On 3 April 2023, Social Affairs and Employment Minister Van Gennip sent a letter to the House of Representatives, detailing the government's ambitions around labour market reform in outline and also presenting measures, on how this could be achieved.
The parliamentary letter (and the intention to reform the labour market) is based on the conclusions of the Borstlap Committee, the SER-MLT opinion and the elaboration of relevant passages from the coalition agreement. The measures would aim to bring more balance to the various forms of contracts, by offering more security to workers on the one hand and increasing agility for companies on the other.
The labour market package consists of several components, with stand-alone measures.
More security for workers
- Mandatory disability insurance (aov) for the self-employed
The starting point is to add ZZP-ers to the circle of insured persons. By default, a self-employed person should be insured for a benefit of 70% of the last earned income, up to the limit of 143% of the minimum wage. The benefit will not exceed 100% of the minimum wage. The compulsory insurance does not apply to DGAs. The Cabinet is also investigating the possibility for a self-employed person to choose between the public insurance or a private insurance with at least the same coverage and premium as the public variant.
- 0-hour and min/max contracts to be abolished
The on-call contract will be replaced by a basic contract for the minimum number of hours employees are employed. Employees must remain available to employer at least 30% above the minimum. To offer employees more security, the employee will thereby be given the right to refuse the call outside these predetermined and fixed available hours.
The moment employees structurally work more hours than the predetermined minimum, an offer to adjust the scope of work will follow after 12 months (which already applies to on-call workers under the WAB). There is an exception for pupils and students with a part-time job; they can still continue to work on the basis of the current on-call contracts.
- Temporary workers will get a more secure contract with the agency after 52 weeks worked
Temporary workers will get a more secure contract from the agency where they work sooner. The duration of the most uncertain phases will be shortened. Moreover, they will get the right to a permanent contract sooner. In addition, the Cabinet wants to prevent competition on terms of employment through temporary agency work, by supplementing the current laws and regulations on this, so that other terms of employment also have to be at least equivalent.
- The current interruption period of six months in the chain rule will be abolished
To prevent so-called revolving-door constructions in temporary work and increase the perspective of a permanent contract, the current interruption period will be changed to an administrative expiry period of five years. After three consecutive temporary contracts with the same employer, a new temporary contract may only be concluded after five years.
- Establishing an employment commission for vulnerable workers
- Income provision for older unemployed persons
The Income Support for Older Unemployed Act will be extended one more time by four years.
- Flexibility within permanent contract
Regarding the WW premium differentiation, there will be no premium increase for additional work from 30 hours per week in the case of a permanent contract (this was previously the case for a permanent contract for at least 35 hours per week).
Earlier clarity on reintegration obligations of small and medium-sized entrepreneurs
Small and medium-sized employers (up to and including 100 employees) can get clarity on the possibility of sustainable replacement of the employee after one year of illness. This will allow them to continue their business operation. Employer and employee can jointly determine that reintegration with their own employer (First Track) is no longer obvious. The moment they cannot reach a mutual agreement and the employer wants to close the First Track, the UWV must be asked to assess this. The employer does remain responsible for two years of continued salary payment during illness and for the progress of the reintegration process. In the second year of illness, the employer therefore remains responsible for the reintegration of the sick employee, even if the First Track has been concluded.
For larger employers, the current reintegration obligations continue to apply.
Employee retention in the event of crises and calamities
There will be a Crisis Staff Retention Scheme (CP), which was previously the part-time unemployment scheme. The scheme is aimed at coping with crises and calamities that fall outside the regular business risk.
Employers can only claim it if they have at least 20% less work across the entire company. Moreover, the CP only applies to temporary crisis situations, where a company can make use of the scheme for a maximum of six months and no extension is possible.
Employers will be given the option to have employees temporarily work in a different position or at a different location, or to have employees temporarily work less (at least 20%). An allowance can be used for the hours worked less.
Preventing false self-employment
The Government wants to clarify regulations around the assessment of employment relationships/ false self-employment:.
- Colouring the open standard "working in the service of" (authority relationship) from Section 7:610 of the Civil Code;
- A civil-law legal presumption of an employment contract, linked to an hourly rate (possibly between €30 and €35);
- Improve and strengthen enforcement on false self-employment in the short term..
Always a prospect of new work
The Government wants to give as many people as possible the prospect of new work based on two pillars: stimulating lifelong development and guiding more people to work by reforming the labour market infrastructure and stimulating work-to-work when terminating an employment contract.
It is expected that the necessary legislation will be put into Internet consultation around the summer of 2023 so that it can be presented to the House of Representatives in spring 2024. If you would like to be kept informed of further developments in this context or would like to know about the current employment law regulations, please contact one of SPEE lawyers & mediation's employment lawyers.