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Changes in Dutch employment law as per 1 January 2020

Changes in Dutch employment law take place every year on 1 January. On 1 January 2020, a considerable number of changes take place in Dutch employment law. I have listed these changes for you below.

Introduction cumulation ground

One of the most important changes is the introduction of the cumulation ground in Dutch dismissal law.

Currently there are 8 exhaustive grounds for dismissal for an employer to terminate the employment contract with an employee.  These grounds for dismissal are laid down in Section 7:669 paragraph 3 of the Dutch Civil Code.

It concerns the following grounds for dismissal:

Ground for dismissal a: Business economic reasons
Ground for dismissal b: Long-term incapacity for work
Dismissal ground c: Frequent absenteeism due to illness
Ground for dismissal d: Non-performance
Dismissal ground e: Culpable act or omission of the employee
Ground for dismissal f: Refusal of employment due to conscientious objection
Ground for dismissal g: Disrupted employment relationship
Ground for dismissal h: Other circumstances

From 1 January 2020, ground for dismissal i will be added. Namely the ground for cumulation. The cumulation ground refers to an accumulation of (incomplete) dismissal grounds c, d, e, g and h. More information about the cumulation ground can be found in my blog about the cumulation ground.

Transition fee changes

Transition fee for older employees

As of 1 January 2020, the temporary higher transition fee for older employeees will be abolished.

Until 1 January 2020, there is an exception for employees who are 50 years of age or older upon termination or non continuation of the employment contract and who have been employed for at least ten years by an employer who employs 25 employees or more.

These employees receive a transition fee of 1/2 month’s salary for every period of six months that they have been employed by the employer from the age of 50. As of 1 January 2020, this no longer applies.

Accrual of transition fee changes

In addition, with effect from 1 January 2020 there will be a change in the accrual of the transition fee for each employee.

It is now the case that the employee is only entitled to a transition fee if the employment contract has lasted at least 24 months.

Furthermore, for the first 120 months or the first ten years of service, the employee will receive 1/6th month’s salary for every six months that the employment contract has lasted.

For subsequent years of service, the employee is entitled to 1/4th month’s salary for every six months that the employment contract has lasted.

As of 1 January 2020, this will change into an accrual of 1/3rd monthly salary for each calendar year that the employment contract has lasted and a proportional part thereof for a period that the employment contract has lasted shorter or longer than one calendar year.

So both for the first ten years of service and afterwards and therefore also for the first 24 months. The accrual of the transition fee therefore starts on day 1 and is also due in the event of dismissal during the probationary period.

Compensation for transition fee in the event of termination of the company

Furthermore, from 1 January 2020, the small employer will be compensated for the transition fee that must be paid in the event of dismissal as a result of termination of the company due to reaching the state pension age, illness or death. The latter changes are in line with the compensation for the transition fee in the event of dismissal after long-term incapacity for work.

However, unlike in the case of compensation for the transition fee in the event of dismissal after long-term incapacity for work, there is no question of retroactive effect. The compensation for the transition fee paid in the event of termination of company is therefore only provided if the transition fee is paid on or after 1 January 2020.

Temporary exception for small employers expires

Finally, with effect from 1 January 2020, the temporary exception for small employers will cease to apply in the event of a poor financial situation.

For employers who employ fewer than 25 employees, there is now an exception for the amount of the transition fee.

Years of service prior to 1 May 2013 may be disregarded when determining the amount of the transition fee if the employee is employed by an employer who employs fewer than 25 employees and the employment contract is terminated due to the employer’s poor financial situation.

It is required that the ground for dismissal is the loss of jobs as a result of the cessation of the company’s activities or, viewed over a future period of at least 26 weeks, the necessary loss of jobs as a result of taking measures for efficient business operations due to business economic circumstances.

The exception shall apply until 1 January 2020. After that date, the years of service prior to 1 May 2013 shall also be taken into account for small employers when determining the amount of the transition fee.

Regardless of the ground for the dismissal and whether or not the employer’s financial situation is poor.

Replacement provision instead of transition fee

A collective labour agreement (CLA) stipulates that a dismissed employee will receive a replacement provision instead of a transition fee. Since 1 January 2020, this can only be done in the event of dismissal for business economic reasons. The replacement provision no longer has to be equivalent to the statutory transition fee. However, the provision must consist of measures to prevent or limit unemployment, a reasonable financial compensation or a combination of both.

Many civil servants are now subject to employment law

From 1 January 2020, many civil servants will be subject to employment law.

