Netherlands: Summary of Recent Employment Law Developments
In the past month, there have been several labour and employment law developments, chief among them: i) normative regulation to achieve CO2-reduction in work-related mobility; ii) nine weeks partly paid parental leave; and iii) additional COVID-19 measures were announced.
I. Normative Regulation to Achieve CO2-Reduction in Work-Related Mobility
The (draft) ‘Normative Regulation on Work-Related Passenger Mobility’ (in Dutch: Normerende regeling werkgebonden personenmobiliteit) applies to employers with 100 or more employees and contributes to making work-related person mobility sustainable, as agreed in the Climate Agreement 2019. Since more than half of the traffic is work-related, the government believes employers can play a major role in reducing the negative effects of work-related mobility on the climate. The draft regulation was planned to enter into force on 1 January 2022, but has been postponed until further decision-making by the next government. The draft regulation applies to employers with 100 or more employees and aims to achieve CO2-reduction on work-related person mobility. Under this regulation, the employer is responsible for work-related mobility, consisting of i) home-work mobility and ii) business mobility (trips the employee is required to make in order to perform his duties).
In order to achieve CO2-reduction on work-related mobility, employers are required to report annually on both business and home-work mobility. The purpose of the annual reporting is, among other things, to determine whether the CO2-norm is being met and to collect (more) data on CO2 emissions. A digital reporting system, including an online tool to calculate CO2 emissions, is expected to become available on 1 January 2023.
As of 1 January 2026, the total CO2 emissions from business kilometres travelled per employer may not exceed the average emissions per business kilometre for that year: 96 grams per kilometre (g/km). The norm for business mobility will apply for four years and will then be assessed. Employers who do not yet meet the norm, therefore have until 1 January 2026 to comply. The draft regulation provides some suggestions on how employers can achieve the norm, but emphasises that employers have complete freedom of choice as to the measures to be taken:
- Reduce work-related mobility by encouraging virtual appointments;
- Changing the usual mode of transport to, for example, electric bicycles or public transport;
- Making the company’s lease construction more sustainable/greener;
- Offering an adjusted travel allowance for cleaner cars.
The draft regulation does not yet include a norm for home-work mobility, as there is currently too little data available for this. Therefore, until 1 January 2026, data will be collected via annual reporting to gain insight into the patterns of CO2 emissions from home-work mobility. In addition, it looks at the extent to which an employer is able to influence the CO2 emissions of home-work mobility. This mobility partly takes place in the private sphere of the employee and the employer has no insight into this.
Supervision and enforcement of the regulation will be the responsibility of the municipalities and provinces. After each four-year period, employers will be assessed to see whether they meet the applicable norm. If the annual reporting obligation or the norm is not met or not met on time, a penalty may be imposed.
Key Action Points for Human Resources and In-house Counsel
According to the draft regulation, there is no immediate need for employers to take action. After the regulation enters into force, the most important obligations for an employer are to complete the annual report and to comply with the norm for business mobility as of 1 January 2026.
The regulation was initially planned to enter into force on 1 January 2022, but the final decision is left to the next government. It is therefore possible that the scheme will be adjusted in the future. We will of course keep you informed of developments.
II. Nine Weeks Partly Paid Parental Leave
On 12 October 2021, the Dutch Senate (in Dutch: Eerste Kamer) introduced the Paid Parental Leave Act. The Paid Parental Leave Act entitles every parent to nine weeks of partially paid parental leave and 17 weeks of unpaid parental leave. Parents can currently only take 26 weeks of unpaid parental leave. The Act will enter into force on 2 August 2022. The Paid Parental Leave Act amends the Work and Care Act and the Flexible Work Act, which sets out the rules for parental leave. With this Act, the government wants to give parents more time to get used to the new family situation and, as a result, make conscious choices about the division of work and care.
Paid Parental Leave Act
Currently, (both) parents are entitled to 26 weeks of unpaid parental leave in the first eight years of the child’s life. As of 2 August 2022, parents are entitled to 9 weeks of partly paid parental leave and 17 weeks of unpaid parental leave.
