 1 July 2015 (one year later than expected) while the other elements came into effect on 1 January 2015. This chapter details the main changes.
1.1 The chain arrangement
as of 1 July 2015
UNTIL 1 JULY 2015 A maximum of 3 employment contracts for a definite period of time could be entered into within a period of no more than 3 years. AS FROM 1 JULY 2015 Although it still applies that a maximum of 3 employment contracts for a definite period of time could be entered into, the period during which this is permitted is limited to a maximum of 2 years. This amended chain arrangement does not apply to employees aged up to 18 who, on average, do not work for more than 12 hours a week. In the new chain arrangement it is still possible to conclude into a single long-term employment contract for a definite period of time, meaning for a term of more than 2 years. In that case the employment contracts are not regarded as ‘successive’ and the chain arrangement does not apply. The chain arrangement within a CAO In a CAO context, a different (broader) chain arrangement can be agreed. However, a limit is still set on both the number of temporary employment contracts and the maximum duration of the period during which these temporary employment contracts succeed each other. Within the framework of a CAO, the chain arrangement can be extended to a maximum of 6 employment contracts for a definite period of time during a maximum period of 4 years. In order to be able to deviate from the legal chain arrangement within the framework of a CAO, the following conditions apply: 9
1. The contract is a temporary employment contract. or 2. Broadening of the legal chain arrangement is required in connection with the intrinsic nature of the operations. The chain arrangement and the ABU CAO for Temporary Agency Workers As regards a temporary employment contract it is permissible, within the framework of the CAO, to deviate from the legal chain arrangement. Consequently it is possible to agree, in the ABU CAO for Temporary Agency Workers, a chain arrangement which deviates from the law. However, account still has to be taken of the legally stipulated limit of no more than 6 employment contracts for a definite period of time within a maximum period of 4 years. This has consequences for phase B during which, in accordance with the previous arrangement, a maximum of 8 employment contracts for a definite period of time were permitted within a maximum period of 2 years. In the CAO agreement it has been agreed to adapt phase B as of 1 July 2015. As of 1 July 2015, a maximum of 6 employment contracts for a definite period of time are possible during a period of no more than 4 years in phase B. The maximum number of employment contracts for a definite period of time in phase B has therefore been reduced from 8 to 6. However, the maximum period during which these employment contracts for a definite period of time can be entered into has been extended from 2 years to 4 years. This means that it is possible within the ABU CAO for Temporary Agency Workers for the temporary employment agency to conclude employment contracts with temporary agency workers during a period up to 5.5 years (phase A: 78 weeks and phase B: 4 years). This differs significantly from the maximum statutory period (2 years). Transitional arrangement The legislation provides special transitional arrangements: - Transitional arrangement 1: The new legal chain arrangement applies if an employment contract for a definite period of time is entered into as of (or after) 1 July 2015 and if that employment contract follows a previous employment contract for a definite period of time of less than 6 months ago. This means that an employment contract for a definite period of time which was concluded before 1 July 2015 is subject to the ‘old’ legal chain arrangement (‘3 in 3’) and remains in place as long as that employment contract lasts. - Transitional arrangement 2: The new phase B arrangement applies if, in phase B, an employment contract for a definite period of time is concluded as of (or after) 1 July 2015 and that employment contract follows a previous employment contract for a definite period of time of less than 6 months ago. This means that an employment contract for a definite period of time in phase B which was concluded before 1 July 2015 is subject to the ‘old’ phase B arrangement (‘8 in 2’) and remains in place as long as that employment contract lasts. - Transitional arrangement 3: An extension period to no later than 1 July 2016 applies to allow current CAOs which include a chain arrangement which deviates from the law to be brought into line with the new legal arrangement (a maximum of 3 employment contracts for a definite period of time within a maximum period of 2 years, possibly extended, based on legitimate grounds, to a maximum of 6 employment contracts for a definite period of time within a maximum period of 4 years).
1.2 The fall-back arrangement
as of 1 July 2015
UNTIL 1 JULY 2015 Counting in relation to the chain arrangement (both with regard to the number of employment contracts for a definite period of time and for the maximum term) started again after an interruption of more than 3 months. AS FROM 1 JULY 2015 In the law: the chain arrangement counting restarts after an interruption of more than 6 months. In the CAO: the CAO cannot (any longer) deviate from the legal fall-back arrangement. The fall-back arrangement laid down in the law of 6 months therefore applies in all circumstances. This means that the legal fall-back arrangement is also anchored in the ABU CAO for Temporary Agency Workers: within the phase system of the ABU CAO for Temporary Agency Workers a fall-back option of just 6 months applies as of 1 July 2015. The following is an illustration of this: Phase A: interruption > 6 months fall-back to beginning of phase A Phase B: interruption > 6 months fall-back to beginning of phase A Phase C: interruption < _ 6 months fall-back to beginning of phase B1 Phase C: interruption > 6 months fall-back to beginning of phase A Transitional arrangement In order to change current CAOs which include a fall-back arrangement which differs from the law in line with the new legal fall-back arrangement, an extension period applies up to a maximum of 1 July 2016.
