Gerard Zuidgeest

Introduction The question if a self-employed person should qualify as an employee remains a hot topic. Qualification as an employee can have far-reaching consequences, such as the obligation to pay premiums and payroll taxes retroactively, as well as dismissal protection, continued salary payment during illness, vacation days and vacation allowance. Should pension premiums also be paid retroactively? Pension as a condition of employment The principle of the Pension Act is that an employer is not obligated to offer a pension to his employees. Nevertheless, an employer may involuntarily be bound to a pension plan, for example because a collective bargaining agreement requires it or because an industry pension fund is compulsory. Retrospective premium obligation? Employers operating in sectors in which employees are entitled to pensions under a collective bargaining agreement or a compulsory industry pension fund might face retrospective liability for past pension contributions if a self-employed person is deemed to be an employee. After all, for pension funds, the premium is due even if an employee was not yet registered. The North Holland District Court recently ruled on a case in which an employee was employed as an employee from 1 January 2022, having first worked as a self-employed person for the company from 1 January 2016. He had always done the same work as other employees, who had always accrued pension benefits. The employee in question had also accrued a pension since 1 January 2022. The employer had offered the pension scheme to its employees without obligation. Was the self-employed worker now entitled to pension accrual retroactively from 1 January 2016? The court ruled that there was no legal basis for the retroactive payment of pension benefits in this particular case.  Practical tips Although the consequence of a self-employed person being classified as an employee does not always result in pension premiums being due retroactively, employers would do well to take into account the risk of pension premiums being due when assessing the risks of hiring self-employed persons, and to make organisational, financial and/or contractual provisions for this if necessary. Contact Do you have questions about pension in case of self-employment or would you like to exchange views? Please feel free to contact Jaap Harrijvan or one of our other employment law specialists.

On February 19, 2025, a bill was proposed that limits the compensation scheme for the transition payment in case of dismissal due to long-term disability to small employers. This proposal has significant implications for employers. The compensation scheme, originally intended to relieve employers, will now only be available to small employers. This article discusses the details and implications of this change. Limitation on Compensation for Transition Payment The compensation scheme for the transition payment was introduced to support employers in paying the transition payment after 104 weeks of illness. For many employers, it felt unjust to have to pay a transition payment after two years of continued salary payment. This often led to ‘dormant employment contracts’, where the employment contract was not terminated to avoid payment of the transition payment. With the new bill, the government aims to limit the compensation scheme to small employers. Small employers are defined as those who have been active for less than two years or have a wage bill of no more than 25 times the average taxable wage per employee. In 2025, this threshold was set at a wage bill of no more than € 990,000 per year. Implications for larger employers For medium-sized and large employers, this change means that they will have to pay the transition payment themselves in case of dismissal due to long-term disability. This can have significant financial consequences. The question arises whether employers are still obliged to terminate the employment contract if they are not compensated. The legislator leaves this to the judiciary, but it is likely that existing case law will be maintained. The change is expected to take effect on July 1, 2026. No transitional law is proposed, meaning the new rules will apply immediately. Employers will only be eligible for compensation if the 104-week waiting period ends before the law comes into effect. No specific arrangements have been made for special employers, such as social development companies. Contact Do you have questions about the compensation scheme for the transition payment or would you like to discuss it? Please contact Gerard Zuidgeest, Rose Horstman, or one of our other employment law specialists.

On February 21, 2025, the Supreme Court ruled on the classification of employment relationships, specifically in the context of self-employed workers. As early as 2021, the Amsterdam District Court ruled that Uber drivers are employed under an employment contract, meaning that Uber must comply with the Taxi Transport Collective Labour Agreement (CAO). On appeal, the Amsterdam Court of Appeal asked preliminary questions to the Supreme Court regarding the role of the criteria ‘entrepreneurship’ in assessing the employment relationship. The Supreme Court has now provided answers to these questions. No hierarchy in criteria In the Deliveroo ruling, the Supreme Court ruled that the assessment of whether an agreement constitutes an employment contract depends on all the circumstances of the case. This includes the nature and duration of the work and the way the work and working hours are determined. In the Uber ruling, the Supreme Court clarified that there is no fixed hierarchy among these criteria. This means that all nine criteria must be equally weighed. For employers, this means that the classification of an employment relationship can be more complex, as every aspect of the working relationship must be assessed. This can lead to different outcomes, even if two workers perform the same work under the same conditions. Entrepreneurship: external aspects matter An important aspect emphasised by the Supreme Court is the entrepreneurship of the self-employed worker. The Supreme Court considers that the entrepreneurship criterium is not given more weight than the other criteria. This means that entrepreneurship can be decisive for the classification of the agreement. Not only does the general entrepreneurial situation of the worker in the relationship between the workers and the client play a role (internal entrepreneurship), but circumstances outside the relationship are also important (external entrepreneurship). In terms of external entrepreneurship, one might consider whether the worker is registered with the Chamber of Commerce, the number of clients the worker has outside the specific relationship, or the number of investments the worker makes for its own business. Retaining self-employed workers? Stimulate entrepreneurship! Employers are advised to encourage the external entrepreneurship of their self-employed workers. This can be done, for example, by encouraging them to take on assignments from multiple clients and ensuring that the worker clearly profiles themselves as an entrepreneur, for instance, with their own website. Contact Do you have questions about the classification of employment relationships or would you like to discuss this further? Please contact Gerard Zuidgeest, Rose Horstman, or one of our other employment law specialists.

