New Dutch employment act WAB: are you ready?

On 1 January 2020, the employment act the WAB came into effect. There are certain areas that require action by you as an employer, particularly if you engage flexible workers in your organisation.

We have created a WAB Checklist which includes an overview of the most important changes and actions you should take.

Below is an overview of the highlights of the WAB Checklist. For the full update and more information please click on this link.

Increased social security premiums for fixed-term employment contracts.
From 1 January 2020, employers have to pay a higher Unemployment Act (WW) premium of 7.94% for all employees without a written employment contract for an indefinite period. The high premium also applies to on-call agreements for an indefinite period that do not include a pre-agreed fixed (monthly or annual) working time (vaste arbeidsomvang).

  • Check whether you have a written employment contract (signed by both parties) for an indefinite period of time in your files. If not, make sure that you sign an addendum or draw up a written employment agreement, otherwise the higher premium will apply.
  • Modify your payslips: from 1 January 2020, payslips must state whether the employee has an indefinite or fixed term employment contract.

Changes for on-call workers
From 1 January 2020, employers are required to provide on-call employees with a minimum notification period of four days before the employee is required to commence the work. This period can be shortened to a minimum of 24 hours by a collective labour agreement.

After 12 months the employer must offer the on-call worker guaranteed fixed hours.

  • Check the duration of your on-call contracts. If the duration of an on-call contract was was for more than 12 months on 1 January 2020 an offer for a fixed number of hours must be made no later than 31 January 2020. The number of hours must be based on the average number of hours worked per month between 1 January 2019 and 31 December 2019.

Payroll employees
Individuals appointed under a payroll agreement now fall under the payroll legislative regime with effect from 1 January 2020 and no longer fall under the rules of the temporary agency contract (uitzendovereenkomst). Certain provisions can therefore no longer be invoked. From 1 January 2020, payroll employees are entitled to at least the same employment conditions as employees directly employed by the company that hires them.

Also, the normal rules on the maximum number and total period of fixed-term employment contracts (the so-called “ketenregeling”) now also apply to payroll agreements.

  • Check whether your payroll agreements contain an agency clause (uitzendbeding) or an (extended) exclusion from the obligation to continue to pay wages. These provisions can no longer be invoked.
  • Inform the payroll agency about your terms and conditions of employment.
  • Check whether you have concluded multiple payroll agreements regarding the same employee. If the payroll agreement is entered into before 1 January 2020, the old rules will continue to apply. This means that if a fourth payroll agreement is in place that ends in 2020, or if an agreement has been entered into before 2020 for more than 24 months, the agreement is automatically converted into an agreement for an indefinite period.

Transition payment due from the first working day
From 1 January 2020, employees who are dismissed are entitled to a transition payment (statutory severance) from the first day of their employment contract (instead of after two years). The new rules apply to terminations after 1 January 2020.

Further, the higher accrual for employees who have been employed for more than 10 years and who are older than 50 years no longer applies from 1 January 2020.

Amendment of the “ketenregeling”
Consecutive fixed term employment agreements automatically convert into an agreement for an indefinite period of time if the aggregate term exceeds 36 (instead of the previous term of 24) months, or if it is the fourth fixed term employment agreement.

  • Check (i) the expiry date of the temporary contracts, (ii) the number of contracts concluded with the employee and (iii) the total duration of the contracts.
  • No transitional arrangements apply (except for payroll agreements – see above) and the broader rules apply immediately from 1 January 2020. For example: did you reach the maximum total period of 24 months on 1 January 2020? You can now enter into a new fixed-term agreement for maximum 12 months.

“i-ground” as new ground for dismissal
The WAB introduces an additional ground for dismissal which allows employers to combine two or more grounds for dismissal. The following dismissal grounds can be combined: (i) the regular inability to perform work, (ii) non-performance, (iii) culpable acts of the employee, (iv) damaged working relationship and/or (v) other grounds (the so-called “h-ground”).

The court can grant, in addition to the transition allowance, a severance up to half of the transition allowance in case of an i-ground dismissal.

  • In cases where one ground for dismissal cannot be fully substantiated, termination of the employment contract may nevertheless be possible after 1 January 2020.