News

Dutch Act on Balanced Labor Market (WAB). The bill for the WAB has been adopted by Parliament on 5 February last. Although the plans for a longer trial period did not make it, as to the rest the bill has been upheld for the largest part. If the Senate also agrees to the bill, then the WAB will enter into force on 1 January 2020.

Below a brief overview of the most relevant items.

• New ground of dismissal
  Dismissal will become easier. A ground of dismissal is added which allows employers to combine several grounds of dismissal. Based on this combined ground, the reasons for dismissal presented do not have to be ‘fully-fledged’. Based on a combination of an incomplete work file by reason of dysfunction and disruption of the working relationship the court may dissolve the labor agreement.

• Additional benefits
  If the court dissolves the labor agreement based on a combination of (not fully-fledged) grounds of dismissal, additional benefits can be assigned to the employee. The maximum additional benefits have been set at 50% of the transitional severance payments, and so they are owed next to the transitional severance payments and any fair compensation.

• Transitional severance payments
  Employees will more readily be entitled to transitional severance payments. The transitional severance payments will be owed as of the first day of the employment and will be calculated based on the actual duration of the employment. The practice of rounding this sum up to semesters has ended by this. Furthermore, the increase of the transitional severance payments as of 10 years of service or more will be abolished.
  

• Chain rule
  Employees will be entitled to a permanent contract after three years. Presently this is two years. The maximum number of temporary contracts in the chain allowed (i.e. three) remains intact. The interim period of six months also stays intact, although the period can be reduced to three months in case of seasonal work under collective agreement.
  

• Stand-by contracts
  Under the new law, employers shall offer stand-by workers having a min/max or zero-hours contract a permanent number of hours. This number of fixed hours will be determined based on a reference period of the 12 previous months. Furthermore, it will become obligatory to call in a stand-by worker at least four days prior to the planned work. Derogation from this term is possible under collective agreement.
  

• Payrolling
  To payroll workers and workers employed by the employer the same working conditions must apply. The temporary work clause and the option of broadening the chain rule will end for payroll companies.

Compensation for transitional severance payment after two years of illness

At the end of February, the Regulation for payment of the transitional severance payment was published, with a further explanation of the possibility of receiving compensation for the transitional severance payment that is (or has been) paid to a long-term incapacitated employee. Compensation can be applied for from 1 April 2020, also with retroactive effect, for paid transitional severance payments from 1 July 2015. The Regulation includes the deadlines within which the compensation can be applied for at the UWV, i.e. within six months after payment of the transitional severance payment or – for payments that took place between 1 July 2015 and 1 April 2020 – within six months after 1 April 2020.

In the explanatory notes to the Regulation, attention is also paid to the information required by the UWV to assess the compensation request. This includes, among other things, the employment contract, proof that the employment contract has been terminated due to long-term illness (for example, the decision of the UWV or the sub-district court or the termination agreement), the paid wages during sickness (on the basis of pay slips), the data used to calculate the level of the transitional severance payment and proof of payment of the severance payment. Employers who want to apply for compensation are therefore advised to keep all the documents which regard termination of the employment and its reason, as well as the calculation and payment of the transitional severance payment.

Dutch Act on introduction of supplementary parental leave (WIEG)

The Act has become effective on 1 January 2019. As a result, the ‘parental leave’ of partners has been expanded from 2 to 5 days (upon full-time employment). Upon part-time employment the right to leave days will be converted based on one time the number of working hours a week. Moreover, as of 1 July 2020, partners may get  5 supplementary weeks of parental leave.

Dutch Act on Work Councils (WOR)

Employer must actively inform employee about outstanding holidays

Based on recent European case law, an employer is expected to inform the employee in an active and timely manner about the number of outstanding holidays and the expiry date of those days. If an employer does not comply with this information obligation or cannot prove that he has informed the employee, the (statutory) holidays do not expire. We therefore advise employers to periodically inform the employees about how many holidays are still outstanding for that year. The employees must also be informed timely that these days must be taken before 1 July of the following year (unless deviating agreements have been made to that end) and that if the days are not taken they will be canceled.

Brief overview of other changes as of 1 January 2019

• Dutch Act on Minimum Wages

The full-time minimum wage (as of 22 years and older) has been set at EUR 1,615.80 gross a month.

• Maximum transitional severance payments

The maximum transitional severance payments have been raised from EUR 79,000 to EUR 81,000 gross or a gross annual salary if it exceeds EUR 81,000.

• Statutory retirement age

The start of the statutory retirement age is presently 66 years and 4 months.

• 30% rule

Employees from abroad are only allowed to apply the 30% rule for 5 years instead of 8 years. There is a transition rule for cases where the 30% rule was already applied on 1 January 2019. For this group the change will become effective as of 1 January 2021.

• Bridging rule for transitional severance payments relaxed

The transition rule facilitates small employers having less than 25 employees who have a hard time to make lower transitional severance payments in case of dismissal. The conditions have been relaxed. Where formerly, there had to be losses in each of the three financial years preceding the start of the dismissal procedure for business economic reasons, it will presently be examined whether such period in average resulted into losses. The condition of negative own capital has also been abolished and replaced by the rule that the own capital value in the year preceding the dismissal procedure shall not exceed 15 percent of the total capital of the company. The transition rule is effective up to 1 January 2020. Next, the small employer will fall under the normal payment regimen of the transitional severance payments.