When should an employee disclose information about chronic physical or psychological complaints during a job application? This was the subject of a recent ruling by the Court of Appeal in ‘s-Hertogenbosch. The disclosure of medical Information in the application procedure An applicant is not required to voluntarily provide medical information. This is only different if the applicant knows at the time of concluding the employment contract that their health condition would significantly and long-term hinder them in performing the job duties. Additionally, an employer may not ask questions about the health condition of a prospective employee, past sick leave, or any limitations during the application process, except in the context of a legally permitted medical examination. Ruling: the facts in the case before the Court of Appeal in ’s-Hertogenbosch The employee in this procedure had suffered from chronic psychological complaints (PTSD and an anxiety disorder) since 2011 following an unsuccessful surgery. The employee applied for a position as a security guard at a courthouse in October 2023 and did not disclose his medical situation during the application process, nor the fact that he was currently unfit for work as a security guard at the Department of Transport and Support (DV&O) of the Ministry of Justice and Security. The employee was hired and was declared fully recovered by the DV&O company doctor at that time. Shortly after starting at the courthouse, the employee fell ill. The employer requested the termination of the employment contract due to gross misconduct, arguing that the employee had failed to disclose his medical situation. The employer’s requests were denied in the first instance. Court’s judgment: no disclosure obligation for employee The Court of Appeal, like the subdistrict court, ruled that there were no grounds to terminate the employment contract. The court ruled that the disclosure obligation only exists if the illness or disability makes the applicant unfit for the position and the applicant knew or should have understood this. In this case, the employee had fallen ill several times at his previous employer, but this was not due to the specific job requirements, and the employee had always fully recovered. The position at the courthouse was less demanding than the position at DV&O, leading the employee to believe that his chronic illness would not be an issue. The employer argued that an applicant must also disclose their illness if the illness does not absolutely prevent the performance of essential job requirements, but the applicant will experience significant hindrances in fulfilling the role. The court dismissed this argument, as it would mean that every chronically ill person would have to disclose their chronic illness during a job application, which is contrary to the protection provided by the Dutch Equal Treatment Act on Grounds of Disability or Chronic Illness (Wgbh/cz). Practical tips As an employer, do not ask questions about the health condition, past sick leave, or any limitations of the applicant during the application process, unless it concerns a legally permitted medical examination. Additionally, ensure that the job requirements are detailed and are clearly stated in the job application and/or job profile. Discuss these requirements during the application process and ensure written documentation. If possible ask the former employer for references. Contact Do you have questions about the disclosure obligation during job applications or would you like to discuss further? Please contact Gerard Zuidgeest, Rose Horstman, or one of our other employment law specialists.

Article 7:653a of the Civil Code dictates that an employer may not prohibit or restrict an employee from performing ancillary activities  unless there is an objective reason for doing so. How does this clause work in practice, specifically when an employee is sick?    The effect of the ancillary activities clause  Ancillary activities are activities that an employee performs outside of his work. In principle, ancillary activities are permitted. In practice, the clause often includes the condition that an employee may only perform ancillary activities with the prior consent of the employer.  The employer may only refuse such consent if he has an objective justification. Examples of such an objective justification included in the law are:  the health and safety of the employee;  the protection of confidentiality of company information;  the integrity of public services;  the avoidance of conflicts of interest; and  the violation of a legal requirement.   The employer does not have to include the objective reason in the employment contract but must provide it when invoking the agreed-upon clause.  Performing ancillary activities during illness  Suppose an employee is sick and the employer finds out that this employee is performing ancillary activities. How does a judge rule in such a situation? In a case before the District Court of The Hague, an employee of the municipality of Amsterdam reports in sick. This employee is receiving  benefits due to occupational disability of 80-100%.   In July 2022, this employee reports in sick for her reintegration work due to a corona infection. The employer submits a termination request to the Netherlands Employees Insurance Agency (UWV) due to  long-term disability, but it is rejected because recovery is considered possible within 26 weeks. In October 2023, the employer again applies for a dismissal permit, which is then rejected because it turns out that the employee has been performing similar work at the Municipality of Rotterdam. An integrity investigation follows which shows that the employee has been working 24 hours a week at the Municipality of Rotterdam , which she did not report as stated in the absence protocol and code of conduct of the Municipality of Amsterdam. The Subdistrict Court ruled that the employee had violated Section 8 of the Civil Servants Act, which constitutes a breach of contract. The employee should have reported her intention to enter the service of the Municipality of Rotterdam. The employee should also explicitly have  asked permission to do so, and should have reported this to the company doctor. What was reported by the company doctor cannot be interpreted in any other way than that there was (a degree of) intent on the part of the employee to mislead the company doctor and therefore also the municipality. The overpaid wages must be repaid by the employee (Section 7:629 (5) of the Dutch Civil Code). The employment contract is terminated, without awarding the transitional compensation.  Practical tips for employers  Although the inclusion an ancillary activities clause employee may be important, an employer can also take steps in the situation where no clause is agreed upon but the employee does perform ancillary activities  during illness. The employer has several options depending on the situation. The employer may have grounds to  dismiss the employee either by instant dismissal or through a termination  procedure in court. In the latter case, the employer can choose to terminate  the employment contract for breach of contract. The options are highly intertwined with the circumstances of the case; in some cases, the employer has to tolerate that the sick employee also performs work elsewhere.  Contact Would you like to know more about ancillary activities? Feel free to contact Gerard Zuidgeest, Rose Horstman or one of our other specialists in employment law. Do you have another question? With expertise in eighteen areas of law, La Gro is happy to assist  you.