Dismissal ground(s) in payroll tax return

As of 1 January 2020, the employer is obliged to state the dismissal ground(s) of an employee as accurately as possible in the payroll tax return in order to prevent fraud with unemployment benefits as much as possible.

Changes to the chain scheme

The chain scheme regulates when a series of fixed-term employment contracts is converted into an employment contract of indefinite duration.

Currently, the statutory chain scheme for non-state pension entitled employees regulates that a series of fixed-term employment contracts is converted into an employment contract of indefinite duration if there are more than three fixed-term employment contracts or if the series of fixed-term employment contracts has exceeded a period of 24 months. This statutory chain scheme may be deviated from by means of a collective labour agreement (CLA).

Furthermore, the statutory chain scheme for employees entitled to state pension regulates that a series of fixed-term employment contracts will be converted into an employment contract of indefinite duration if there are more than six fixed-term employment contracts or if the series of fixed-term employment contracts has exceeded a period of 48 months. This statutory chain scheme can also be deviated from by means of a collective labour agreement (CLA).

The statutory chain scheme for employees not entitled to state pension will change with effect from 1 January 2020. For this group of employees, the period after which successive fixed-term employment contracts will automatically change into an employment contract for an indefinite period of time will be changed from 24 months to 36 months.

In addition, the possibility will be introduced to reduce the interruption period of six months to three months by collective labour agreement or by regulation of the Minister of Social Affairs and Employment in the case of recurring temporary work which can only be performed during a maximum of nine months per year .

The new provision is broader than the existing exception for seasonal work, which concerns jobs that can merely be performed for a maximum of nine months per year as a result of climatic or natural circumstances.

Finally, with effect from 1 January 2020, the chain scheme will no longer apply to substitute employees in primary education and the Act on Centres of Expertise if the employment contract has been entered into in connection with a replacement due to illness of an employee who holds a teaching or educational support function with lesson-related or treatment tasks.

No transitional law for chain scheme

No transitional law applies to the chain scheme. There is therefore immediate effect. This means that an employment contract ending on or after 1 January 2020 is subject to a 36-month chain scheme. Even if the employment contract was entered into before 1 January 2020.

Of course, this is different if the collective labour agreement (CLA) deviates from the chain scheme for the benefit of the employee, as it reads after the entry into force of the legislative amendment. In that case, the CLA provisions in favour of the employee remain in force.

Unemployment premium differentiation according to the nature of the employment contract

With effect from 1 January 2020, unemployment premium differentiation will no longer take place by the unemployment premium being derived from the sector and risk premium group in which the employer is active. Instead, as of 1 January 2020, the nature of the employment contract will be leading for the level of the unemployment premium.

In general, this is defined as a low unemployment premium to be paid in case of an employment contract for an indefinite period and a high unemployment premium in case of a fixed-term employment contract. However, this is not entirely correct. The scheme is more nuanced than that.

When the employer has to pay the low unemployment premium and when the high unemployment premium I explain in my blog about unemployment premium differentiation.

Changes for on-call agreement

On-call agreements will remain possible, but the position of on-call employees will be strengthened and permanent availability will be prevented.

In case of uncertainty about the extent of the work due to the fact that the extent of the work is not fixed (zero-hours contract) or not unambiguous (min max contract), the employer is obliged to call the on-call employee at least 4 days in advance in writing or electronically. If the employer fails to do so, the employee does not have to respond to the call.

If the call is partially or completely withdrawn or the times are changed within 4 days before the start of the work, the employee is entitled to salary for the period for which the employee was called upon.

Any withdrawal or change must also take place in writing or electronically. A verbal withdrawal or amendment is not legally valid and does not release the employer from the obligation to pay the employee’s salary for the period for which the employee has been called upon.

A shorter period than 4 days can be agreed upon by collective labour agreement (CLA) with regard to the convocation, revocation and alteration of the times. However, the period may never be shorter than 24 hours.

The employee is given the same notice period as the convocation period, which the employer must observe in the event of a convocation. If no different regulations apply to the collective labour agreement (CLA), this means that a notice period of four days applies to the on-call employee. Furthermore, as of 1 January 2020, on-call employees may give notice at any time and therefore do not have to give notice towards the end of the month.

Furthermore, if the employment contract has lasted 12 months, the employer will be obliged to make a written or electronic offer within one month (i.e. for the first time in the 13th month) for a fixed volume of work. The average working hours offered must be at least equal to the average working hours of the preceding 12 months.

If the employer does not make an offer, the employee is entitled to salary for the hours that the employee would have had if the offer had been made by the employer and accepted by the employee.

The employee does not have to accept the offer. The freedom to continue to work on the basis of variable hours therefore remains if the employee so wishes.

