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Law Work and Security and Flexible Labour

After more than two years of bickering (through the Kunduz agreement, Coalition agreement and Social agreement), our government has now established the new’ Law ‘Work and Security’ (hereinafter referred to as ‘WWZ’), which has become applicable law by means of publication in the Government Gazette (so-called ‘Staatsblad’) on 25 June 2014. The WWZ encompasses changes in law in various areas and these changes also have several different effective dates. The three most important areas of the WWZ are:
  • Flexible Labour
  • Dismissal Law
  • Unemployment Benefits Law (hereinafter referred to as ‘WW’)
This article discussed the changes in the field of Flexible Labour.

1) WWZ and Flexible Employment

The changes in law with regards to flexible employment are described here below. Flexible labour law encompasses employment contracts for a definite period of time (temporary employment contracts) and On-Call contracts.

Rules regarding trial period in temporary employment contracts

Effective 1 January 2015 it is not allowed to include a trial period in a temporary employment contract with a duration of 6 months or less. Only if the temporary employment contract has a duration of more than 6 months, a trial period may be agreed upon according to the schedule here below: Contract for 6 months or less No trial period allowed Contract for 6 months of more, but less than 2 years Maximum trial period 1 month Contract for at least 2 years Maximum trial period 2 months Contract without fixed end date (e.g. temporary replacement or project-based duration) Maximum trial period 1 month

Non-competition clause in temporary employment contract

Effective 1 January 2015 it is not allowed to include a non-competition clause in an temporary employment contract, unless this clause (agreed upon in writing) clearly motivates why the non-competition restriction is necessary. An employer must make explicitly clear that there are significant company interests and concerns which necessitate the non-competition restriction for the specific position of the employee in question (e.g. specific product- of customer knowledge). Without proper motivation the clause is invalid and the employee can attempt to get the clause nullified. In case the temporary employment contract is extended, the non-competition clause needs to be agreed upon anew – a supposed tacit renewal of the clause is invalid.

Notification mandatory in temporary employment contract

The WWZ dictates that, effective 1 January 2015, an employer must inform the employee, in writing, and at least one month or longer prior to the end date of the temporary employment contract; a) whether the contract will be extended and b) under which conditions. If the employer fails to do so, he must pay the employee a fine in the amount of 1 (gross) monthly salary. If the employer dóes notify the employee, but too late, he must pay the employee a pro-rata fine, equal to the duration of the delay in notification. The employee must claim this fine within 2 months of the end date of the temporary contract, otherwise he forfeits his claim. Furthermore it is important that, even when the employer dóes extend the temporary employment contract, the notification is mandatory. If the employer fails to do so, the employee can still claim the fine mentioned here above, even after the end of the last temporary employment contract. The mandatory notification duty does not apply to a temporary employment contract with a duration of less than 6 months, or if there is no fixed end date, such as a temporary replacement during illness of the incumbent employee or a project-based contract.

Temporary Contract Chain Arrangement changes effective 1 July 2015

At present it is allowed to offer a maximum of 3 temporary employment contracts in a row (‘chain’), provided to total duration of these 3 contracts does not supersede 3 years. In case a 4th temporary contract is offered, or the total duration of the 3 contracts supersedes 3 years, the employment is deemed to be for an indefinite period of time. This ‘chain’ of 3 contracts can be ‘broken’ only if there is an interruption period of more than 3 months between any of the contracts. Effective 1 July 2015, the maximum duration of this so-called temporary contract chain arrangement is reduced from 3 years to 2 years. The maximum number of temporary employment contracts remains 3, but the minimum interruption period between any of the contracts is extended from 3 to 6 months. An exception to this rule are temporary employment contracts for employees younger than 18 years of age and working less than 12 hours per week, or for employees who work on the basis of a dual learning-working training program. Contracts that have been entered into prior to 1 July 2015 will continue to fall under the current temporary contract chain arrangement, even when the end date of such contract falls after 1 July 2015. The current possibilities to deviate from the above described existing situation by Collective Bargaining Agreement will be greatly curtailed by the WWZ. It will still be possible to deviate from the – new – contract chain arrangement, but the term of 2 years may not be extended beyond 4 years and the number of contracts may be increased from 3 to a maximum of 6 contracts. Furthermore, this deviation by collective bargaining agreement may only be applied by temporary employment agencies and on specific functions, to be determined in the collective bargaining agreement.

Entitlement to salary payment On-Call and 0-Hours employment contracts

The main rule of On-Call employment contracts is that entitlement to salary exists only when actual work has been done. De law further specifies that, in case the employee is not able to carry out his work for reasons attributable to the employer, the employee dóes have an entitlement to salary payment. This rule can only be excluded during the first 6 months of the On-Call contract and unlimited if based on an applicable collective bargaining agreement. The WWZ determines that, for collective bargaining agreements that come into effect after 1 January 2015, the exception as described here above, is only applicable for specific functions and only if these are incidental in nature (such as substitute workers). Furthermore, the Minister has the right to determine that for certain industries even this last deviation is no longer allowed. This means that working with 0-Hours contracts will become impossible for these industries.

Most Important Changes – Effective Dates

1 January 2015 No trial period trial period allowed in an temporary employment contract with a duration of less than 6 months 1 January 2015 Mandatory Notification (yes or no extension of) temporary employment contract for 6 months or more 1 January 2015 Deviation through collective bargaining agreement on rule no salary entitlement if not worked (0-Hours or On-Call contract) only for specific functions/incidental cases 1 July 2015 Changes in Temporary Contract Chain Arrangement For a complete overview of the effective dates of the new WWZ please see: Law Work and Security, Overview Effective Dates