Introduction
Contractual prohibitions
Article 7:653a
Comment


Introduction

"Ancillary activities" are activities that an employee carries out in addition to their job. Currently, these activities are often prohibited, but a new bill may relax existing restrictions for employees.

On 20 June 2019, EU Directive 2019/1152 (the Directive) on transparent and predictable working conditions in the European Union was published. By 11 November 2021, the bill to implement this Directive in the Netherlands was submitted. The bill, which should become statutory law on 1 August 2022, entails some legislative changes and introduces several new provisions. An important amendment to the law concerns ancillary activities, which cannot be competitive in relation to the employer's activities. If they are competitive, a clause in the employment contract that prohibits ancillary activities is not necessary because competing with an employer is contrary to "employeeship".

Contractual prohibitions

In Dutch legal practice, it is common for an employment contract or a personnel scheme to contain a prohibition or restriction on ancillary activities. Collective agreements sometimes also contain such a provision, for example:

  • The employee will notify the employer before accepting a position at other educational institutions or any other work for which the employee receives a salary or other income.
  • The employee will also notify the employer of any change in the nature and scope of such activities.
  • If, in the employer's reasonable opinion, such activities conflict with the interests of the institution, they will not be permitted.
  • Ancillary activities for which the employee does not receive a salary or other income may no longer be performed by the employee if these activities conflict with the employer's interests.

The employee may receive a fine if the above provisions are violated. A ban on ancillary activities is often based on the wish to keep control over the employee. For example, there is a risk that the employee will resign due to having a long working week or, if the employee becomes (partially) incapacitated for work, their recovery could be hindered by an additional job. In practice, therefore, a ban on ancillary activities applies to everything the employee does outside of working hours. Sometimes a total ban applies unless the employer has made no (written) objection. An ancillary activities clause (to be distinguished from a non-competition clause, which concerns activities after employment and therefore does not cover additional activities during employment ) is not regulated by law; however, the clause does not qualify for the general binding declaration of a collective labour agreement.

Article 7:653a

The proposed article – article 7:653a of the Dutch Civil Code – will become law from 1 August 2022 and will fill the current legislative void.

First, article 7:653a will make null and void the stipulation whereby an employer prohibits or restricts an employee from performing work for others outside their established working times, unless this stipulation can be objectively justified.

Second, employers will no longer be able to disadvantage employees, neither in nor out of court, for exercising the rights that article 7:653a will grant them.

Article 7:653a only applies to ancillary activities performed outside contractual working hours.

The wording in the first paragraph ("unless") provides some clarification on justifying an objective reason for restricting ancillary activities. The bill only maintains the examples of the undesirable impact of ancillary activities that were given in the Directive – namely:

  • health and safety concerns;
  • the protection of the confidentiality of business information;
  • the integrity of government services; and
  • the avoidance of conflicts of interest.

While an employer will have to be able to provide an objective reason, this does not have to be included in the relevant clause of the employment contract and can be raised separately. This ensures that existing ancillary activities clauses will remain largely unchanged, although the employer will have to (re)consider the wording of the clause.

Comment

A total ban on ancillary activities is no longer possible (and probably never was). The bill will also end restrictions that are based solely on the fear that an employee might bother their employer (without this demonstrably being the case), or because the employer simply wants exclusivity of their employee. The practice of having to obtain prior permission from the employer for ancillary activities is not under pressure as a result of the bill. However, if the employer prohibits an employee from carrying out such activities, an objective reason must be given. Therefore, this bill will not require a significant adjustment of ancillary activities clauses.

For further information on this topic please contact Ronald Beltzer at Maes Law by telephone (+31 85 902 12 70‚Äč) or email ([email protected]). The Maes Law website can be accessed at www.maeslaw.nl.