Incidentally, it should be noted that these measures are not intended to oblige the employer to make an offer to continue the on-call agreement or to enter into a new employment contract for a fixed or indefinite period of time. It is merely a question of standardising the scope of employment within the existing contractual relationship. It is therefore still possible to terminate by operation of law a on-call agreement entered into for a period of 12 months.

For the calculation of the 12-month period, employment contracts that have succeeded each other at intervals of no more than six months are added together.  The earlier offer that the employer made or should have made to the employee after 12 months shall also apply to employment contracts that succeed each other at intervals of not more than six months. It also applies to succeeding employers.

The above measures will only apply to employment contracts with a deferred performance obligation, such as zero-hours contracts and min max contracts, and not also to preliminary contracts.

After all, in the case of preliminary contracts, the employee does not have to respond to a call at all and an employment contract only arises if the employee responds to the call.

Furthermore, the aforementioned measures do not apply if the working hours have been agreed, but the times at which the work must be carried out are not fixed.

Finally, by means of a collective labour agreement (CLA) or a regulation by or on behalf of a competent administrative body, it may be determined that the aforementioned measures do not apply to positions designated by that collective labour agreement (CLA) or regulation, which, as a result of climatic or natural circumstances, can only be performed for a maximum period of nine months per year and cannot be performed by the same employee consecutively for a period of more than nine months per year.

The above measures are separate from the general obligation to continue to pay wages, as included in Section 7:628 of the Dutch Civil Code. Furthermore, the measures referred to above do not affect the fact that, pursuant to Section 7:610b of Book 7 of the Dutch Civil Code, the employee may invoke a presumption of working hours for a certain size and, on that basis, may institute a wage claim against the employer.

In addition, the employer may still request the employee to come and work within the period of 4 days. For example, due to illness of another employee or weather conditions. If the employee is able to come to work, the employee is of course allowed to respond to the call. However, the employee cannot be obliged to respond to the call.

No transitional law for on-call agreement

On-call agreements shall not be subject to transitional law. There is therefore immediate effect.

Changes payrolling

The lighter employment law regime applicable to the temporary workers, the so-called temporary workers regime, is declared inapplicable to payrolling. Furthermore, payroll employees will be entitled to the same primary and secondary employment conditions as employees of the principal. Payroll employees will also be entitled to an adequate pension scheme, but – unlike the other changes – not as of 1 January 2020. This will be as of 1 January 2021.

Salary specification changes

As of 1 January 2020, the salary specification must state whether the employment contract is a written contract of employment or not, whether the employment contract is for an indefinite period of time or not and whether the contract is a on-call agreement or not, in which case the on-call agreement is understood to be a zero-hours contract or a min max contract. No preliminary contract.

No changes in probationary period

Initially, the proposed legislation also included changes to the probationary period. These proposed amendments will not be implemented. The legislation on probationary periods remains as it is at present.

“No work, no wage” becomes “No work, still wage”

Until 1 January 2020 it is ‘no work, no wage, unless’. From 1 January 2020 this will be: ‘no work, still wage, unless’. The legislator has not intended to change (legal) practice with this change. Nevertheless, this legislative amendment does have consequences for employers and employees.

Until 1 January 2020, the risk and burden of proof lies primarily with the employee. If the employee does not perform his or her work, he or she is in principle not entitled to salary, unless the employee can prove that he or she did not perform the agreed work due to a cause that should reasonably be borne by the employer.

As of 1 January 2020, the risk and burden of proof lies primarily with the employer. If the employee does not perform his or her work, he or she is in principle still entitled to salary, unless the employer can prove that the employee did not perform the agreed work due to a cause that should reasonably be borne by the employee.

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About the author
Ilma van Aalst started working as a Dutch employment law attorney at the beginning of 2000 and thus works as a Dutch employment law attorney for more than 19 years now. Ilma first worked as a Dutch employment law attorney for more than ten years at Poelmann van den Broek in Nijmegen and Eversheds Sutherland in Rotterdam. In 2010, Ilma started 7 Laws of Persuasion. Since 2007, Ilma has been a member of the Dutch Employment Attorneys Association (Vereniging Arbeidsrecht Advocaten Nederland, VAAN), the association that received the quality mark logo for employment law specialists from the Dutch Bar Association. Since the beginning of 2016, she has been an intervision moderator recognised by the VAAN. She is also a member of the Rotterdam Employment Attorneys Association. In addition to her work as a Dutch employment law attorney, Ilma has also been working as a Dutch employment law lecturer since 2008.
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