La Gro
News & insights
Gerard Zuidgeest
Attorney at Law
The employment law implications of downloading (sensitive) company information
Most employment contracts include a confidentiality clause. Under such a clause, the employee is obliged to keep sensitive company information confidential. It may happen that an employee downloads confidential and sensitive data, for example on his private laptop or phone. This could have major consequences for the employee.
Case Law
In a recent case before the District Court of Gelderland, both a confidentiality clause and a penalty clause had been agreed upon in the employee’s employment contract. The employer had informed the employee that he was dissatisfied with the employee’s performance and intended to terminate the employment relationship. A few days after the employer presented the employee with a settlement agreement, the employer received a security alert from Microsoft due to suspicious activity on the employee’s account.
When questioning the employee regarding the suspicious activities, it appeared that the employee had downloaded company files on his private laptop. The employee feared being excluded from access to his work environment and therefore could not defend himself against the alleged underperformance at work. However, the employee had downloaded a significant amount of files including reports from the company physician and performance of other staff members subordinate to employee.
The judge ruled that downloading all of this company-sensitive information was culpable. The employee thereby seriously damaged the employer’s trust. However, the high bar of serious culpability was not met because, in the judge’s opinion, the employee did not act intentionally to harm the employer.
In a recent similar case before the Court of Appeal in The Hague, an employee had also downloaded confidential and sensitive company information for the purpose of his defense at the the Netherlands Employees Insurance Agency (UWV). In this case it was not established whether the employee had only downloaded information which he could use for the procedure or also other (confidential) documents. The immediate dismissal by the employer was upheld.
Practical tips for employers
As an employer, it is wise to check whether an employee has downloaded information in the context of a dismissal case. Because the verification should not violate the General data protection regulation (AVG), it is good to have a policy in place when certain information may be checked. Sending confidential information can constitute a violation of the confidentiality clause. If the employment contract includes a penalty clause for this circumstance, the employer can impose a fine on the employee.
It is wise to design the confidentiality clause so that even sending company information to employees’ own accounts counts as a violation.
Can La Gro be of assistance?
Do you have a question about confidentiality and protecting company information? 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.
Gerard Zuidgeest
Attorney at Law
Mediation for employee calling in sick due to conflict
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.
Gerard Zuidgeest
Attorney at Law
Dismissal and compensation for performing ancillary activities during illness
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.
Angela van der Does-Mekes
Attorney at Law
Update on pseudo self-employment in 2025: no fines to be imposed
In November, we wrote a blog on pseudo self-employment and the lifting of the Dutch tax authority’s enforcement moratorium from 1 January 2025 onwards. The article provided a step-by-step plan for identifying collaborations with self-employed people and adjusting them where necessary and possible. The aim of all this was to avoid abusive employment relationships (as much as possible) and to be prepared for the Dutch tax authority’s doubling down on enforcement regarding pseudo self-employment.
On 18 December 2024, the State Secretary for Finance further informed the Lower House about the enforcement plans for 2025. In addition, the Dutch tax authority has published its Enforcement Plan for labour relations 2025 . The conclusion is that a number of mitigating measures have been taken, softening the blow from enforcement in 2025. In brief, these measures are as follows.
No fines from pseudo self-employment enforcement
The main update is that in 2025, the Dutch tax authority will impose no fines whatsoever on employers who continue to work with self-employed workers on a pseudo self-employment basis. This applies to both default penalties and punitive fines (unless malicious intent is involved). It was already known that no punitive fines would be imposed; so what is new is that no default penalties will follow.
However, more relaxed measures have been announced to give companies and organisations more time to adjust their operations.
Soft landing for pseudo self-employment enforcement
The Dutch tax authority has further announced the following relaxations in its enforcement plans:
To begin with, ‘in principle’, there will be a company visit and thus ‘in principle’ not an inspection of the accounts (audit). In this way, the Dutch tax authority is responding to the request of the Lower House to be able to warn organisations before account inspections are initiated. A company visit is not a mandatory gateway, but it does offer the possibility of an initial warning. A warning is obviously less severe than enforcement, which will follow if something is found to be wrong during a company visit. When and which choice will be made for the type of visit is not yet entirely clear; there will be further guidance on this, expected during January 2025;
There is a possibility of pre-consultation with the Dutch tax authority, which can be requested via a digital application form. This makes sense if an organisation works with many self-employed people and to this end has developed a working method that properly ensures effective self-employment[1];
All currently existing approved model agreements will be automatically extended until 31 December 2029. This means that if the model agreement is strictly followed in practice, it should provide assurance that there is no pseudo self-employment. Of course, the trick remains to organise things on the shop floor in such a way that the self-employed worker actually determines his or her own work and there is no question of employer authority.
Enforcement in 2025
The measures announced by the Dutch tax authority may reduce the sense of urgency to adjust business operations with self-employed workers. However, despite the soft landing, which is certainly in place, as far as we are concerned, organisations would do well to make a start in 2025. Now is the time to develop a new and future-proof method of managing and embedding self-employed workers at clients’ workplaces.
Full enforcement will actually begin in 2026, meaning the reimposition of fines.
Contact
We are aware that many of our clients will be affected by Dutch tax authority enforcement. Within our team, Angela van der Does-Mekes and Gerard Zuidgeest deal with this topic on a daily basis. Do you also have questions and want to exchange views on whether the self-employed workers you hire are not actually employed? Then please contact either of these, or one of our other specialists.
