Netherlands: Summary of Recent Employment Law Developments

1. Act on a more balanced men-woman ratio

On 28 September 2021, the Dutch Senate has passed the legislative proposal on a more balanced men-woman ratio on management and supervisory boards, which is expected to enter into force on 1 January 2022. The legislative proposal contains an diversity quota for supervisory boards of listed companies and a target scheme for large companies. In this blog, we will discuss the measures that the legislative proposal introduces.

The legislative proposal aims to improve the balance between the number of men and women in the top of large companies. In general, the legislative proposal contains the following three measures.

• Diversity quota for listed companies

The legislative proposal introduces an ingrowth quota for supervisory boards of listed companies (with a listing on Euronext Amsterdam). The composition of a supervisory board is considered balanced, if it  consist of at least one third men and one third women.

As long as the composition of the supervisory board is not balanced, no supervisory board member may be appointed,  if the person does not contribute to a balanced composition. An appointment that does not contribute to a balanced composition is null and void. However, a null and void appointment resolution does not affect the validity of resolutions taken by the null and void appointed supervisory board member.

The diversity quota does not apply in the case of i) a reappointment within eight years after the year of the first appointment and in the case of ii) appointments in the event of exceptional circumstances. These are circumstances in which deviation is necessary to serve the long-term interests and sustainability of the company or to ensure its viability and temporary appointments by the Enterprise Court in the context of an inquiry procedure.

• Target schemes

The legislative proposal also introduces an obligation for large companies to set appropriate and ambitious objectives, in the form of a target scheme, to improve the gender balance in the management board, the supervisory board and the sub-top of the company (to be determined). The target scheme depends on the size of the management board, the supervisory board and the sub-top.

Large companies will also be required to draw up concrete plans for achieving the targets set. Examples are a transparent recruitment and selection process or the drawing up and amendment of a profile.

An company (in the Netherlands: NV of BV) qualifies as a large company if two of the following three requirements are met: i) a balance sheet total exceeding EUR 20 million, ii) net turnover exceeding EUR 40 million and iii) an average number of employees of 250 or more over the financial year.

• Reporting obligations

The legislative proposal obliges large companies to report within ten months after the end of the financial year to the Social and Economic Council (hereafter: SER) on the progress and composition of the company. A supporting infrastructure will be developed by the SER to support companies in setting up and implementing the plans. This will serve as a monitoring system where companies report on their progress.

Exceptions for group companies

If the holding company sets targets, makes plans and reports for its group companies, the subsidiary companies are exempt. The legislative proposal gives the group companies the choice to act separately or as a group.

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2. Act on paid parental leave

The Dutch Senate has passed the Act on paid parental leave. This act provides for parents to be able to take part-paid parental leave upon the birth of their child. The introduction of paid parental leave is a step towards more equality between men and women, but also towards a better work-life balance.

Currently, the Netherlands already have 26 weeks of unpaid parental leave per parent in the first eight years of the child’s life. With this proposal, both parents will be partially paid for 9 of these weeks in the child’s first year of life. These weeks are in addition to 16 weeks maternity leave for the mother and 6 weeks birth leave for the partner. The Act on paid parental leave will enter into force on 2 August 2022.

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3. COVID-19 updates in the Netherlands

• The support measures for businesses, including the NOW, were discontinued with effect from 1 October 2021. Businesses that received an advance payment from the NOW must apply for a final determination of the NOW at a later date (for the NOW 1, this is no later than 31 October 2021).
• For 2020 and 2021, the free allowance has been increased as a crisis measure during corona. The employer is allowed to give tax-free reimbursements for work-related costs, as long as the total amount remains under 3% of the first € 400,000 of the wage bill of all employees combined. As of 2022, a percentage of 1.7% instead of 3% will apply to the first € 400,000 of the wage bill.
• On 1 October 2021, the (outgoing) Dutch Minister of Social affairs explicitly stated that a corona access card is currently not possible (legally speaking) in the work environment. However, an investigation has been launched into the possibilities of such corona access card in the workplace, in which case an amendment of the law will be necessary. The aim is to complete this study by the beginning of November 2021. In summary, the Minister states the following:
  • Vaccination is and remains voluntary.
  • An employer may not force an employee to be vaccinated. Employers may, however, make a moral appeal to their employees.
  • An employer may ask about the vaccination status of an employee, provided there is a ‘good reason’ for doing so. However, an employee is not obliged to answer. A good reason exists if, for example, there are no alternatives to create a healthy and safe environment. If an employee does not answer, the employer may agree with the employee to work at home or to wear protective equipment.
  • Employers are currently not permitted to demand a corona access certificate from employees, not even from employees in sectors where visitors are required to show such a certificate.