Stichting Naleving Cao voor Uitzendkrachten (the “SNCU”) is the spokesperson, supervisor and enforcer of the collective agreement for temporary employees (of both the ABU (Federation of Private Employment Agencies) and the NBBU (Dutch Association of Intermediary Organizations and Temporary Employment Agencies). SNCU has the authority to check whether a temporary employment agency falls within the scope of the collective agreement and, if so, whether that agreement is being correctly enforced. To that end the SNCU regularly exchanges information with the Dutch Tax Administration and the Inspectorate SZW, among others. If it suspects that a temporary employment agency is required to apply the collective agreement but is not doing so, or not doing so correctly, the SNCU takes action. It is then up to the employment agency to prove either that the collective agreement does not apply to it or that it is indeed applying it correctly. The Court of Appeal of ’s‑Hertogenbosch recently ruled on this issue.

What was the case?

Synapsis B.V. (“Synapsis”) was originally a one-man business, set up as a private initiative. As a type of work experience programme, Synapsis organised projects at third parties using persons with a disadvantaged position in the labour market who had entered its employment. Those employees were closely supervised during those projects by a working foreman, also in the employment of the one-man business. The arrangement set up for that purpose had been agreed on with the Tax Administration and (at that time) the GAK (Joint Administration Office). In light of the increase in the work, Synapsis also hired “regular” employees at some point. Because Dutch employees were often unwilling to perform the work for more than one or two days, Synapsis opted to use Polish employees, who were willing to perform the work for longer periods.

In December 2008 SNCU requested Synapsis to submit data. But Synapsis stated that it was not a temporary employment agency and could not submit all the data requested. SNCU insisted, stating that it suspected that the collective agreement did in fact apply to Synapsis. It subsequently commissioned an investigation by investigation agency VRO. One year later another agency (Providius) performed a scope of application investigation, but failed to perform fieldwork also at Synapsis’ customers.

SNCU then requested the court to order Synapsis to comply with the collective agreement, to make supplementary payments to the employees involved, in the estimated amount of EUR 213,145, and to pay damages to SNCU itself. But SNCU was unsuccessful in court: the judge initially found that it had not been established that Synapsis’ customer was in charge of supervising and managing the work performed by Synapsis. It was therefore not an established fact that temporary agency work was involved.

On appeal, the question in dispute was whether Synapsis was a temporary employment agency, whether its employees were temporary employees and whether Synapsis entered into temporary employment contracts with its customers. Synapsis furthermore argued that, if temporary agency work was involved, the payroll total was insufficient to come under the collective agreement.

Under the supervision and management of a third party

Section 7:690 of the Dutch Civil Code provides that a temporary employment agreement is an agreement under which an employer makes an employee available to a third party on a professional or commercial basis, to perform work on the basis of an assignment given to the employer by that third party, under that third party’s supervision and management.

Legislative history does not give any definition of “supervision and management of a third party”. Judges must therefore base their rulings on the employer-employee relationship requirement within the meaning of Section 7:610 of the Dutch Civil Code. The question is therefore whether Synapsis’ employees de facto worked under the authority of Synapsis’ customers and therefore not under Synapsis’ authority.

Court of Appeal’s ruling

The Court of Appeal subscribed to the subdistrict court judge’s finding that the principal rule of Section 150 of the Dutch Code of Civil Procedure is that SNCU rather than Synapsis was required to furnish facts and provide evidence. It was therefore up to SNCU, if necessary, to substantiate its claim that the collective agreement applied to Synapsis. It was apparent from the documents that Synapsis itself was also not certain on what legal basis it performed its work: it sometimes used the term aanneming van werk (contracting of work), sometimes referred to contracting (engagement), and sometimes classified its activities as uitzending (temporary agency work). The Court of Appeal therefore found that it had to be determined on the basis of the actual circumstances who was in charge of supervision and management in that triangular relationship under employment law, in order to determine whether temporary employment contracts were involved. The Court of Appeal thereby found that Synapsis was not required to demonstrate that either contracting of work or engagement was involved. It was up to SNCU to demonstrate that; its claim failed on that ground.

SNCU then relied on Providius’ report, but in the Court of Appeal’s opinion that report insufficiently supported the argument that the customers were in charge of management and supervision during the investigation period. That should then have been apparent from VRO’s investigation report, which it was not. However, Providius had not performed scope of application investigation at the customers themselves, and the investigation by VRO was not a scope of application investigation. SNCU should therefore have performed such an investigation earlier.

In sum, SNCU kept Synapsis a “prisoner” for years but was then unable to prove that the collective agreement applied. Synapsis was successful in this case, but it is likely that SNCU will engage the assistance of the Inspectorate SZW if necessary in order to perform a “field investigation”.

We regularly represent companies in disputes with the “collective agreement police”, in and outside the temporary employment sector. Please do not hesitate to contact us if you have any questions on this point.

Please find the Court of Appeal’s ruling (in Dutch) here.