Hundreds of flex workers of ING Bank are victim of financial problems of TCP Solutions. TCP Solutions is a payroll company and an important ING partner responsible for the payment of the flex workers of ING. The flex workers have not been paid since June. There is also uncertainty about the payments for the following months.
ING employs one- to two-thousand flex workers, mainly IT and compliance experts. ING engaged TCP Solutions as intermediate party for the administration and payment of these flex workers.
ING’s position is that it did pay the invoices to TCP Solutions and does not want to guarantee the payment arrears. Due to the financial problems of TCP Solutions, the flex workers are worried whether they will be paid at all. However, ING states that the talks about a solution are still ongoing.
Can ING be held liable for payment of the flex workers?
Dutch law does not provide a clear answer to the question whether the flex workers could claim payment from ING. The Dutch Act on Combating Sham Arrangements (“WAS”) provides that if an employee does not receive the (full) wage from his employer, the employee can hold the client of the employer jointly and severally liable for the lost wages (the so-called “supply chain liability”). Therefore, if the flex workers are able to substantiate that they have an employment relationship with TCP Solutions, they can, as employees of TCP Solutions, hold the client of their employer, ING, liable for the lost wages. It is however questionable whether the flex workers can be considered employees of TCP Solutions and the WAS applies.
The Dutch government adopted an act in February 2016 that regulates the conditions under which a contract is not qualified as an employment agreement according to the Tax Authority: the Assessment of Employment Relationships Deregulations Act (“Wet DBA”). A working relationship is qualified as an employment agreement if three constituent elements are fulfilled, namely (1) there is a personal obligation to perform the job, (2) the principal is obliged to pay wages and (3) there is a relationship of authority. However, there is still a lot of uncertainty because of the open guidelines that are open to several interpretations. Therefore, the enforcement of the Act is suspended until at least 1 January 2020. In the meantime, the government is working on new legislation to fight pseudo self-employment by setting clearer criteria, such as a rate floor.
More companies use intermediate parties
More companies use intermediate parties such as TCP Solutions to outsource the administration and payment of their (flex) workers. One of the reasons is that employers in that case do not have to deal with the obligations of an employer themselves.
In the Netherlands, the Balanced Labour Market Act (“WAB”) will enter into force on 1 January 2020. One of the measures included in the WAB is to make payroll constructions less attractive and more expensive for employers. This measure may slow down the rising use of intermediate parties. We will keep you posted on these developments.
