Bill on the Difference Between Self-Employment and Employment Contract and Whistleblower Protection Act
Last Friday, October 8, the Bill for Clarification of Assessment of Employment Relations and Legal Presumptions entered internet consultation. This bill is intended to make it easier to assess whether someone works as a self-employed person or under an employment contract. How the plans look is outlined below.
Additionally, (larger) employers must be ready by December 17, 2023, to implement the obligations from the Whistleblower Protection Act. But what are these obligations?
Bill for Clarification of Assessment of Employment Relations and Legal Presumptions
Currently, the legal standard for distinguishing self-employed persons from employees is an open standard that has been further clarified by judicial decisions (case law). The bill aims to make the rules clearer, particularly the statutory ‘authority criterion’ (working in service of). To achieve this, case law has been collected, structured, and summarized based on three main elements, according to the minister:
- Work-related Subordination: This examines the nature of the tasks and the degree of control the employer has over their execution.
- Organizational Integration: This looks at the extent to which the work is part of the organization.
- Working for Own Account and Risk: This examines the extent to which there is entrepreneurship, i.e., who bears the costs and risks of the work.
These main elements will be further developed through additional criteria (so-called indications) in a general administrative order.
The primary goal of this law is to provide more clarity for employees, employers, clients, implementing organizations (such as UWV, the Tax Authority, and the Dutch Labor Inspectorate), and the judiciary. But whether this will succeed is questionable. At first glance, the criteria still leave much room for interpretation. According to the umbrella organization of self-employed organizations, the law ‘far exceeds’ its goal. They indicate in a response that the bill provides no additional clarity in advance and directly affects the right to exist of independent entrepreneurs.
Legal Presumption Based on Hourly Rate
The bill also introduces a civil law presumption regarding hourly rates. Specifically, this means that if a self-employed person’s hourly rate is lower than €32.24 (reference date July 1, 2023), it is presumed that an employment contract exists. In such cases, it is up to the employer to prove that there is no employment contract.
This proposed threshold essentially serves as a safeguard to ensure that workers are not undervalued or exploited, while simultaneously helping to make a clear distinction between traditional employment and freelancing, according to Minister Van Gennip.
Internet Consultation
The bill is currently in the internet consultation phase. Internet consultation is a phase in the legislative process where citizens, businesses, and organizations can provide their opinions online on proposed legislation and regulations. It enables the government to collect a wide range of perspectives and feedback before a bill is finalized and submitted to the House of Representatives.
You can read more or provide feedback on the bill via this link.
Whistleblower Protection Act
On February 18 of this year, the Whistleblower Protection Act came into effect. This law replaces the old House for Whistleblowers Act. In the message below, we will briefly explain what a whistleblower is and highlight several important legislative changes.
What is a whistleblower?
A whistleblower is someone who reports a (suspicion of a) misconduct within an organization. This does not involve individual complaints, but structural problems. Think of matters such as money laundering, the dangerous storage of certain toxic substances that endanger people, animals, or the environment, or structural boundary-crossing behavior by a supervisor. The Whistleblower Protection Act aims to protect the reporters.
Internal Reporting Procedure
It was already mandatory for employers with 50 or more active employees to have an internal reporting procedure for such reports. With the new law, stricter requirements have been introduced for this internal reporting procedure. For example, the internal reporting procedure must specify who can make a report, what misconduct can be reported, to whom reports can be made, and what protection a reporter receives. The law also provides several deadlines for handling the report. These deadlines must also be included in the internal reporting procedure.
Additionally, the protection group of reporters has been further expanded, and the internal reporting procedure may no longer require that a reporter first report internally before making the report externally (for example, to the House for Whistleblowers). If an employer who falls under this obligation does not comply with the requirements of the new law by December 17, 2023, then any interested employee may request the court to compel the employer to do so.
More Protection for Reporters
Reporters have received more protection. Under the old law, they were not allowed to be disadvantaged, but they had to prove themselves that they were, for example, dismissed, suspended, or harassed because of their report. From February 18, 2023, it is not the reporter who must prove that he or she is being disadvantaged, but the employer must prove that there is no disadvantage. This increases the chances of success for a disadvantage complaint.
Want to know more about this legislative change? For a comprehensive and clear overview of all important changes, you can email info@wesselvanderlans.nl and receive our (free) fact sheet on this topic.
What does the court rule?
Is the sick employee really sick?
If the employer suspects that an employee is providing incorrect information about their illness, it can be tempting as an employer to immediately draw conclusions and take measures. But caution is advised, as shown in a recent ruling by the district court of Rotterdam.