It is often assumed that Dutch employment law requires an employer to initiate a mediation process before an employment contract can be terminated  on the grounds of irreconcilable differences in the employment relationship (the g-ground).  Such a requirement is based on  case law, where mediation is often deemed necessary as an effort that can be expected of an employer in order to restore the relationship. But is mediation always mandatory, or can the employer in some cases make a plausible case that there is no longer any point in initiating mediation?  The Court of Appeal of Den Bosch recently ruled that in that specific case an attempt at mediation was not  necessary. The case in question involved a small organisation with only six employees. The employee had been hired as a driver, with the prospect of becoming a shareholder. However, it soon became apparent that this partnership would not succeed. The employee had scolded his supervisor stating he was a  “bad manager” and the employee had been working under the influence of drugs. The employee claimed that his behavior stemmed from a lack of recognition, while the employer proposed a personal improvement plan. The employee refused to cooperate with this plan. He had also called in sick; the company doctor recommended mediation. Eventually, the employer proposed a settlement agreement to end the employment agreement, but an agreement could  not be reached.   The employer petitioned the subdistrict court to terminate  the employment contract because of a disrupted working relationship. The employee argued that the elements to terminate the employment agreement due to irreconcilable differences (g-ground) was not sufficient because no mediation had taken place, despite the company doctor’s advice.  The appellate court ruled that mediation was  not mandatory in this situation. The appellate court ruled that the relationship between the parties had hardened to such an extent that mediation had no chance of success. The size of the organisation also played a role: with only six employees, re-employment or avoidance of contact between the parties was impossible. The court emphasized that an employer is not obliged to start a mediation process “against his better judgment,” even if the company doctor advises it. According to the court, the company doctor’s advice in this case was a standard response, without knowledge of the actual gravity of the situation.  Practical implications   This ruling seems to be an exception to the general line in case law, where mediation is often seen as necessary. Especially if the company doctor advises mediation, since an employer will want to avoid being blamed for ignoring the advice of the company doctor in the context of illness.  At the same time, this case is quite common in  practice. In many cases it is quite clear that an employment relationship has been disrupted to such an extent that recovery seems out of the question. This ruling  may well set a precedent for smaller employers. However, it remains important to consider whether mediation can be useful in a particular case. If an employer skips mediation too easily, he runs the risk of a termination request being denied and having to (temporarily) retain the employee in question or to pay a high termination fee.  Do not come to the conclusion too quickly that no mediation needs to take place.    Practical tips for employers  Evaluate the situation carefully: seriously consider whether mediation really does or doesn’t have  a chance of success; it should not be ruled out too quickly; Document well: if mediation is not an option, make sure you can justify and corroborate this, such as with correspondence or statements about the seriousness of the situation.  Smaller organisations:  an additional argument for skipping mediation may be found in the fact that contact between severing quarreling colleagues cannot be prevented due to the size of the organization. In larger organizations, however, transfer will often be a possible outcome and thus mediation will more often be an obligation to which the employer must cooperate.  Company doctor’s advice: while the advice of a company doctor to start mediation is important, an employer does not always have to blindly go along with it if it is clear that the prospects of reconciliation are highly unlikely.  How can La Gro be of assistance?  Feel free to contact Gerard Zuidgeest, Jaap Harrijvan or one of our other specialists in employment law. Do you have another question? With expertise in eighteen areas of law, La Gro is happy to assist  you.