Labour law changes to stamp out illegal employment

Several labour laws have come into effect in the Netherlands with effect from 1 January 2012, and further proposals are being looked at in earnest by the new government. Many of the new initiatives are intended to combat illegal employment and labour exploitation. This activity follows a period in which there has been little active control of labour market issues, particularly in the supervision of temporary employment agencies and the employment of illegal workers.

Protecting temporary workers

A requirement for temporary employment agencies to hold an operating permit was scrapped in 1998. In the thirteen years since then, the number of temporary employment agencies has multiplied, especially those that are involved with illegal workers. For some time, the social partners have been calling for stricter supervision and heavier sanctions for illegal practices.

Successive governments have begun to see the need for more control.

With effect from 1 January 2010, subcontractors became jointly liable with any temporary employment agency they used for the hire of labour for ensuring that the statutory minimum wage was paid to all workers.

A registration requirement has now been introduced for temporary employment agencies with effect from 1 January 2012. Agencies that are not registered with the trade register held by the Netherlands Chamber of Commerce will be fined, as will companies that hire staff from such agencies. Additionally, the tax authorities and labour inspectorate will be obliged to pass on the details of all agencies they encounter to the institutes responsible for certifying temporary employment agencies.

To ensure the implementation of EU temporary agency directive 2008/104/EC (59Kb PDF), the standard of equal treatment for temporary employees will be expanded and works councils will be awarded more extensive rights to gather information about engaging the services of temporary staff within their respective companies.

Combating labour exploitation

Several inspection agencies of the Ministry of Social Affairs and Employment were combined with effect from 1 January 2010, with the aim of improving the combat of fraud and exploitation in the labour market. Extra attention will be paid to the actors that form crucial links between the legal and illegal spheres, such as money launderers, front-men, and fixers helping illegal immigrants gain entry to the Netherlands.

Checks to combat illegal employment will be intensified, especially in sectors that traditionally use large numbers of temporary employees such as hotels, restaurants, cafés, agriculture, horticulture and cleaning. Companies breaking the law could be shut down and the maximum fines for knowingly hiring illegal workers will be raised.

Another measure being used to combat exploitation is to clarify the presumption of law in relation to minimum wages legislation.

Collective redundancy

Statutory regulations governing collective redundancy will be tightened.

With effect from 1 March 2012, employees who reach a termination agreement with their employer about ending their term of service will be counted in cases involving collective redundancy, as referred to in Directive 98/59/EC.

This amendment to the Collective Redundancy (Notification) Act fills the gap in terms of implementing the directive in Dutch law. The trade unions in particular have been pushing to expand the scope of application because they believe employers often use termination agreements to circumvent the law and, in doing so, marginalise the role of the unions and works councils in relation to collective redundancy as well.

Temporary employment limited for young people

In December 2011, the Minister of Social Affairs & Employment Henk Kamp announced that the option of four consecutive renewals of temporary employment contracts for young people up to the age of 27 would be scrapped. This option was originally introduced on 9 July 2009 with the intention of keeping young people employed for longer during the crisis. However, studies now show that the measure’s impact has been limited. Once it has been scrapped, the maximum number of consecutive temporary contract renewals for young people will be limited to three, as for all other employees.

Other legislation

Several other pieces of legislation have been passed.

  • The Directive on European Works Councils was implemented, albeit some months after the 9 July 2011 deadline. At the last minute, the provision on the intended meaning of ‘transnational matters’ was adjusted in line with the directive.
  • Statutory regulations governing the accrual of days off during illness were amended with effect from 1 January 2012. Employees who are ill will now accrue the same statutory minimum number of days off as other employees. The amendment follows on from a number of judgements reached in 2009 (joined cases C-350/06 Schultz-Hoff and Stringer C-520/06 and Pereda C-277/08) by the European Court of Justice (ECJ).
  • The expiry term of the statutory minimum number of days off (20 a year) will be limited to 18 months. This expiry term excludes extra-statutory days off. Since this legislation was enacted, conflict has arisen between the employers’ organisations and trade union federations surrounding the new regulations. The unions want to reach agreement through collective bargaining to retain the existing system, with an expiry term of five years, as well as the statutory minimum. The law permits this, but the employers are avidly opposed.

Various legislative proposals are still pending on the modernisation of regulations for leave and working hours, and on limiting the level of remuneration for top-ranking officials or senior executives.

Robbert van het Kaar, University of Amsterdam

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