Balanced Labour Market Act Adopted by the Senate

The Balanced Labour Market Act (WAB) has recently been adopted by the Senate by a narrow majority. The new act, which will enter into force on 1 January 2020, aims to reduce the differences between temporary and permanent employment contracts. Measures include, amongst other things, making payrolling more expensive and easing dismissal rights. The most important changes are summarized below.

• In addition to the existing grounds for dismissal, a new ground for dismissal is introduced; the so-called cumulation ground. Currently, dismissal is only possible if one of the eight grounds for dismissal is fully met. The cumulation ground gives the courts the option to combine several reasons for dismissal. The cumulation ground cannot be used for dismissals for commercial reasons or for long-term occupational disability.
• The other side of the medal is that in the case of a dismissal on the cumulation ground, the court may award the employee an extra fee on top of the transition fee (and possibly the fair compensation) up to a maximum of 50% of the transition fee.

• Under the WAB, employees will already be entitled to a transition fee from the first day of their employment (including the probationary period). At present, an employee is only entitled to a transition fee if he has been employed for at least two years.
• The accrual of the transition fee is reduced for employees who have been employed for a long time. In the future, each employee will accumulate 1/3 monthly salary per year. At present, this accrual starting from a 10-year employment is 1/2 monthly salary per year.

• For employers, the WW contributions will be lower when an employee is offered an employment contract for an indefinite period instead of a temporary employment contract.

• The current sequence system of a maximum of three temporary employment contracts in two years will be extended to a maximum of three temporary employment contracts in three years.
• The current rule that the sequence is interrupted after a period of more than six months will remain unchanged.
• However, the option is offered to limit this period to three months in a collective labour agreement. This is only possible in the case of recurrent temporary work that can be done for nine months per year as a maximum (e.g. seasonal labour).

• Payroll employees must get at least equal treatment in terms of employment conditions as employees employed by the client.
• The definition of the temporary employment contract is not changed.
• Payroll employees are entitled to an adequate pension scheme. During the debate in the Senate last week, the Minister did promise to postpone this measure until 1 January 2021.

• Under an on-call contract, the employer has to call the on-call worker at least four days in advance. If he does not do this on time, the on-call worker is not obliged to obey the call.
• If the employer does call the employee on time, but withdraws the call within those four days, the on-call worker remains entitled to the wages over the period for which he was called.
• In a collective labour agreement, this term of four days can be shortened to one day.
• The employer will be obliged to offer an employment contract after one year for the number of hours the on-call worker has worked on average in the preceding year.

Today, several motions have also been adopted by the Senate:

• A motion by the SGP means that on the occasion of a subsequent bill, the government will lay down that the f-ground (dismissal as a result of refusal of work in connection with conscientious objections) cannot be part of the compilation ground.
• There is a fear that there will be a shift from payroll contracts to contracts with self-employed individuals and temporary employment contracts (the waterbed effect). The government has been asked to submit before the summer the elaboration of proposals for a new policy for self-employed individuals and measures aimed at fighting pseudo self-employment.

The WAB will enter into force on 1 January 2020.


If you would like to learn more about the WAB or if you have questions in this regard, please contact Marieke Opdam.