Are your employment contracts already up to date? As of August 1, 2022, the Act Implementing the EU Directive on Transparent and Predictable Terms of Employment. will come into effect. This law stems from a European directive and this directive must be implemented in Dutch law by 1 August 2022. What does this bill mean for practice?
The purpose of the Directive.
The European Directive aims to improve employment conditions by making them more transparent and predictable and by providing employees with more security. Employees must be informed in time and in writing, but above all fully, about their essential terms of employment. That means knowing in time when to work and when not to work, clarity on training costs and other terms of employment and sufficient security. The directive applies to employees. What is special is that the directive explicitly refers to new forms of work that contribute to innovation and growth in employment and the labor market. In particular with a view to these new forms of work, such as platform work and flexible contracts, minimum requirements are now set for working conditions.
Content of the Directive.
The Directive stipulates that employers must comply with a proper information obligation, a maximum probationary period is determined and there are new rules regarding secondary work, training and the on-call contract. There are therefore a number of rules that will have an impact, especially on your new employment contracts as of 1 August 2022, which may need to be amended on some points.
Main Changes to Dutch Law.
There are basically four main topics that will cause changes in the Netherlands when the Directive is implemented:
The side work clause will be restricted;
The employer’s training obligation will be expanded and an employer may no longer agree to study costs in all cases;
Employees with on-call contracts must be given more security.
Rules on dismissal must be made clear by the employer
From 1 August next, the employment contract of an on-call worker must specify the days or periods during which an employee may be called up. These are the reference days and hours. During those reference hours, an employee may be required to comply with the call. If no reference hours have been recorded or only very briefly, then there is no such obligation. If the employee refuses a call in such a case, according to the new legal text, no negative consequences may be attached to this for the employee.
In addition, after the amendment of the law, an employee who has been employed for more than 26 weeks may request to be given a form of employment with more predictable and secure working conditions (a fixed scope of hours). This right to adjust the employment contract already exists in the current labor law. However, the new legislation requires the employer to respond to this request in writing and with reasons within one month. A longer response period of three months applies to smaller employers.
Extension of the employer’s information obligation.
The information obligation of employers is extended. I give below a bird’s eye view of how the information obligation currently stands and how it will be after 1 August 2022. At present, as an employer you are already obliged to notify your employee (in writing) of the essential terms and conditions of employment. This list of employment conditions is enumerated in the law. This shows, for example, that you must inform the employee about the job description, the nature of the contract and the salary. If the bill is passed, you will have to inform new employees about more things as of August 1, 2022. For example, about: the dismissal policy, training policy and work and rest times.
A shorter deadline.
Currently, you must inform your employee within one month of entering into employment. For some information, this period is reduced to one week at the latest.
What information must you provide as an employer?
Below is what information you must provide to your employee as of August 1, 2022.
Deadline of one week.
The following information must soon be provided no later than one week after commencement. You already have to provide this information at the moment, but now a period of one month applies:
The name and residence of your employee and your company.
Indicate the location(s) where the work will be performed. Is this not (mainly) at a fixed location? If so, tell your employee that he works in different places and/or is free to determine his own workplace.
The function of the employee or the nature of his work.
The time of commencement of employment.
Is it a fixed-term contract? Then also inform the employee about the end date or the duration of the contract;
You must inform the employee about the wages he will receive. This includes: the starting amount, its separate components, the method of payment, and the frequency of payment.
Does the wage depend on the outcomes of the work to be performed? If so, also state the amount of labor to be offered per day or per week, the price per item, and the time reasonably required to perform it.
Notice. It has been changed that – if there is one – the other wage components must be stated separately. These include contributions in cash or kind, overtime payments, bonuses and other entitlements that the employee receives directly or indirectly on the basis of his work.
Work and rest periods.
The provision on work and rest times has been expanded considerably. You will soon have to provide your employee with much more information on this subject. In the event of a (largely) predictable work pattern, you must inform the employee about the duration of a normal working day and/or work. You must also provide information about overtime arrangements and the compensation paid in return. Does your company work with a changing schedule or changing shifts? If so, this does not affect the predictability of the work. However, you must then inform the employee about the arrangements for changing shifts.
You will soon also have to inform the employee about the duration and conditions of this period. This obligation is new. It means that the criteria by which the employee’s performance is assessed will have to be spelled out.
For the following data, the deadline remains one month:
Whether the employee will participate in a pension plan.
Does a collective bargaining agreement apply? If so, you must indicate which CAO applies (or regulation by or on behalf of a competent administrative body). Do you hire staff? Or do you use a payroll construction? If so, you must also inform these employees of any applicable collective labor agreement.
Indicate whether the employment contract you have entered into is regarded as a temporary employment contract or a payroll contract by law.
Whether the employment contract was entered into for an indefinite period;
Whether there is an on-call contract as referred to in Section 7:628a (9) and (10) of the Dutch Civil Code.
Vacations and other paid leave
You must already inform the employee of his vacation days. New is the obligation to inform him also about his possible entitlement to other forms of leave. Is the number of days of vacation and leave not fixed in advance? Then you must inform the employee about the way in which these entitlements are calculated.
You must inform your employee about the procedure (including requirements and notice periods) that both employer and employee must follow when terminating the employment contract. Can the length of the notice periods not be indicated at the time the information is provided? If so, you must tell how those notice periods are determined. Notice. What is new, therefore, is that you will soon also have to tell your employee within what period he must appeal against a possible dismissal.
Insofar as you are responsible for this, you must inform your employee of the identity of the social security institutions that receive the social contributions in the context of the employment relationship. In addition, you must indicate what protection you provide in terms of social security. This obligation is new.
How should the information be provided?
You must provide the information in writing or electronically. In doing so, take into account the following points of attention:
An employer may also refer in the employment contract to the applicable articles of law or collective agreement. For example, employers do not have to include full details of grounds for dismissal and prohibitions on termination in the employment contract; a reference to the law or collective agreement will suffice. However, referring to a website, such as rijksoverheid.nl, is not sufficient. A separate statement of the terms and conditions of employment may be omitted for information that is already provided in the employment contract (or CAO). For information that is (also) contained in the CAO, a reference to it is sufficient. Procedures and (other) information that is not contained in the employment contract or CAO can be included in personnel handbooks. Do you want to provide (part of) the information electronically? Then take into account that the employee must be able to print out the information. In addition, make sure that you, as the employer, have proof of transfer or receipt. This proof does not have to contain the information that was provided.
Has anything changed in the conditions? Then you must inform your employee as soon as possible, but no later than the day on which the change takes effect. However, does it concern a change to a statutory provision, a collective bargaining agreement or a scheme by or on behalf of a competent administrative authority? Then a reference to it is sufficient.
What about the obligation to inform existing employees?
The new rules will apply as of August 1, 2022. The proposed legislative amendment mainly concerns an adjustment of the employment contract for new employees. Existing employment contracts therefore do not need to be amended. As an employer, you do not have to add all the information that is not yet included in the employment contract. Existing employees may request missing information. In that case you must respond within one month.
Hommersom Lawyers will be happy to assist you in updating your employment contracts/regulations with the coming changes in the law. You can contact Frits Hommersom by phone or e-mail.