Equal employment conditions for payrollers bill

Date: 5 December 2017

On 23 November 2017 members of the House of Representatives Van Dijk (PvdA), Özdil (GroenLinks) and Van Kent (SP) submitted a private member's bill, containing provisions as a result of which payrollers will be subject to the same employment conditions as those that apply to employees who hold the same or equivalent positions and who are employed by the client. 

Equal employment conditions
Payrolling means that workers are hired through an external organisation. The bill intends to give workers who perform work through a payroll scheme the certainty that they will be subject to the same employment conditions as those that apply to colleagues who are employed by the client. That is currently not always the case. This concerns both individual and collective employment conditions as well as pay and benefits. The bill is also supposed to discourage improper competition with respect to employment conditions. 

Special provisions of the temporary employment contract not applicable
Under the bill the special provisions of the temporary employment contract will no longer apply in case of payrolling. These exceptions (concerning, for instance, the chain provision, continued payment of wages during illness and the temporary employment clause) are, after all, contrary to the basic principle that a payroller is subject to the same employment conditions an employee who is directly employed by the employer is subject to. 

Payrolling benefits
The option to make use of payrolling will continue to exist. Payrolling can provide an employer with, inter alia, flexibility, offer administrative benefits and be an attractive option for own-risk bearers. If a worker is assigned to an own-risk bearer through a payroll organisation and the worker loses their work, the client (the own-risk bearer) does not have to pay the unemployment insurance charges. 

Transitional law and entry into force
The new rules concerning equal employment conditions and the end of the preclusion of continued payment of wages will only apply to assignments commencing on or following the date on which the bill enters into force. The rules will also start to apply to ongoing assignments six months after entry into force of the act. Parties will therefore be granted half a year to amend current agreements. The amended chain provision will continue to apply to contracts with payrollers concluded prior to the date of entry into force. Finally, parties will not be allowed to make use of the temporary employment clause immediately after the entry into force. 

Naturally, the above only applies in case the bill is adopted. It is possible that a majority of the House of Representatives favours the bill: during the debate on the Work and Security Act the former government unanimously adopted the Hamer motion, calling for the arrangement of equal employment conditions for payrollers. This motion has not been implemented yet because of a lack of agreement on the scope of the equal treatment, as is stated in a letter to Parliament from former Minister Asscher. We must now wait and see whether or not the Rutte III government endorses the bill submitted by the members of the House of Representatives of the PvdA, Groenlinks and SP. We will keep you informed.

This is a Legal Update from Emma van Dijk. Click here for pdf. 

For more information:

Emma van Dijk
+31 30 259 5539