1.3 Agency clause
as of 1 January 2015
UNTIL 1 JANUARY 2015 Based on the law, a agency clause [uitzendbeding] could be included in the temporary employment contract for a period of 26 weeks. This period of 26 weeks could (still) be extended on an unlimited basis in the CAO. AS FROM 1 JANUARY 2015 In the law: the legally permitted period for including a agency clause in a temporary employment contract is still 26 weeks. The possibility for extending this period in the CAO has been limited to a maximum of 78 weeks. In the ABU CAO for Temporary Agency Workers: the maximum of 78 weeks already applies for phase A within the framework of the ABU CAO for Temporary Agency Workers. Consequently, this CAO fits within the boundaries of the new law. As long as the current ABU CAO for Temporary Agency Workers is applicable, this legal amendment does not, therefore, have an impact on the term and structure of phase A.
o not forget that the Ragetlie rule (1.5) might apply, meaning that the phase B contract may not D end by operation of law.
1.4 Obligation to give notice
as of 1 January 2015
UNTIL 1 JANUARY 2015 An employment contract for a definite period of time ended by operation of law at the end of the agreed term and did not have to be cancelled. Neither the employer nor the employee was obliged to give notice in any way about the termination of the employment contract. AS FROM 1 JANUARY 2015 An employment contract for a definite period of time will continue to be terminated by operation of law. However, in the case of employment contracts for a definite period of time of 6 months or longer, the employer is obliged to inform the employee in writing at least 1 month before the end date as to whether the employment contract is going to end or can be renewed (and the latter subject to which conditions). This obligation to give notice does not apply if an employment contract for a definite period of time of 6 months or longer is terminated in between times. The term of each employment contract for a definite period of time will determine whether or not an obligation to give notice applies. The terms of earlier employment contracts will not count. If an employer does not observe this legally stipulated obligation to give notice, or does not do so on time, the employer becomes liable for compensation. In this case, the employer must pay the employee an amount equal to one monthâ€™s salary2, or a proportion of this if the employer has not observed the correct notice period. In this case, the employee will have 2 months after the end of the employment contract to claim this payment. If the employer indicates that it wishes to renew the employment contract but does not state the applicable conditions, the new employment contract will be regarded as being renewed subject to the same conditions as the previous employment contract, with the maximum renewal period being one year. Transitional arrangement for obligation to give notice A transitional arrangement has been put in place for the obligation to give notice. This means that the new obligation to give notice does not apply to employment contracts for a definite period of time of 6 months or longer which end before 1 February 2015.
1.5 Ragetlie rule
as of 1 July 2015
UNTIL 1 JULY 2015 In order to increase the level of legal security for employees, the Flexibility and Security Act included these so-called â€˜Ragetlie ruleâ€™. This arrangement stipulated that, if an employment contract for an indefinite period of time was followed, in a period of 3 months or less, by an employment contract for a definite period of time, the employment contract for a definite period of time would not end automatically by operation of law. In this case the employer had a legal obligation to give notice (as if the employment contract was one for an indefinite period of time), as a result of which the employee retained his right to protection from dismissal. This Ragetlie rule did not apply if the employment contract for an indefinite period of time had been terminated by legal cancellation by the employer or by dissolution by a court, in which cases the successive employment contract for a definite period of time therefore did end simply by operation of law. 12
Basic gross monthly salary, also excluding 8% holiday allowance.
AS FROM 1 JULY 2015 The existing Ragetlie rule still applies, though with two changes. The first change is a supplement to the situations in which the Ragetlie rule does not apply: if an employment contract for an indefinite period of time ends when the employee reaches the age of eligibility for old-age pension. Consequently, if an employment contract for a definite period of time is entered into thereafter, the employment contract for a definite period of time will end by operation of law after the agreed term. The second change means that the period within which an employment contract for a definite period of time succeeds an employment contract for an indefinite period of time is extended from 3 months or shorter to 6 months or shorter, meaning that this period runs parallel to the period of the fall-back arrangement.
