Netherlands: SER-advisory Report on the Labour Market
In the advisory report of 2 June 2021, the Social and Economic Council (hereafter “SER”) has made recommendations for, among other things, the Dutch labour market; incl. proposals to reduce flexible employment relationships and to make use of the open-ended employment contract more attractive for employers. The report aims to increase the security of work and income, make the economy more flexible and create more equality of opportunity. The main features of the SER-advisory report are as follows:
- Temporary contracts can be entered into a maximum of three times during a three-year period. The interruption period of 6 months will be extinguished. Derogations by CLA (collective labour agreement) are not possible;
- On-call contracts will be replaced by basic contracts in which a minimum number of hours is laid down, at least per three months, due to which the employee’s salary becomes predictable;
- For temporary employment agencies, certification is mandatory and temporary workers are subject to working conditions equal to those of other employees. In addition, the CLA for temporary workers limits flexible working and the maximum duration of the temporary employment clause is limited from one and a half to one year;
- Forms of contracting will be addressed in the Responsible Labour Market Behaviour Code. This code will include rules on outsourcing, allocation of work and other forms of triangular relationships and will pay attention to price and quality of labour, including social policy;
- To promote internal flexibility, the company may reduce working hours (temporarily) for all employees by up to 20% in the event of economic circumstances that would otherwise have led to dismissal. The employer may unilaterally decide to do so if the employee’s salary continues to be paid in full. The employer is insured for 75% of the salary costs for the reduced working hours. The regulation is not at the expense of accumulated unemployment (WW) rights;
- Self-employed persons are obliged to insure themselves against incapacity for work. In addition, a legal presumption of employment arises at a rate below the maximum daily wage (30 to 35 euros per hour). It is up to the employer to prove that the self-employed person is not an employee;
- In the event of dismissal by mutual consent, the parties may choose to end the employment contract, including a “work-to-work route”, in which case the employee is not entitled to the statutory severance payment;
- Sick employees are eligible for a WIA benefit when they are 15% (instead of 35%) incapacitated for work. The calculation of the incapacity is based on real employment opportunities, not on theoretical possibilities.
The advisory report of the SER has not yet been finalised; it will now be submitted to various employers’ associations and trade unions. The agreement may lead to important reforms in Dutch labour law, but this is ultimately up to the legislator to decide.