This fact sheet is also available in pdf.
From 1 January 2020, there will be a number of changes to employment law for all employers. Some of these changes can already be taken into account. With the adoption of the Balanced Labour Market Act (WAB), the legislator is seeking to reduce the risk associated with permanent and flexible employment. You can read a point-by-point summary of whether this will be beneficial for you as an employer in this memo.
Extension of the chain provision
In 2015, the Work and Security Act (WWZ) stipulated that after three fixed-term contracts with a combined duration of no more than two years, a permanent contract is created by operation of law. With the introduction of the WAB, the maximum duration of two years will be extended back to three years. However, the maximum number of consecutive fixed-term contracts will remain at three. As an employer, this will therefore give you the option once again to enter into, for example, three one-year fixed-term contracts.
Tip: when extending or entering into a fixed-term contract with an employee, you can already take the longer duration of three years into account. This is because there is no transitional provision. However, the new fixed-term contract must end after 1 January 2020.
In addition to the relaxation of the chain provision, the option has also been introduced to reduce, by collective agreement, the six-month period between two employment contracts to three months, provided that the work in question is recurring temporary work that may be carried out for a maximum of nine months per year (including seasonal work).
Temporary supply teachers in primary and special needs education are excluded from the chain provision.
On-call contracts
If you use on-call contracts (zero-hours or min-max), the following will apply from 2020:
As an employer, you must give the employee at least 4 days’ notice. If this is not done in good time (in writing or electronically), the employee is not obliged to respond to the call-out. Under a collective labour agreement, the notice period may be reduced to 24 hours. If, as an employer, you withdraw a call-out within 4 days of it being issued, the on-call worker retains their right to pay for the hours for which they were called out.
In addition to the above, from 1 January 2020, you are obliged to make a written (or email) offer to an on-call worker who has worked for you for one year or longer, for a contract covering the number of hours the employee has worked on average over the preceding 12 months. This offer must be made no later than the following month, or earlier if the contract expires before then. The key requirement is therefore that the offer is made. If the employee does not accept the offer, you will have fulfilled this requirement. As long as you fail to make this offer, the on-call worker is entitled to pay for the average number of hours worked.
Tip: On-call staff who have been working for you for one year or more as at 1 January 2020 must have received a written offer by 1 February 2020 for fixed hours based on the average number of hours worked over the past 12 months.
A specific tip for the hospitality sector: The current collective labour agreement for the hospitality sector includes an additional provision regarding temporary staff. As an employer, you are currently required to offer temporary staff at least 156 hours’ work per 52-week period. Make sure you record this offer in writing (e.g. by email) so that you can demonstrate at any time that you have complied with this requirement. For the time being, this provision applies in addition to the legislative amendment mentioned above.
Employment Law
Whereas under current dismissal law an employee can, in principle, only be dismissed on the basis of a single ground for dismissal, the introduction of the ‘cumulative grounds’ makes it easier for employers to dismiss employees through the courts. This means that a combination of grounds for dismissal is now possible. In principle, this was already possible prior to the introduction of the WWZ in 2015. What is new, however, is that the court may award additional compensation of up to 50% of the applicable transition payment.
Transition allowance
As is well known, under the current rules, employees are entitled to a transition payment as soon as they have been in service for two years or more, provided that the dismissal is initiated by the employer. This is set to change from 1 January 2020! From the first day of their employment contract (including during the probationary period), employees will be entitled to a transition payment. As a result, from 1 January 2020, the transition payment will have to be calculated on a pro rata basis according to the number of days for which they have been paid.
For each year of service, the transition payment will amount to one-third of a month’s salary, including for contracts lasting longer than 10 years (currently, a higher rate applies from 10 years onwards). In addition, the higher transition payment for those aged 50 and over will be abolished.
There will also be a new scheme for small employers (< 25 employees) to receive compensation for the transition payment if they are forced to close their business due to retirement or illness. However, this scheme will not come into effect until 1 January 2021. In addition, the transition payment will be compensated if, as an employer, you have dismissed an employee due to long-term incapacity for work (two years’ illness, known as a ‘dormant employment contract’). This compensation will take effect from 1 April 2020, provided that the conditions set by the UWV are met.
Finally, the scope for deducting training costs from the transition payment is being further expanded. Costs relating to employability measures aimed at securing a post with another employer, or at securing a different post within the same company, may be deducted from the transition payment.
Tip: if you are planning to make an employee redundant, work out which option is more favourable in terms of the transition payment: redundancy before or after 1 January 2020.
Lower unemployment benefit contributions for those on permanent contracts
The unemployment benefit sector contribution currently depends on the sector to which a company is assigned. From 1 January 2020, there will be a single sector contribution that is the same for all sectors. This contribution is divided into two categories: the high contribution and the low contribution. For 2020, the difference between the two contribution rates is 5%.
To encourage employers to offer employees permanent contracts, you may apply the lower sector-specific contribution rate to an employee if they have a permanent contract with fixed working hours for an indefinite period. For employees with any other type of contract, the higher contribution rate applies.
Payroll
From 1 January 2020, employees working on a payroll basis will be entitled to at least the same terms and conditions of employment as those employed directly by the client. As a result, hiring staff on a payroll basis is likely to become more expensive.
If you have any questions or comments, please contact Jos Eerden and/or Gerard van Essen on 024 3650965 or by email at jeerden@vwg.nl or gvanessen@vwg.nl.
The purpose of this note is to outline a scheme in broad terms. For the sake of clarity, matters have therefore been presented in simplified terms. VWG is therefore not liable for the consequences of any actions taken or not taken as a result of this memorandum. This memorandum was written on 1 July 2019. Mno account has been taken of subsequent case law and supplementary legislation