1.6 Trial period
as of 1 January 2015
UNTIL 1 JANUARY 2015 In order to include a trial period in an employment contract, the previous regulations did not specify a minimum term of the employment contract. However, they did specify that, in an employment contract for a definite period of time of up to 2 years, the trial period could be no longer than 1 month. In an employment contract for 2 years or longer and in an employment contract for an indefinite period of time, the trial period could last no more than 2 months. AS FROM 1 JANUARY 2015 In the new situation provided for by the Act, a trial period could only be included in an employment contract with a term longer than 6 months. In that case it applies that if the employment contract is entered into for a period of more than 6 months but shorter than 2 years, the trial period may last a maximum of 1 month. In an employment contract for 2 years or longer or in an employment contract for an indefinite period of time, a trial period could be agreed of no more than 2 months. Transitional arrangement for trial period Employment contracts entered into before 1 January 2015 are still subject to the â€˜oldâ€™ regime.
1.7 Non-competition clause
as of 1 January 2015
UNTIL 1 JANUARY 2015 Any employment contract (for a definite period of time and an indefinite period of time) could include a non-competition clause. AS FROM 1 JANUARY 2015 A non-competition clause under the new regulations is now only permitted within the framework of an employment contract for an indefinite period of time. A non-competition clause can only be included in an employment contract for a definite period of time if such is demonstrably essential for the employer due to significant business or service-related interests. These serious business or service related interests must then already be referred to, substantiated and recorded in the non-competition clause.
Transitional arrangement for non-competition clause Employment contracts entered into before 1 January 2015 are still subject to the ‘old’ regime.
1.8 Training obligation
as of 1 July 2015
UNTIL 1 JULY 2015 Employers did not have any legal obligation to offer training to employees. AS FROM 1 JULY 2015 Shortly before the bill was discussed in the Dutch House of Representatives, a proposal was submitted to lay down the issue of ‘training’ in the law. The adopted bill implies that the employer must enable the employee to attend training which is essential for (1) the execution of the job or (2) the continuation of the employment contract if the employee’s job is discontinued or if the employee is no longer able to perform the required tasks. In the event of dismissal procedures, this training obligation may play a significant role because - if relevant - an assessment will also be carried out to determine whether the employer has fulfilled the training obligation. This new legal arrangement came into effect on 1 July 2015.
1.9 Successive employers
as of 1 July 2015
UNTIL 1 JULY 2015 Two criteria applied for successive employers: 1. basically the same skills and responsibilities are required for the new employment contract as in the case of the previous employment contract; and 2. due to the links between the previous employer and the successive employer, the successive employer has to have acquired an insight into the employee’s capacity and suitability. AS FROM 1 JULY 2015 The second criterion is not included in the new definition of successive employers. However, there must (still) be a reason for the employee transferring to the successive employer (for example if the previous and the successive employers have made agreements with regard to the transfer). The period within which a situation of successive employers applies is 6 months (calculated from the 1st day after the end date of the last employment contract). If an employee takes the initiative to start doing the same work for a new employer, the situation of successive employers will not apply.
2. Law governing dismissals In April 2013 the Cabinet approved plans to reform, among other things, the law governing dismissals, as stipulated in the Employment and Social Security Act [Wet Werk en Zekerheid]. The bill was submitted to the Dutch House of Representatives in November 2013, taking into account a number of amendments as adopted in the Autumn Agreement in October 2013. After that, the Dutch House of Representatives approved this Bill on 18 February 2014, though with a number of amendments, as did the Dutch Senate. The coalition intends with the Employment and Social Security Act to make the rules for dismissal easier and strengthen the legal position of employees with temporary employment contracts. A new feature is the so-called â€˜transition allowanceâ€™ which is intended to provide funds to enable employees to return to work as quickly as possible (free example by attending training). The Act came into effect on 1 July 2015. This section describes the main changes1.
2.1 Dismissal procedure
as of 1 July 2015
UNTIL 1 JULY 2015 Up until 1 July 2015 employers could choose from to dismissal procedures irrespective of the grounds for dismissal. They could opt to apply for compulsory redundancy to the Dutch Employee Insurance Agency [Uitvoeringsinstituut Werknemersverzekeringen] (UWV) or submit a request to dissolve the employment contract to the court. AS FROM 1 JULY 2015 Now the Employment and Social Security Act applies, a prescribed dismissal procedure applies depending on the ground for dismissal. This procedure cannot be deviated from. In the following situations the UWV is the designated body when it comes to assessing a planned dismissal: 1. Any application for dismissal for business economic reasons2. 2. Any application for dismissal due to incapacity for work lasting longer than 2 years. Subdistrict Court For all other grounds for dismissal, such as unsatisfactory performance, culpable actions or a long-term disruption in the employer-employee relationship, a request for dissolution of the employment contract will have to be submitted to the court. If the employer (or employee) contacts the wrong body, the application for dismissal or the request for dissolution will not be processed. In situations in which there are a number of grounds for dismissal, for example a combination of business economic reasons and unsatisfactory performance
Without detailing the plans on unemployment benefit (WW). Except in the case of an employment contract for a definite period of time without a premature cancellation clause, in which case dissolution must be applied for to the subdistrict court.
you, as an employer must choose from one of these grounds for dismissal and the corresponding procedure, or initiate both procedures simultaneously with the appropriate bodies. It is therefore impossible to submit a ground for dismissal which, in accordance with the law, cannot be submitted to one of the two bodies, while still initiating a procedure with that body.