The Dutch tax authority is again taking pseudo self-employment enforcement measures. La Gro – keeping you informed of the latest updates, including that no fines will follow in 2025.
Arnout Koeman
Attorney at Law
The Dutch Authority Consumer & Market clarifies transaction reporting process
On 19 December 2024, the Dutch Consumer & Market Authority (“ACM“) announced that it has clarified and updated the merger notification process (link in Dutch only). A concentration is a merger, an acquisition or the creation of a joint venture.
Background
Under Dutch competition law, companies must report a merger, acquisition or joint venture to the ACM if they meet the following two conditions: (i) the companies merging have a combined annual turnover of EUR 150 million or more worldwide and (ii)
at least two of the merging companies each have an annual turnover of €30 million or more in the Netherlands
This notification takes place by submitting a notification form. In this form, the parties to the transaction provide details (for example) of the parties and their activities, the markets in which they operate and what position the parties occupy in these markets after the transaction (and whether this is problematic or not). The notification to the ACM is separate from a notification to, for example, the Dutch Healthcare Authority (NZa) or the Investment Screening Bureau (“BTI“). Regarding a notification to the BTI under the Vifo Act, see our previous blog (link).
Current practice
Currently, it was already common practice to (informally) contact the ACM to announce a notification in advance. Often, the opportunity was then also immediately taken by (an authorised representative of) parties to provide (summary) information about the notification, such as information about the parties, (the lack of) overlap in terms of parties’ activities and the type of transaction. This contact moment could especially benefit the speed of non-problematic reports (on the condition that sufficient information was provided beforehand).
New practice
The ACM has now made this notice mandatory for every notification and formalised it through an intake form on its website (link in Dutch only). This intake form must be completed “about a week” before the official notification. By doing so, companies already provide relevant information to the ACM, for instance on the type of transaction and on the activities of the companies involved
A practical addition is also that parties can indicate in advance if they cannot answer certain questions in the notification form. For example, it often happens that parties do not have direct contact details of their competitors in the market, while the ACM should receive this information according to the notification form. In our experience in the past the ACM was not very strict in answering this question for non-problematic notifications. In that case, parties usually received an (implicit) waiver to provide this information. From now on, the ACM will explicitly contact parties to reject or grant the request to leave questions unanswered.
Finally, the ACM has taken the opportunity to bring the notification form more in line with the European Commission’s notification form. For instance, the ACM now requires parties in the notification form to prepare a summary for the Official Gazette and NACE codes (i.e., activity codes of a company link) must be included. The European Commission requests similar information in its own notification form.
Analysis
We welcome these developments. This is the latest step in a longer-running process by the ACM to simplify the notification process. At the same time, this reduces the burden on companies during the notification process. This process started several years back with the possibility of submitting a notification to the ACM digitally. It has now led to an intake form on its website. Especially for those notifications where the ACM already immediately sees no problems (e.g. because the parties to the transaction have no overlap in their activities), these measures are expected to lead to faster turnaround times. At the same time, this gives the ACM more room for those notifications that seem more problematic.
Questions
Do you have any questions on this topic? Or do you need support as a company with a notification to the ACM? If so, please feel free to contact Arnout Koeman or one of our other specialists.
Arnout Koeman
Attorney at Law
Possible extension to scope of Vifo Act
On 19 December 2024, Dutch Minister of Economic Affairs Beljaarts officially announced his intention to extend the scope of the Act on Security Screening of Investments, Mergers and Acquisitions (the “Vifo Act“), requiring that the Vifo Act be amended.
Background
The Vifo Act was introduced to give the Dutch government more control over mergers and acquisitions by – foreign – parties that could potentially affect the national security of the Netherlands. This means that, in certain – sensitive – sectors, a buyer must pre-notify the Investment Review Office (“BTI“) of their intention to acquire or merge with a company. Any transaction may only be executed/completed once the BTI has assessed that there are no national security risks or that any risks are covered by control measures (the standstill obligation).
Current scope
Under the current Vifo Act, a transaction must be reported to the BTI if the target company operates in one of the following sectors (or is specifically designated in the Vifo Act):
Heat transport, nuclear power, Schiphol airport, port of Rotterdam, banking sector, financial market infrastructure, extractable energy or gas storage;
Sensitive (or highly sensitive) technology (dual-use products, military goods, quantum technology, photonics technology, semiconductor technology and high assurance products); or
Corporate campus operators.
This covers a broad list of the largest and most important companies based in the Netherlands, including Schiphol and the port of Rotterdam, but also ASML and nuclear power plant Borssele.
Extension to the scope
In essence, the legislator wants to extend the scope of the Vifo Act to include more technological sectors. The bill, which is still under consultation, will add biotechnology, AI, advanced materials and nanotechnology, sensor and navigation technology and nuclear technology for medical uses to the scope of the Vifo Act. An example of nuclear technology for medical uses is the nuclear reactor in Petten. This reactor produces isotopes for medical use for a large proportion of cancer patients worldwide. Under the new proposal, the sale of this reactor would also require screening by the BTI. This change in the law could possibly take effect from as early as 1 July 2025.
Any questions?
If you have any questions on this topic or your company needs support with a Vifo Act-related notification to the BTI, then please contact Arnout Koeman or one of our other specialists.
Moving forward together
We are La Gro. Attorneys at law since 1902, formerly known as La Gro Geelkerken Lawyers. As an independent full-service law firm, we make a lasting contribution to our clients’ success.
Our services go beyond winning cases and resolving disputes. We act as a strategic partner for our clients and happily take responsibility for integrating all legal aspects and processes.