The new Work and Security Act (WWZ) will bring major changes to employment law next year. The law on dismissal will also undergo changes. It concerns the method of dismissal through notice, dissolution and mutual agreement, (the amount of) the transitional compensation, changes to the chain regulation and notice period, and competition clause, probationary period in fixed-term employment contracts and a regretful optants arrangement. Here are the key points and the consequences for the employer.
As of January 1, 2015:
Important is the change that the employer must inform the employee with a fixed-term employment contract
It is important that the employer has to inform the employee with a fixed-term contract in writing no later than 1 month before the expiration of the employment contract about his intention with regard to the employment contract: to continue or not and if so, under what conditions. If the employer does not do this, he owes compensation equal to one month’s salary. The obligation does not apply to contracts shorter than 6 months and to contracts that do not end on a calendar date (replacement due to illness/pregnancy).
Non-competition clause and probationary period in fixed-term employment contracts.
Fixed-term contracts of up to 6 months may no longer include a probationary period, which also applies to a consecutive contract. Probationary period is only permitted for contracts longer than 6 months. Non-competition clause in a fixed-term employment contract is also no longer allowed, except when there are weighty business and service interests.
As of 1 July 2015:
Amendment of chain rule.
As of July 1, 2015, only 3 temporary contracts may be agreed upon within 24 months, which is now 36 months, and the “break through period” between successive employment contracts is extended from 3 to 6 months.
As of July 1, 2015, the employer can validly terminate if the employee consents in writing. This consent does not have to be requested. Upon consent, the employment contract ends. However, the employee can withdraw his consent during 14 days and the employer must inform the employee of this right. If the employee refuses
then the grounds for dismissal (see below) determine the further procedure.
The employer is no longer free to choose between the UWV or the subdistrict court procedure, but the UWV procedure applies in the event of economic dismissal and long-term occupational disability, and the dissolution procedure in all other cases. If termination takes place with the approval of the UWV, the employee may request equitable compensation or restoration of the employment contract. Without his consent or permission of the UWV, the employee can only annul the termination through a judicial procedure.
Dissolution can only be requested on personal grounds: culpable actions, failure to perform, disturbed working relationship, refusal to work due to conscientious objection or regular illness with unacceptable consequences for the business.
Currently, in the event of dissolution according to the “subdistrict court formula”, compensation is granted (on average 1 month per year of service). This will be abolished. Instead, every employee who has been employed for at least 24 months and is involuntarily dismissed will receive a transitional allowance. This right is, as it were, automatically accrued by the employee. Only in cases of serious culpability on the part of the employee or termination of the contract of employment due to reaching the state pension age, the transitional compensation is not an issue.
Level of transitional compensation.
The amount consists of 1/6 month salary per half year of service in case of employment up to 10 years, and from 10 years a quarter of a month salary per half year of service. The maximum compensation is 75,000.00 or one year’s salary (if higher than the aforementioned maximum amount). Additional equitable compensation can be awarded if the employer is seriously culpable.
For now: beware and at least have your employment contracts adjusted and brought in line with the new legislation!