2.2 Settlement agreement
as of 1 July 2015
UNTIL 1 JULY 2015 If the employer and employee agreed about the conditions for terminating the employment contract, those agreements could be recorded in a settlement agreement. This is also referred to as â€˜dismissal by mutual consentâ€™. AS FROM 1 JULY 2015 Although the possibility for making termination agreements and recording these in a written settlement agreement still exists, in such instances employees legally have a period of time to reconsider of 14 calendar days. Within that period, an employee can withdraw his or her approval of the conditions resulting from the settlement agreement without having to state reasons. In this case the employment contract continues and all arrangements laid down in the settlement agreement lapse. In such a situation, therefore, the employment contract does not end. This statutory period to reconsider may not be deviated from to the employeeâ€™s detriment. It is, therefore, not possible to agree that this statutory period to reconsider should be ignored or shortened. At least any agreement to that effect will be invalid. This statutory period to reconsider must be referred to and laid down in the written settlement agreement. Failure to do so will mean that the employee will be given a longer period to reconsider, namely 3 weeks. The employee can only use the statutory period to reconsider once every 6 months. If, after using the statutory period to reconsider, an employee then enters into a new settlement agreement with the employer - within 6 months - the employee will, in that case, no longer be entitled to a statutory period to reconsider.
2.3 Dismissal upon reaching the age of eligibility for old-age pension
as of 1 July 2015
UNTIL 1 JULY 2015 An employment contract did not end automatically by operation of law at the moment that an employee reached the age of eligibility for old-age pension. This used to be the case, however, if this had been explicitly agreed in the employment contract or had been laid down in the applicable CAO. If the employee was not willing, at such a point in time, to terminate the employment contract by mutual consent, permission to dismiss was required from the UWV or a request for dissolution had to be submitted to the court.
AS FROM 1 JULY 2015 In the new situation the employer can cancel the employment contracts entered into before reaching the age of eligibility for old-age pension on the date on which the employee reaches the age of eligibility for old-age pension or at a later date without permission to dismiss from the UWV being required or dissolution by the court being necessary. In this case, therefore, a preventive dismissal assessment no longer needs to take place.
2.4 Notice period
as of 1 July 2015
UNTIL 1 JULY 2015 Up until 1 July 2015 employers were able to deduct one month from the applicable notice period, with due regard for a lower limit of one month as soon as they used the permission to dismiss granted by the UWV. In situations in which the court dissolved the employment contract, the court was able to determine whether the date of dissolution would take account of the applicable notice period. AS FROM 1 JULY 2015 Although the legally stipulated notice periods have remained the same, the UWV procedure time can be set off against the applicable notice period. A condition is that a lower limit of one month’s notice period must always apply. In the permission to dismiss the UWV will indicate how much procedure time may be deducted from the applicable notice period. If the court proceeds to dissolve, the employment contract must be dissolved by the court with due regard for the applicable notice period, subject again to deduction of the procedure time, with a lower limit applying of one month notice period.
2.5 Appeals (to the Supreme Court)
as of 1 July 2015
UNTIL 1 JULY 2015 Following a decision by the UWV (application for dismissal) or the court (request for dissolution) no appeal (to the Supreme Court3) was possible. The decision by the UWV or the court was therefore binding. After the UWV had granted permission to dismiss and the employer had cancelled the employment contract, the employee did have the option of initiating an ‘unfair dismissal procedure’ (via the court) after a dismissal in which the employee generally requested financial compensation. AS FROM 1 JULY 2015 Following a decision by the UWV the employer and the employee can ask the Subdistrict Court to review the decision by the UWV. After the review by the Subdistrict Court, it is possible to lodge an appeal to the Court of Appeal, after which appeal proceedings can also be initiated at the Supreme Court. After the Subdistrict Court has decided on a request for dissolution, an appeal can still be lodged with the Court of Appeal. After that, there is still the option of appealing to the Supreme Court. The lodging of appeals (to the Supreme Court) does not suspend operation of the decision which is being appealed against. 3
n appeal to the Supreme Court is the procedure involving an appeal against the decision A taken on appeal.
