Employment law

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.

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.

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.

Introduction  All over Europe, people perform work through digital work platforms. In the European Union, it is estimated that there will be about 43 million platform workers in 2025. Through a platform, services are offered through an application or website. These services are performed by working people (platform workers). In 2022 there were 28 million platform workers which means there has been a significant growth in this market. When platforms operate in different member states or across borders, it is often unclear by whom the platform work is performed, especially when it comes to online platform work.  To bring more clarity, the European Platform Work Directive was published on Oct. 2, 2024. The European Union wanted to provide minimum rights for platform workers and rules for better protection of the personal data of individuals who perform platform work. With this directive, the European Union also wants to improve the transparency of platform work, including in cross-border situations.   Privacy Aspects Directive Platform Work  Digital work platforms use algorithms such as computerized monitoring systems and automated decision-making systems, for tasks that were previously generally performed by managers. These include, for example, assigning tasks, pricing individual jobs, determining working hours, giving instructions, evaluating work performed, stimulating incentives or applying adverse treatment. The algorithms have a great impact on the worker, while the worker often does not have access to information about how the algorithms work, what personal data are used, or how their behaviour affects the decisions made by the systems. The Platform Work Directive therefore sets rules regarding the use of algorithms by digital work platforms.  Platforms will first have to provide clear information on the use of automated systems and how these systems work. In addition, the directive sets limits on the type of data that may be processed by automated systems: no personal data on emotional or psychological state, no data relating to private conversations, no data to predict (possible) union activity, no data to infer racial or ethnic origin, migration status, political opinions, religious beliefs or health status, and no biometric data. Finally, human oversight of automated systems will be mandatory.  Employment law aspects Platform Work Directive  Pseudo self-employment Currently, most platform workers are formally self-employed. As recent case law shows, they may in fact have an employment relationship and therefore should enjoy the employment rights and social protection afforded to workers under national and EU law. Read our blog on pseudo self-employment here. However, Member States approach platform work differently.   Legal presumption for employees One of the goals of the Platform Work Directive is to make it easier to correctly determine the employment status of platform workers. Article 5 of the Platform Work Directive therefore includes a legal presumption. A platform worker is presumed to be an employee when there are actual indications of “control and direction”. In such a situation, a worker can suffice with the assertion that he is in fact an employee. The platform must disprove this assertion, which means that it is up to the platform to prove that there is no employment relationship.  Safety and health of platform workers The Platform Work Directive also stipulates that Platforms must take the necessary measures to guarantee the safety and health of platform workers. This may include taking measures to combat violence and (sexual) harassment. Furthermore, Article 17 introduces an obligation to report so that Platforms are registered by formal authorities. For example, the platform will report the number of people that perform platform work, the applicable general conditions, the income level and the average duration of the deployment.  Implications for practice  Platform work will from now on be regulated by European legislation. Member States have two years to implement the Directive. At this time there is no concrete legislative proposal. When developments occur within the framework of this Directive, we will inform you.  It is wise for platforms to look ahead and prepare for these future rules. As a result of implementation of the Directive, platform workers may be classified as employees sooner. In addition, platforms may need to adjust their processes regarding the use of algorithms and automated systems.   Contact  Do you have questions about protecting personal data in the context of platform employment? Or do you have questions about the employment law aspects of platform work? Please contact Frederiek Beuning or a colleague from the Data & Privacy Team or Rose Horstman or a colleague from the Labor Law Team. They will be happy to help you further!  Find the Platform Work Directive here.

Heads-up: there has been an update on this subject. The Dutch Tax authority has taken mitigating measures, softening the blow from enforcement in 2025. As of January 1, 2025, the Dutch tax authority will fully enforce on pseudo self-employment. For every client who works with freelancers and where the freelancer can actually be considered an employee, this enforcement on false self-employment can have major legal and tax consequences. What is pseudo self-employment? Pseudo self-employment means that a contractor is formally regarded as self-employed, but in practice works under circumstances that are more similar to an employment contract. This can be the case, for example, if the contractor works side-by-side with your own employees and has little control over his prices, working hours and the way he should perform the work. With pseudo self-employment, actual independence is often lacking, such as own investments, own acquisition, multiple clients or bearing (financial) entrepreneurial risk. This can lead to disguised employment, where the employment relationship meets the legal characteristics of an employment contract. Risks in pseudo self-employment The tax authorities play an important role in the assessment of pseudo self-employment. They look  whether the criteria for an employment contract are actually met, namely authority, personal work and a (fixed) payment. The agreements you have made with the self-employed person, for example that no employment is intended, are therefore not decisive. If false self-employment is established, the tax authority can hold both the client and the self-employed person liable. This often leads to retroactive levies of payroll tax and social security contributions, as well as possible fines. In addition, the self-employed can successfully claim the rights of an employee, such as dismissal protection and continued payment of wages during illness. For clients, the financial and legal consequences are significant, which emphasizes the importance of carefully assessing the employment relationship. “VBAR” Act The case law surrounding pseudo self-employment has been evolving in recent years. More test criteria are determined and more and more often conclusions are drawn that there is an employment contract, regardless of contracts to the contrary. These developments have led to the legislative bill Verduidelijking Beoordeling Arbeidsrelaties en Rechtsvermoeden (VBAR), which will (possibly) take effect on January first, 2026. Practical consequences Although the VBAR Act is not yet in place, the tax authority is drawing its own plan. As of January first, 2025 the Dutch tax authority will fully enforce on pseudo self-employment. This means that all organizations (companies, but also governments and health care institutions) that employ self-employed workers for work that should actually be done as employees, can expect fines and additional taxes up to a maximum of 5 years back. Relevant to note is that the lifting of the enforcement moratorium has no retroactive effect. The tax authorities will not check for employment relationships that were not properly qualified before January first, 2025 (barring malicious situations). Furthermore, there will be a transition period of one year during which clients will not yet be fined if they demonstrate that they are taking measures against false self-employment. Think for example of processes aimed at reducing the number of abusive self-employed relationships or converting these self-employed relationships into employment. Advice: check your pseudo self-employed As a result of the lifting of the enforcement moratorium, as of January 1 2025, you will be at immediate risk if assignment relationships with self-employed persons in practice contain characteristics of an employment relationship. It is therefore important to take action now and take stock of your collaborations with self-employed persons and adjust them where necessary and possible. We would like to give you a step-by-step plan to check the collaborations and take measures: 1) Make an inventory of all people working for your organization on the basis of a contract of assignment, including positions (core, staff or “company alien”), nature, scope and duration of the assignment and rate agreements; 2) Assess for each self-employed person what contractual arrangements have been made, whether they are being followed, and to what extent the self-employed person is integrated into your organization; 3) Assess the degree of entrepreneurship of the self-employed person, such as what financial risks does he run when performing the assignment and does he work for multiple clients; 4) Act on conclusions, engage with your freelancers and maintain the relationship as self-employed, hire through an agency or reform to employee; 5) Adjust your contracts. You can use current model agreements from the tax authority for now, but be aware that these model agreements are limited in content. Crucial topics such as liability, specifically if it is judged that there is a disguised employment relationship, are missing in them. In view of the new legislation, it is also better not to conclude assignment agreements with self-employed persons for an indefinite period of time. Would you like to know more about the upcoming enforcement by the tax authorities? Expertise in 18 legal fields enables La Gro to offer broad legal assistance. Feel free to contact Angela van der Does-Mekes en Gerard Zuidgeest or one of our other specialist colleagues.