This case centered on a female employee of the company PieterPot, which sells groceries in deposit jars to customers. The employee had been working at this company since March 2020 and had previously reported sick with serious neck complaints. A company doctor and neurologist had confirmed these complaints. But at some point, doubts arose at PieterPot about the severity of the complaints. PieterPot had therefore commissioned a corporate investigation agency to follow this employee. The report from this agency showed, among other things, that the employee had made ‘sideways headbang movements’ at a dance festival on February 11, 2023 (10 days after she had indicated that the complaints had increased) and had danced for 6 to 8 hours at that festival. She was also seen carrying a filled garbage bag down 5 flights of stairs. Based on the findings from this report and a conversation about it with the employee, PieterPot decided to dismiss the employee on the spot. PieterPot accused the employee of lying to the company doctor about her complaints.
The employee disagreed with this and went to the district court. The district court subsequently ruled that monitoring an employee without their knowledge through an investigation agency is only acceptable under very special circumstances and only when there are concrete and serious suspicions. However, PieterPot had based her suspicions on a ‘gut feeling’. The district court therefore found that directly engaging the investigation agency was disproportionate and constituted a serious violation of the personal privacy of the employee concerned. Additionally, the district court found that PieterPot could not conclude from this report that the employee had lied about her complaints. To verify this, PieterPot should have contacted the company doctor for a medical opinion, but this had not happened. Moreover, PieterPot could have chosen to suspend wages instead of immediate dismissal, the court found.
Since the immediate dismissal is not valid, the employee is entitled to fair compensation. She requested an amount of €55,000 gross. The court awarded lower fair compensation, partly in view of the employee’s good prospects in the labor market. But because the district court held it against PieterPot that they had prematurely engaged an investigation agency, fair compensation of €20,000 gross was still awarded. Additionally, the employee is entitled to back pay, a transition allowance, and fixed damages. In total, PieterPot had to pay €36,000 gross.
Conclusion
This ruling shows that directly engaging a corporate investigation agency upon suspicion of an employee violation is far too severe. As an employer, you have other less severe options that you must use first. If you still immediately engage corporate investigation, there is a possibility that the court will hold this against you. Furthermore, if you as an employer doubt an employee’s illness, this must always be verified with the company doctor. Otherwise, you can, like PieterPot, get your comeuppance.
Navigating Through Reorganizations
Today’s business landscape is constantly changing and companies must be flexible, whether it involves market changes, mergers, acquisitions, or new strategies. A crucial instrument in this regard is reorganization. Reorganizing can be complex. In this article, we discuss the key steps.
Good preparation is half the work
Create a clear reorganization plan with justification for the reorganization. This plan can be used, among other things, for a possible advisory request to the Works Council or consultation with employee representation. Involve them in time, before a final decision is made. Depending on the number of dismissals, there may be collective dismissal and prior notification to UWV and trade unions must be made.
Establish the reference date
The reference date in a reorganization is the specific date on which it is determined which employees are affected by the reorganization. Based on this date, decisions are made about matters such as redundancy, transition allowance, and the application of social plan regulations.
Personnel consequences
Further develop the plan. Review which functions and positions exist in the current and new situation, where requirements for content and level of functions are described. Which functions are being abolished. Are new functions not interchangeable with former functions? Who is eligible for a new function? May you choose yourself based on suitability or should there be (reverse) mirroring? Determine which persons must be dismissed.
Before proceeding to dismissal, you must investigate whether the employee can be redeployed to another suitable position, with or without training. Our tips & tricks for the redeployment investigation can be read here.
Financial consequences
Map out the financial situation and consequences of the reorganization. Create a timeline and compile a script. Allow for a period of 8 to 10 weeks to realize a reorganization. This term is extended by one month if the Works Council gives negative advice.
Social plan
A social plan is not legally required, but does provide support to employees and control over the process for employers. What exactly is included in a Social Plan can vary depending on the specific situation. Think of the procedure followed for forced dismissals, agreements on financial compensation such as severance pay, retraining or outplacement, and rules regarding redeployment.
Implementation and communication
Ensure that documents are ready such as information about the reorganization, invitation to the information meeting and/or for the individual conversation and the settlement agreement. Submit the A-form to UWV in advance to prevent problems with the dismissal prohibition during illness. Then conclude termination agreements. UWV permission may sometimes still be necessary.
Conclusion
Reorganizations are challenging, but these steps help minimize risks. Do you have questions or need guidance with a reorganization? Contact us.