2.6 Transition allowance
as of 1 July 2015
UNTIL 1 JULY 2015 In the event of a request for dissolution, the court also issued an opinion on the compensation which the employer has to pay the employee. The criterion used was the subdistrict court formula [kantonrechtersformule]: A x B x C. A = seniority (weighted years of service, with years of service < 35 years accounting for 0.5; years of service from 35 to 45 years counted as 1.0; years of service from 45 to 55 years counted as 1.5; and years of service from 55 years onwards counted as 2.0) B = remuneration (gross monthly wage) C = correction factor AS FROM 1 JULY 2015 Any employee who had been employed for at least 2 years, is entitled, as of 1 July 2015 to a transition allowance, with the exception of employees who initiated the termination of the employment contract themselves. In the new regulations relating to the transition allowance, no distinction is made between an employment contract for a definite period of time or one for an indefinite period of time. The amount of the transition allowance is 1/6 monthly salary per full half year of service for the first 10 years of service and 1/4 monthly salary per full half year of service for all years of service as from 10 years. The maximum is set at € 75,000 gross or an amount equal to the gross annual salary (if that exceeds € 75,000). This transition allowance arrangement may have a reflex effect on the termination of the employment contract with mutual consent (2.2). Costs incurred by an employer within the framework of promoting a transition by the employee (transition and/or employability costs), for example outplacement initiatives or training4, may be deducted from the transition allowance subject to certain conditions (provided such is agreed in writing with the employee beforehand). If a successive employer also has to pay a transition allowance to an employee at any given moment and the previous employer also already paid a transition allowance to said employee, the transition allowance already paid by the previous employer may be deducted. The ABU CAO for Temporary Agency Workers stipulates that, as of 1 July 2015, if a temporary employee is taken over by the most recent client (or by another temporary employment agency after awarding on the basis of a tender), the temporary employment contract is then expected to be terminated on the initiative of the temporary employee. Due to the above, a transition allowance is then not applicable. In such a situation, the (other) temporary employment agency does not, therefore, have to pay a transition allowance to the temporary employee at that point in time. However, the successive employer does adopt the transition allowance build-up. If, at any point in time, the successive employer has to pay a transition allowance to the employee, that previously adopted build-up period therefore still applies.
T he ‘Decision on conditions relating to deducting costs from the transition allowance’ [Besluit voorwaarden in mindering brengen kosten op transitievergoeding] lays down which costs may be deducted from the legal transition allowance and which conditions apply.
The transition allowance does not apply: For employees aged up to 18 who have average working hours of no more than 12 hours per week, if the employment contract ends due to reaching the age of eligibility for old-age pension, in the event of a serious culpable act or omission on the part of the employee. Transition allowance in conjunction with the CAO A CAO can deviate from the legal transition allowance provided the CAO arrangement provides for of at least an equal provision which is designed to prevent unemployment or shorten the period of unemployment. Transitional arrangement 1 With regard to the transition allowance, the new arrangement includes a transitional arrangement up to 1 January 2020. For employees aged 50 or older who have been employed for ten years or longer, the following applies during this transitional phase: once an employee reaches the age of 50 the transition allowance will amount to 1/2 monthly salary per full half year of service. The upper limit of € 75,000 gross also applies in this case (or any higher gross annual salary). This transitional arrangement does not apply to employees employed by an employer who has fewer than 25 employees. Transitional arrangement 2 The new arrangement takes account of ‘smaller employers’ (fewer than 25 employees, for whom the second half of the calendar year prior to the end of the employment contract serves as a reference period) by means of a transitional arrangement up to 1 January 2020. This temporary arrangement means that, for the calculation of the transition allowance, only the years of service from 1 May 2013 count in the event of dismissal for business economic reasons due to the employer’s poor financial position. Consequently, the normal transition allowance arrangement still applies to a dismissal on any other ground (for example poor performance) for employees of smaller employers.
2.7 Equitable remuneration
as of 1 July 2015
UNTIL 1 JULY 2015 In the former legislation, the ‘fairness’ of severance pay was included in the subdistrict court formula ‘correction factor’. This correction factor was used to determine whether the severance pay needed to be adjusted upwards or downwards. An upward adjustment was linked to culpable behaviour by the employer, while a downward adjustment was linked to culpable behaviour by the employee. AS FROM 1 JULY 2015 If an employment contract is terminated as result of a serious culpable act or omission on the part of the employer, the court can allocate fair compensation in addition to the transition allowance. No criterion has been developed for use in such instances. The court will have to assess on a case-by-case basis whether a serious culpable act or omission has taken place on the part of the employer and what kind of compensation is fair. The fair payment may also apply in the event that an employment contract is terminated within 2 years, if the Subdistrict Court believes there are grounds.
