Bill for Balanced Labour Market Act

On 9 April 2018, the bill “Balanced Labour Market Act” (Wet arbeidsmarkt in balans, “WAB”) of Minister Koolmees of Social Affairs and Employment was presented for internet consultation. This consultation is open until 7 May 2018, after which date the Minister intends to present the bill to the Council of State and the Lower House of Parliament. The projected date of entry into force is 1 January 2020. The bill is an elaboration of arrangements that were made in the coalition agreement. Below, you will find a short overview of the most important changes proposed.

Additional Ground for Dismissal

  • The Government proposes to introduce a new ground for dismissal in addition to the existing grounds for dismissal: the ‘cumulation ground’. This cumulation ground offers employers the option of combining several incomplete grounds for dismissal into one full-fledged ground for dismissal. At present this is not possible. The cumulation ground cannot be used for dismissals for commercial reasons or due to long-term 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 fair compensation, if any) up to a maximum of 50% of the transition fee.

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 starting from an employment of ten years is lowered to 1/3 monthly salary per year of service. At present, this accrual starting from 10-year employment is 1/2 monthly salary per year. Over the first 10 years of service, the accrual remains 1/3 monthly salary.

Sequence System

  • The current sequence system of a maximum of three contracts in two years will be extended to a maximum of three 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).

Probationary Period and Non-Competition Clause

  • The probationary period for permanent contracts will be extended from two to five months.
  • In the case of a fixed-term contract of two years or longer, the probationary period becomes three months maximum.
  • The employer cannot keep the employee to his non-competition clause if the employee is dismissed during the probationary period, unless the employer proves that this is necessary on compelling grounds in the interests of the business or service.

On-Call Contracts

  • Under an on-call contract, the employer has to call the on-call worker in writing at least four days in advance. If he does not do this on time, the employee 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 employee remains entitled to the wages over the period for which he was called. In a collective labour agreement, this term can be shortened to one day.
  • If the work is not (unequivocally) defined (for example in zero-hours contracts), the employer will have to offer employment after one year for the number of hours the on-call worker has worked on average in the preceding year.

Payrolling

Payrolling remains possible, but is made less attractive. The Cabinet presents a bill in which the lighter employment-law regime of the secondment agreement is declared inapplicable to payrolling. Payroll employees must get at least equal treatment in terms of employment conditions as employees of the user undertaking.

Conclusion

Since the WAB is a bill, it is still subject to change. If the plans will go ahead unchanged, employers seem to get a little more room to dismiss staff by the introduction of the cumulation ground, for example by combining an incomplete file based on inadequate performance with an incomplete file based on a damaged working relationship. However, this will be balanced by higher compensation to the employee.

 

We will keep you posted of developments.

Author(s)

  • Thijs RidderThijs Ridder