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Coalition agreement: what employment law implications can employers expect?

On 22 November 2023, elections to the parliament took place in the Netherlands. After several months of negotiations, the intended coalition parties PVV, VVD, NSC and BBB presented their outline agreement on 16 May 2024. The Netherlands is about to get the most right-wing cabinet in its history. What labour law consequences should employers take into account?

More security on the labour market

The coalition parties want more security on the labour market by combating false self-employment. The ‘Bill on the clarification of the assessment of employment relationships and legal presumption’, which we wrote about earlier, will be developed further. Under this draft bill, when employing self-employed workers with an hourly rate of €32.24 gross or less, it will be presumed that the worker is not self-employed but has an employment contract. This means that this worker will have the rights of an employee (for example continued payment during illness, accrual of paid holidays, holiday allowance, an indefinite contract after a number of contracts and protection against dismissal). In addition, the bill contains a clarification of the term ‘relationship of authority’, one of the three elements of an employment relationship. If there is work-related management or organisational embedding and the other criteria of an employment contract are also met, there is a high chance that the relationship qualifies as an employment contract, with all its consequences.

In addition, the coalition will strive towards having more permanent employment contracts. However, there don’t seem to be any concrete plans for that yet.

Regulation of the agency sector

The coalition parties want to regulate the agency sector through an entry requirement. This should also combat exploitation of foreign workers by abusive employment agencies. A bill to this effect has already been drafted and will be discussed further.

Labour migration

The qualification requirements of the Highly Skilled Migrant scheme (HSM visa) will be made stricter. And although the coalition agreement says nothing on the topic, the restrictions that were currently introduced in regards the 30% ruling (tax benefit for employees recruited from abroad) may well be reversed. As for the extraterritorial expenses scheme (ETK scheme), the coalition wants to see whether tax benefits can actually be scaled down. This scheme allows gross wages to be exchanged for untaxed allowances.

In addition, the coalition plans to introduce a compulsory work permit for non-EU migrant workers hired through another EU country, although there are doubts whether this is legally feasible. Furthermore, the coalition intends to make employers of migrant workers responsible for nuisance and costs of migrant workers without regular housing. Moreover, for longer term stay of migrant workers, the employer is to see that they learn the Dutch language.

Limitation of compensation for transition payment after long-term illness

Compensation for employers in case of dismissal due to long-term illness (after the two-year obligation to continue payment of wages has expired) will be limited to small employers. From 1 July 2026, employers with 25 or more employees will no longer be able to apply to the UWV for compensation for paying the statutory transition payment upon dismissal.

Possible extension of employers’ notice period and/or reduction of unemployment benefits

The coalition plans to reform the unemployment (WW) benefits. This still needs to be worked out in more detail, but shortening the WW duration from 24 to 18 months, and/or extending the notice period for employers is being considered. The latter means higher financial burdens for employers in case of dismissal.

Stricter non-compete clause legislation

Earlier, we wrote an article on plans to amend the legislation on the non-competition clause. The main expected changes are a limitation in the duration of the non-competition clause, further requirements on the written justification of the non-competition clause and legal compensation for the employee if the employer invokes the non-competition clause. The coalition agreement says nothing about this bill. However, our expectation is that the bill will be discussed further, to improve labour market mobility and bring Dutch legislation more in line with that in other European countries.

The concrete implementation of the aforementioned plans and their impact on existing labour laws and regulations is still unknown. Like you, we are curious about this. Please keep an eye on our website for an update on the new coalition’s plans and concrete legislative changes. Questions or want to know more? If so, please feel free to contact us at info@bd-advocaten.nl.

Alain Hardy

Published On: 22 May 2024

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