3. T he new Sickness Benefits Act [Ziektewet] The new Sickness Benefit Act (‘BeZaVa’) came into effect on 1 January 2014. This new law includes a drastic amendment with regard to the procedures which apply to employees with a temporary employment contract. Employers pay for employees with a temporary employment contract who become ill if there temporary employment contract ends. As of 1 January 2014 employers contribute, via a new differentiated premium, to the medical expenses of employees with a temporary employment contract. As a company or organisation you are more or less forced to include your own employees with a temporary employment contract in your absenteeism policy in order to avoid excessive costs. Previously, the costs of these so-called ‘safety netters’ [vangnetters] was dealt with via the UWV. This section includes a short description of the Sickness Benefit Act as of 1 January 2014. As of 1 January 2014 employers contribute, via a new differentiated premium, to the medical expenses of employees with a temporary employment contract. In this context the term employees means: • Employees with a fictitious contract of employment who become ill, such as home workers, trainees, commission workers. • Employees who leave employment while ill (for example employees with an employment contract for a definite period of time). • Employees who become ill within 4 weeks after the end of their period of employment. Costs risk If your business itself employs temporary employees, you may face significant risks. Above the € 314,0001 premium-based wage limit, you are yourself responsible for your ill employees with temporary employment contracts, even if these employees continue to be ill after the end of the employment contract. The expensive consequence may be: 2 years continued payment and 10 years of benefit under the Resumption of Work (Partially Disabled Persons) Regulation [Regeling Werkhervatting Gedeeltelijke Arbeidsgeschikten] (WGA) at the company’s expense. The risks shifted to the temporary employment or secondment organisation Of course temporary employment and secondment organisations also face this risk. If you hire in temporary employees via a bona fide temporary employment or secondment organisation, you will not be responsible. However, the temporary employment or secondment organisation will be responsible for the costs. After all, in this case the temporary employment or secondment organisation is the employer, and not you. It is partly for this reason that a lot of attention is paid within the temporary employment and secondment sector to preventive measures to reduce the risk of absenteeism, and Adecco Group Nederland is no exception. 1
Norm at the time of publication of this edition (July 2015)
of Temporary Work 4. Association Agencies Collective Labour
Agreement Remuneration Scheme for Temporary Agency Workers [Beloningsregeling ABU CAO voor Uitzendkrachten]
The ABU CAO for Temporary Agency Workers records agreements with regard to the relationship between temporary staffing organisations and temporary agency workers. The CAO was preceded by a covenant between employees and employer organisations. This was entered into in 1996, in the spirit of the Flexibility and Security Act. The first ABU CAO for Temporary Agency Workers, which contained arrangements about the legal position, pension and training, was concluded in 1999, for a term of five years. Following a number of changes a new ABU CAO for Temporary Agency Workers was concluded in 2012, once again with a period of validity of five years. When the new ABU CAO for Temporary Agency Workers was drawn up in 2012, the decision was taken to implement the regulation known as the ‘hirer’s remuneration from the very first day of the secondment’ as a standard element of this CAO. In the first instance, the expectation was that this change would come into effect as of 29 December 2014. A later date was agreed in the CAO agreement concluded on 30 September 2014. The hirer’s remuneration is one of the basic points of departure as of 30 March 2015 (barring a couple of exceptions). In this section we clarify the implications of this change.
4.1 Hirer’s remuneration
as of 30 March 2015
UNTIL 30 MARCH 2015 The definition According to the ABU CAO for Temporary Agency Workers (2012-2017), hereinafter also referred to as the ‘CAO’, the hirer’s remuneration (Article 191) consists of the following components: 1. Only the applicable period wage in the scale; 2. The applicable reduction in working hours allowance per week/month/years/ period. At the discretion of the temporary employment agency, this may be compensated for in time and/or money; 3. Allowances for overtime, changed hours, irregular hours (including public holiday allowance) and shift work allowance; 4. Initial wage increase, amount and time buyers determined in conjunction with the client;
As of 30 March 2015: Article 20, paragraph 2 of the CAO.
