On 31 March, further clarification was provided regarding the wage compensation scheme (NOW). It is now clear what is meant by “drop in turnover” and which “wage bill” forms the basis for the compensation. It is not entirely clear, however, what must now be paid to on-call workers.
Chamber letter
From the room letter It appears that the total wage bill for January 2020 will form the basis for the advance payment of wage compensation. The letter to Parliament pays little further attention to the question of how much should continue to be paid to on-call workers. It does, however, state that consideration was given to including an additional condition for on-call workers. However, as this would have made the system too complex, the idea was scrapped.
Amount of continued payment
The letter to Parliament encourages employers to continue paying on-call workers’ wages for the same number of hours as they worked in January 2020. But what if an on-call worker worked far fewer hours in January than, for example, over the last three months (December, January and February)? The on-call worker would then continue to receive wages equivalent to those in January, even though he or she actually worked far more hours in other months.
The on-call worker could then invoke the so-called legal presumption regarding the extent of employment, which we discussed earlier message.
From a legal perspective, an on-call worker may, under certain conditions, claim that they are entitled to continued payment of wages based on the average number of hours worked over the past three months. This average number of hours may be higher than the number worked in January. As an employer, you can, however, contest this claim and refute it, but you must have valid grounds for doing so.
Options
What, then, is the most straightforward solution? The letter to Parliament does not provide any clarity on this point. We believe there are two possibilities.
- Pay the wages as received by the on-call worker in January 2020; if an on-call worker did not work in January 2020, then pay the wages for November 2019 (in accordance with the details of the scheme; see the explanatory notes to Article 11).
- Continue to pay wages based on the average number of hours worked over the past three months (December, January and February) (legal framework: Article 7:610b of the Civil Code).
With option 1, there is a risk that the on-call worker will not agree and will invoke option 2.
Under option 2, the result is that, as an employer, you may now have to continue paying wages in excess of the amount on which the compensation is based. It has also become clear that a higher wage bill in the months of March, April and May does not lead to a higher subsidy being awarded.
Our advice would therefore be to choose option 1 and to continue paying the wages for January 2020 (and, if the on-call worker did not work during that month, for November 2019). If the worker did not work in either month, no wages should be paid. In the latter case, the on-call worker may still choose to invoke option 2. This could then give rise to a legal dispute.
Additional payment or recovery
Within 24 weeks of the end of the NOW scheme, you, as an employer, must submit an application for the subsidy to be determined. The UWV will then determine the final amount of the subsidy.
The parliamentary documents state that an adjustment will only be made if the total wage bill is lower (in other words, the subsidy will then be reclaimed). As mentioned, the parliamentary documents state that a higher wage bill in the months of March, April and May will not result in a higher subsidy being awarded.
Entitlements of on-call workers following the NOW scheme
Finally, there is the question of whether on-call workers will still be able to rely on the continued payment of their fixed salary following the introduction of this scheme. In principle, the legal framework remains in force, so on-call workers retain the right to rely on the legal presumption regarding the extent of their working hours. Case law will have to determine in due course whether the exceptional circumstances may still play a role in this regard. It is also questionable whether on-call workers actually want fixed hours, given that they may then be bound by fixed working hours and days, and whether or not they accepted the offer of fixed hours at the start of this year.