Employment contract Work and Security Act (“WWZ”) turned upside-down by Balanced Labour Market Act (WAB)
On 10 October 2017, the VVD, CDA, D66, and ChristenUnie parties presented their Coalition Agreement, entitled “Confidence in the Future” (we refer you to the blog by our colleague Björn Schouten: http://www.boontje.nl/regeerakkoord-en-arbeidsrecht-vertrouwen-toekomst/). The agreement announced a large number of measures to reform the labour market with the aim of reducing the gap between “permanent” and “flex” employment. Those measures have now been set out in the parliamentary bill for the Balanced Labour Market Act [Wet arbeidsmarkt in balans], which was made available for Internet consultation on 9 April 2018. Here are the most important changes that have been announced:
Dismissal, severance payment
- A ninth ground for dismissal will be added, namely the cumulation ground [cumulatiegrond]. This allows the employer to combine two or more circumstances. A “cocktail” of circumstances may therefore lead to dismissal again (as was the case before the Work and Security Act (“WWZ”);
- If the employment contract is terminated on the basis of the cumulation ground, the employee can receive a maximum of half the transition compensation [transitievergoeding] on top of the transition compensation;
- The transition compensation will be calculated differently: it will become due from day one and the increased accrual from ten years onwards will be abolished;
- In the event of dismissal on account of long-term incapacity for work (more than 104 weeks), the employer will be compensated for paying the transition compensation;
- There will be a (supplementary) scheme for small companies to compensate for the transition compensation in the event of the company being closed down due to the employer’s illness or the employer reaching retirement age.
Probationary period, succession of fixed-term contracts, and non-competition clause
- In the case of a contract of employment for an indefinite period of time, it will be possible to agree on a five-month probationary period;
- The allowable period for a succession of fixed-term employment contracts [ketenregeling] will be extended, making it possible to conclude three fixed-term contracts within a period of three years;
- If there is a collective labour agreement (“CAO”), the six-month period required for interrupting the succession may be reduced to three months in the case of recurring temporary work that can be performed for a maximum of nine months a year;
- An exception will be made to the succession arrangement for primary school supply teachers who are taken on to replace a sick teacher;
- If the employment contract for an indefinite period contains a non-competition clause and the contract is terminated by the employer during the probationary period, then the employer can only hold the employee to the non-competition clause if important business or service interests apply and the employer informs the employee of this in writing, stating the reasons.
- On-call workers (whose work has not been laid down or not laid down unequivocally) must be called up for work by the employer, in writing, at least four days in advance. If the work is subsequently cancelled, the on-call worker will remain entitled to pay for the hours that he/she would have received if the work had in fact been performed. The four-day period may be reduced to a maximum of one day in a CAO;
- After being employed for twelve months, on-call workers (whose work has not been laid down or not laid down unequivocally) must receive a written offer for a number of working hours equal to the average number per month during that preceding twelve-month period.
Other changes (payrolling and unemployment insurance contributions)
- With the exception of retirement, payroll employees will receive the same terms and conditions of employment as the employer’s actual employees;
- In addition to the existing definition of a contract with a temporary employment agency [uitzendovereenkomst], a definition of a payroll contract [payrollovereenkomst] will be included in the Dutch Civil Code [BW].
- The way unemployment insurance contributions are calculated will be altered. There will be a single system applicable to all companies, with it being determined for each individual employee whether the low or high contribution applies. The low contribution rate will apply to employees with an employment contract for an indefinite period; the high rate will apply to all other employees.
The effective date for the changes is 1 January 2020. It is possible that responses to the Internet consultation and/or parliamentary debate may still give rise to amendments to the Balanced Labour Market Act. In the meantime, Boontje Advocaten will of course keep you informed.
Don’t hesitate to contact us (Margriet van der Velden-Rijnsburger) for more information.