5. Expense reimbursement (insofar as the temporary employment agency can pay this free of wage tax and social security contributions and premiums: travel expenses, pension costs, equipment costs and other costs necessary in order to carry out the job). If and insofar as government measures cause the reimbursement for travel expenses to be wholly or partially discontinued, the temporary employee will be entitled to the same travel expense reimbursement as the client’s own employees who work in an identical or similar job as the temporary employee, up to a maximum of € 0.19 gross per kilometre. 6. Periodicals, amounts and time as determined by the client. The approach The temporary employee’s remuneration is laid down in Article 19 of the CAO. This article offers a choice (in paragraph 5) between: 1. Paying a temporary employee for the first 26 weeks worked in accordance with the CAO wage scale (ABU remuneration) and after that in accordance with the hirer’s remuneration, or 2. Immediately paying a temporary employee as of the first working day in accordance with the hirer’s remuneration. AS FROM 30 MARCH 2015 In the ABU CAO for Temporary Agency Workers concluded in 2012 a couple of fundamental changes were implemented as of 30 March 2015.
1. As of 30 March 2015 (this is the start of week 14 - 2015), the hirer’s remuneration was applied as standard from day 1 (the composition of the hirer’s remuneration continue to be applied in accordance with Article 20, paragraph 2 of the CAO). 2. Exceptions continue to be possible, which involve opting for the ABU remuneration. • Exception 1 (Allocation job) Intended for temporary agency workers without work experience (up to and including job grade 6): - long-term unemployed (unemployed for longer than one year); - reintegration target groups (including those entitled to a benefit under the Work and Income according to Labour Capacity Act [Wet Werk en Inkomen naar Arbeidsvermogen] (WIA), Disablement Insurance Act [Wet op de Arbeidsongeschiktheidsverzekering] (WAO), Invalidity Insurance (Young Disabled Persons) Act [Wet Arbeidsongeschiktheidsvoorziening Jonggehandicapten] (Wajong) or Work and Social Assistance Act [Wet werk en bijstand] (WWB); - job seekers who, within the framework of the Participation Act [Participatiewet] receive a wage costs subsidy or wage supplement, or job seekers who are able to work full time and earn between 101% and 120% of the statutory minimum wage; - school leavers (who, after completing their education, have been looking for work for at least three months, as well as early school leavers); - temporary agency workers without an initial qualification (who attend training leading to qualifications); - holiday workers; - re-entrants (job seekers who have not been active on the employment market for at least three years); - temporary agency workers who attend training at the level of Vocational Training Assistant [BeroepsKwalificerend Assistent] (BKA) level 1. - A maximum of 52 weeks ABU remuneration is possible for this group before
the hirer’s remuneration has to become applicable. This maximum period of 52 weeks can be extended by a maximum of 52 weeks, for example, if and insofar as the temporary employee in question attends training leading to a qualification (at a minimum of senior secondary vocational education [middelbaar beroepsonderwijs] (mbo) level 2 or Vocational Training Assistant [BeroepsKwalificerend Assistent] (BKA) level 1) and who has not yet completed the training within the first 52 weeks. If this extension is used, the temporary employee is entitled, after 52 weeks of work, to at least one periodical wage increase in accordance with the ABU remuneration scheme. This periodical varies from 2.1% to 2.6% depending on the job grade within which the temporary employee works. A skilled temporary employee from abroad cannot be categorised into this exclusion group 1. • Exclusion 2 (Transition job) This covers temporary agency workers who the temporary employment agency offers a transition job. This group which still needs to be defined engages in ‘work to work’ procedures in the temporary employment sector. By way of an indication, it concerns groups of employees who are going to become unemployed due to a reorganisation and arrangements which are part of a social plan or CAO of an employer who is going to lose said employees. For this group and a maximum of 52 weeks of ABU remuneration is possible before the hirer’s remuneration has to be applied. • Exception 3 (‘temporary employees who cannot be categorised’) This includes temporary agency workers employed in jobs not/or scarcely existing at the hiring in company. The fact that there are no (properly) comparable jobs, means it is impossible to stipulate a hirer’s remuneration. The ABU CAO for Temporary Agency Workers includes a decision tree which can be used to determine whether or not the temporary employee can be categorised. Whether or not temporary employees can be categorised is determined per posting. After periods of 52 (worked) weeks, a temporary employee who cannot be categorised and uses the ABU remuneration at that point in time will be entitled to a periodical wage increase. This periodical in question varies from 2.1% to 2.9%, depending on the job grade within which the temporary employee works. • Exception 4 Exception 4 (Temporary Staff in phase C - an indefinite period of time). The wage level is determined on the basis of the average wage (incl. any ADV allowance received) in the last phase B year of the temporary employee in question (excluding periods of fall-back wage). In the event of a new placement in a lower job grade, a maximum reduction in wage is possible of 10% (one-off fall-back). After periods of 52 weeks a temporary employee in phase C will be entitled to a periodical wage increase. This periodical in question varies from 2.1% to 2.9%, depending on the job grade within which the temporary employee works. A transitional arrangement applies to temporary agency workers who already had an employment contract in phase C on 30 March 2015. The point of departure is that accrued rights will be retained. 27