The first 9 weeks of parental leave are (partly) paid if taken in the first year of the child’s life. Parental leave not taken in the first year can be added to the 17 weeks of unpaid parental leave, which can be taken in the child’s first eight years of life. In the case of adoptive or foster parenthood, paid parental leave can be taken in the first year after the child’s inclusion in the family, as long as the child is under the age of eight. The partially paid parental leave is in addition to the 16 weeks of pregnancy- and maternity leave for the mother and the six weeks of post-birth leave for the partner.
During the 9 weeks of parental leave, parents are entitled to a UWV (Dutch Employee Insurance Agency) allowance equal to 50% of their daily wage (to a maximum of 50% of the maximum daily wage). The employer has to apply for the benefit at the UWV. The payment of the benefit relates to parental leave already taken at the time of the application. During the discussion in the Dutch Senate, a motion was submitted to increase the wage percentage to 70%. It is up to the next cabinet to decide on this.
Children born before 2 August 2022
Parents who have had a child before 2 August 2022 are also entitled to 9 weeks paid parental leave. Conditions are that they have not yet taken the full parental leave (the 26 weeks) and the child is younger than one year, or – in case of adoptive or foster parenthood – when less than a year has passed since the child was adopted into the family.
Example: The employee has a 6-month-old child on 2 August 2022. He or she has meanwhile taken 20 weeks of (unpaid) parental leave. From 2 August 2022, the employee is entitled to take 6 weeks paid parental leave for the next 6 months – until the child is 1 year old.
III. Supplementary COVID-19 Measures Introduced
NOW 5 and final calculation NOW
On 26 November 2021, additional corona measures were announced. The NOW scheme is therefore reopened with NOW 5. NOW 5 covers the period 1 November to 31 December 2021. Almost the same conditions apply to NOW 5 as to NOW 4: there must be a minimum of 20% loss of sales, a maximum of 80% loss of sales can be claimed and employers have a best-effort obligation to accompany employees in a ‘from-work-to-work’ trajectory in the event of dismissal. Businesses that have previously received an advance payment from the NOW should apply for a final calculation for each NOW period (for the NOW-2 this is no later than 31 March 2022). On the basis of the definitive calculation the UWV will determine whether a part of the NOW must be repaid.
Return to the Reduced Working Hours Scheme
The Werktijdverkorting (WTV) scheme was suspended due to the introduction of the NOW. From 1 October 2021 employers can again make use of the WTV. The WTV offers support to employers in case, for at least 2 calendar weeks and at most 24 calendar weeks, at least 20% of the working capacity cannot or will not be used due to a reduction in activity caused by extraordinary circumstances that do not form part of the normal business risk. The normal business risk includes corona-related circumstances. Also during NOW 5 employers can make use of the WTV. If an employer has applied for WTV for reasons other than corona, the WTV benefit received does count as turnover for NOW.
End of increased free margin
For 2020 and 2021 the free margin (in Dutch: vrije ruimte) has been increased as a crisis measure during corona. This means the employer may give tax-free allowances through the Work and Income Tax Scheme, 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.
New legislation pending: Act on Temporary Extension use of Corona Access Cards on the work floor
On 22 November 2021, the new “Act on the temporary extension use of corona access cards” (hereinafter referred to as the Act) was submitted to the Dutch parliament. The Act will make it possible for employers to demand the corona access cards (based on 3G system) from its employees in certain cases on the work floor, if this is necessary to reduce the transmission of the coronavirus. It remains to be seen whether and when the Dutch parliament will (fully) approve this Act.
Key Action Points for Human Resources and In-house Counsel
Consequences of not showing a corona access card: Based on this Act, if an employee refuses to show the corona access card, it can result in the employer denying the employee access to the workplace. The employer and employee must then together find a suitable solution based on good employer and employee practices, for example allowing the employee to temporarily work at an alternative location and/or to accept other work. If the employee refuses to cooperate and to follow reasonable instructions from the employer, under specific circumstances, there might be a reasonable ground for dismissal.