The Labour Market Fraud (Bogus Schemes) Act

On 1 July 2015, the Labour Market Fraud (Bogus Schemes) Act came into effect. This Act is meant to counteract underpayment of (usually foreign) workers in so-called “chain structures”. The Act creates a new chain of liability as to payment of full wages. In addition to the employer, the employer’s client is also liable for payment of the full salary to the employee. Where the client cannot be located, the employee may seek payment higher up the chain and hold the client’s client liable, and so on.

The client can avoid liability by arguing that it cannot be blamed for the fact that the wages have not been paid. The client must demonstrate that both before and after its interaction with the employer, measures were taken to ensure that the appropriate wages were being offered and had been paid. Such measures may include paying a realistic price for the hiring of personnel, altering the terms and conditions of employment, and exclusively engaging in business with companies that are registered at the Dutch Trade Register or a foreign equivalent and which are certified.

A second change brought in by the Labour Market Fraud (Bogus Schemes) Act is the new obligation of an employer to pay the statutory minimum wage directly and not in cash. In addition, employers are no longer allowed to deduct expenses (for instance, for housing) from the minimum wage.

The Merger Code 2000

As of 1 October 2015, the Social and Economic Council (SER) adopted a revised version of the Merger Code 2000. The core of the Code is and remains that merging parties should notify the relevant trade unions about the merger an appropriate amount of time in advance, give information on the merger and provide the trade unions with the opportunity to present an opinion on the proposed merger from the point of view of the employees.

One of the main amendments is an extension of the scope of the Code. As of 1 October 2015, the Code not only applies to commercial market businesses, but also to companies in the healthcare, educational and cultural sectors. Further, as of 1 October 2015, the Code applies to independent professions and to the public sector. A second amendment provides for stricter confidentiality obligations for the relevant trade unions.

The Flexible Work Act

On 1 January 2016, the Flexible Work Act came into force. The Act allows employees in the Netherlands to not only ask their employer to adjust their number of hours of work per week, but also to adjust the start and end time of the working day and the workplace location. The employer is only allowed to reject any such request where there is a substantial business reason for doing so. Dutch case law has shown that this is a difficult criterion for the employer to satisfy. A request to change the workplace location (i.e. a request to work from home) is not subject to a specific criterion and may be rejected by the employer after consultation with the employee.

The Working After the State Pension Age Act

The Working After the State Pension Age Act also took effect from 1 January 2016. This Act makes it easier and less expensive for employers to hire and fire workers beyond the state pension age. For example, the period for continuing to pay wages in cases of illness is reduced from 104 days to (eventually) six weeks.

It was already the case that the procedure required before giving a notice of termination is not applicable to employees who have reached the state pension age, but in addition to this, the Working After the State Pension Age Act introduces a fixed termination notice period of one month instead of a variable notice period of one to four month(s) (which depended on the employee’s length of service).

Furthermore, as of 1 January 2016, there is an exemption in respect of the requirements as to successive fixed-term employment contracts for employees who have reached the state pension age. For employees below the state pension age, it is only possible to enter into a maximum of three successive fixed-term contracts, which in total may not exceed a term of 24 months. As of 1 January 2006, employees of the state pension age are allowed to enter into six successive contracts within a period of 48 months. The Dutch state pension age is to rise in stages from 65 in 2012 to 67 in 2021.