Background information on Adecco Group Nederland This HR Update 2015 has been compiled for you with the greatest of care by Adecco Group Nederland, provider of General Staffing Services (Adecco) and Professional Staffing Services (Ajilon). Adecco provides its services to large companies, government bodies and non-profit organisations, and the SME [MKB] and is represented in almost all sectors. Ajilon focuses its services on IT Professionals, Engineering Professionals, Finance Professionals, Technology Professionals, Young Professionals and Freelance Professionals. The other members of the Adecco Group Nederland are Pontoon, Badenoch & Clark and Lee Hecht Harrison. Pontoon is specialised in Managed Service Programmes, Recruitment Process Outsourcing and Workforce Consulting. Badenoch & Clark provides Executive Search solutions aimed at high-ranking positions in Finance and HR. The services of career and mobility specialist Lee Hecht Harrison is based on four pillars, namely outplacement, coaching, talent development and change management. The head office of Adecco Group Nederland is in Zaltbommel. The national network consists of approximately 150 branches spread throughout the whole of the Netherlands. The Dutch organisation has well over 1,000 employees. The international Adecco Group is a listed company with its head office in Switzerland. Worldwide, the Adecco Group is the largest provider of HR services with more than 31,000 employees operating from well over 5,100 offices in over 60 countries. Every day more than 650,000 flexworkers and professionals work on behalf of the Adecco Group for more than 10,000 clients. The Adecco Group is a Fortune Global 500 company and is included in the Dow Jones Sustainability Index. The international Adecco Group operates on the basis of five core values â€“ known as Values for Success â€“ namely: Entrepreneurship, Team Spirit, Passion, Customer Focus and Responsibility.
Overview of changing legislation Commencement date
Modernisation of the Sickness Benefit Act
Remuneration scheme ABU CAO for Temporary Agency Workers
Law governing dismissals
BeZaVa: Act on Limiting Absenteeism Due to Illness and Occupational Disability by Safety Netters [Wet beperking ziekteverzuim en arbeidsongeschiktheid vangnetters] (page 23)
Agency clause (page 11) Obligation to give notice (page 12) Trial period (page 13) Non-competition clause (page 13)
and regulations 30-3-2015 (definitive)
Applicable to your own employees (with the exception of the public sector). For hired-in staff the party hiring out takes over the duty of care and the accompanying obligations.
Chain arrangement (page 9) Fall-back arrangement (page 11) Ragetlie rule (page 12) Training obligation (page 14) Successive employers (page 14)
ABU Remuneration scheme (page 25) Hirerâ€™s remuneration (page 25)
Applicable to your own employees (with the exception of the public sector). For hired-in staff the party hiring out takes over the duty of care and the accompanying obligations. Can affect the hiring in conditions in the case of staff hired-in.
Only applicable to hiring in by temping agencies affiliated to the ABU, NBBU and other, non-affiliated temping agencies (not applicable to secondment organisations which are not covered by a temporary employment CAO).
Dismissal procedure (page 17) Settlement agreement (page 18) Dismissal upon reaching the age of eligibility for old-age pension (page 18) Notice period (page 19) Appeals (to the Supreme Court) (page 19) Transition allowance (page 20) Equitable remuneration (page 21)
Applicable to your own employees (with the exception of the public sector). For hired-in staff the party hiring out takes over the duty of care and the accompanying obligations. Can affect the hiring in conditions in the case of staff hired-in.
Phase B diagram Valid until 1 July 2015 Phase A
Total posting period until contrac
Maximum of 8
Fall-back to beginning of phase A after interruption of 26 weeks
Fall-back to beginning of phase B after interruptio Fall-back to beginning of phase A after interruptio
Commencement date 1 July 2015 Phase A
Total posting period up to contrac
Maximum of 6
Fall-back to beginning of phase A after interruption of longer than 6 months
Fall-back to beginning of phase A after interruptio Continue counting in phase B after interruption of
ct for an indefinite period of time is 3.5 years
8 contracts in 24 months
on of 13 weeks up to 26 weeks on of 26 weeks
Contract for an indefinite period of time
Fall-back to beginning of phase B after interruption of up to 26 weeks Fall-back to beginning of phase A after interruption of 26 weeks
ct for an indefinite period of time is 5.5 years
6 contracts in 48 months
on of longer than 6 months 6 months or shorter
Contract for an indefinite period of time
Fall-back to beginning of phase A after interruption of longer than 6 months Fall-back to beginning of phase B after interruption of 6 months or shorter