New labour law plans: Wet Arbeidsmarkt in Balans (WAB, "Act Balanced Labour Market")

The legislative proposal for the WAB was recently presented. The aim of the proposal is to make it more attractive for employers to (permanently) employ employees. The intended date for the WAB to enter into force is 1 January 2020. We have listed the most important changes:

  • Cumulation ground: The legislative proposal will make it possible to request termination on the basis of an accumulation of reasonable grounds for dismissal, instead of one full, independent ground for dismissal. This should, for example, make it possible to request termination on the dismissal ground of dysfunction combined with the dismissal ground disrupted employment relationship. If a court terminates an employment agreement on the basis of this cumulation ground, the transition payment can be increased up to a maximum of 1.5 times the transition payment.
  • Transition payment
    • Accrual: Employees will accrue the right to a transition payment directly from the start of the employment (as opposed to after two years of service). The transition payment per year will amount to 1/3 of a monthly salary per full year of employment. This also applies to employment agreements longer than 10 years.
    • Compensation in the event of dismissal on grounds of long-term disability: Employers will be compensated for the payment of the transition payment if they dismiss an employee after two years of illness.
  • Chain of contracts rule: The maximum term of the chain of contracts rule — under which fixed-term employments contracts are automatically converted into employment contracts for indefinite term — is extended from two to three years, as was also the case prior to the entry into force of the current legislation (WWZ).
  • Probationary period and non-competition clause: The legislative proposal provides the possibility to agree a probationary period of five months for employment contracts for an indefinite term. Employment contracts for a fixed-term of two years or more may include a probationary period of three months. In both cases, it must be the first employment contracts concluded between the parties. As regards the non-competition clause, the employer can not derive any rights from the non-competition clause if an employment contract for indefinite period is terminated during the probationary period, unless there are compelling business or service interests.

Statutory director receives reasonable compensation of EUR 100,000 gross after 3 months of employment

During the shareholders meeting, the employment contract of the statutory director has been terminated due to a difference of opinion after employment for 3 months. The director is not entitled to the statutory transition payment or to nullify his dismissal. In this case, the director requests the court of appeal a reasonable compensation of EUR 100,000 gross (which equals 11 times the monthly salary) due to the fact that there is no reasonable ground for his dismissal. Since the different of opinion has not been discussed with the director prior his dismissal, the court of appeal ruled the decision that there was indeed no reasonable ground for dismissal. Nor an irreconcilable difference of opinion has been proved. In the absence thereof, the court of appeal awarded the reasonable compensation.

Court grants a reasonable compensation of EUR 530,000 gross after a violation of the relocation obligation

A former employee has copied the employer's database and handed it over to third parties. Employer in this case is an employment agency and the shared trade secrets concern the data of personnel. The damage consists of the fact that the trade secrets have come into the hands of third parties and the loss of turnover of the employer because its workforce of active personnel has dropped. The (former) employee and the third parties are jointly and severally ordered to pay compensation for the damage suffered by the employer. The exact damages will be determined in a follow-up proceedings for the determination of damages. It is left undecided whether the (former) employee has also failed in his obligation under the employment contract.