Legislative calendar

In this newsletter we will inform you of recent and prospective legislative changes regarding these topics:
1. Works Council and pension
2. Easier to hire school going occupational disabled persons
3. Indexation daily wage, minimum wage and transitional compensation
4. Income criteria of a highly skilled migrant
5. Amendments Working Conditions Act
6. Suspension Assessment of Employment Relationships Act
7. Reimbursement to employer for payment transitional compensation to long-term disabled employee


1. Works Council and pension
As of 1 October 2016, the right of consent of the Works Council (WC) with regard to pension schemes has been adjusted: the WC will have more influence in case of amendment of a pension scheme.

Effective 1 October 2016, the scope of the WC’s right of consent has been clarified:
- no difference between pension insurers and pension funds: the WC’s right to consent regards adoption, withdrawal and amendment of any “pension agreement” between employer and employee, whether at a pension insurer or fund;  
- amendments of the (financial) administration agreement between employer and pension fund may be included: amendment of the pension premium or pension indexation are in any case covered by the WC’s right of consent. This also applies to the employer’s decision to execute a pension scheme outside of the Netherlands.
In addition, the employer has a new information obligation to notify the WC of any change in the administration agreement. Upon receipt the WC has the opportunity to assess whether this can influence the pension scheme and in case of non-agreement, the WC can file a court appeal within a month.
Tips and tricks
The differences between amendments in the pension agreement with the employee and the administration agreement with the pension provider are still not always clear:
- agreement with WC: the employer can agree upon an additional arrangement with the WC to limit or expand their powers (a so-called “works agreement”);
- voluntary consultation with WC: it is advisable to explicitly indicate that the request for advice or consent is a one-time request which is not mandatory in order to prevent any precedent effect; and
- external expert: the WC can obtain external advice at the expense of the employer if informed upfront, the employer can try to influence this choice and cap costs.
2. Easier to hire school going occupational disabled persons
Effective 1 January 2015, the Participation Act (in Dutch: “Participatiewet”) and Jobs Quota Act (in Dutch: “Wet Banenafspraak”) introduced a conditional quota system for the employment of a minimum number of occupationally disabled persons. Employers who employ these persons can a.o. benefit from subsidies for wage costs and an internal coach. The ultimate goal of these Acts is to create 125,000 jobs by the end of 2025 whereby annual goals are set. Also, a target group register was introduced. The Employee Insurance Agency (in Dutch: “Uitvoeringsinstituut Werknemersverzekeringen”, UWV) assesses and registers every person that falls within the scope of the legislation. The quota system is activated if the goals are not met subject to a penalty for employers with 25 or more employees of EUR 5,000 per unfilled job position. In 2015 and 2016 the quota system was not activated and it seems that - on a national level - employers are also on track for 2017.  
As of 1 January 2017, both Acts have been simplified for school going young persons with an occupational disability. It is easier for employers to hire occupationally disabled persons who participate in secondary special education. A prior UWV assessment of this specific group is no longer required for registration in the target group register. Employers therefore immediately know if these employees fall within the job quota arrangement. In addition, it is made easier for employers to - under certain conditions - also apply for a wage cost subsidy for their current occupationally disabled employees.

3. Indexation daily wage, minimum wage and termination compensation

As of 1 January 2017, the following amounts have been indexed:
- the maximum daily wage is € 205.77 gross;
- the gross minimum wage is € 1,551.60 gross per month for employees who are 23 years or older*; and
- the maximum statutory termination (transitional) compensation is € 77,000 gross.

*The age for minimum wage will be lowered from 23 to 21 years old in two steps. Furthermore, the minimum wage will increase for employees who are 18-20 years old. These plans still require, at the moment of writing this newsletter, an approval of the House of Representatives and the Senate and will likely come into effect as of 1 July 2017.

4. Income criteria for highly skilled migrants

As of 1 January 2017, the income criteria for highly skilled migrants are as follows:
Category highly skilled migrant Gross monthly wage (excl. 8% holiday allowance)
30 years or older € 4,324
29 years or older € 3,170 
Students graduated in the Netherlands € 2,272
Blue Card holders € 5,066

5. Amendments Working Conditions Act

Effective 1 July 2017, the Working Conditions Act (WCA) (in Dutch: “Arbeidsomstandighedenwet”) will be revised with respect to involvement of the employer and employee in relation to the working conditions policy, prevention within the company and preconditions for professional conduct of the company doctor. It is likely that the Inspectorate of the Dutch Ministry of Social Affairs and Employment (in Dutch: “Inspectie Sociale Zaken en Werkgelegenheid”) will enforce these new rules as of 1 January 2018. The Inspectorate can impose a fine (between € 750 - € 1,500 and € 3,000 or higher in case of repetition) in case of non-compliance.
New right of consent for WC with regard to Health and Safety Officer
Every employer with 25 or more employees is obliged to appoint at least one person (internal or external) as a Health and Safety Officer in order to assist the company in the field of health & safety.
As of 1 July 2017, the Works Council will gain a right of consent with respect to the person who will be appointed as the Health and Safety Officer and his position within the company.
Effective access to the company doctor and new right to a second opinion
Every employer is obliged to have a policy in place to prevent sickness and reintegrate sick employees with the assistance of a company doctor, an occupational health and safety physician.
As of 1 July 2017, the employer will be obliged to inform his employees about their right to access the company doctor, with the following safeguards:

- permission of the employer is not required to consult the company doctor;
- there will be no unnecessary thresholds regarding the place and time of the consult;
- the employer will not be informed of the consultation and the reason thereof; and
- the outcome of the consultation will be anonymized.

Furthermore, as of 1 July 2017, the employer will also obliged to explicitly include the following minimum safeguards in their contractual arrangements with the company doctor:
- the company doctor has the right to visit every work place;
- the employee can request a second opinion from another company doctor, unless there are serious reasons dictating otherwise;
- the company doctor has a complaint procedure in place;
- the company doctor has the right to deliberate with the Health and Safety Officer and the co-determination body (WC or employer representative body) about measures related to the execution of the general working conditions policy;
- the company doctor can advise on preventive safety measures; and
- the company doctor needs to report occupational diseases to the Dutch Center for Occupational Diseases (in Dutch: “Nederlands Centrum voor Beroepsziekten”).

Tips and tricks
Employers, even with less than 25 employees, should consider to (further) develop their working conditions policy. In this context, it could be efficient to appoint the company’s emergency response team member (in Dutch: “bedrijfshulpverlener”, “BHV’er”) as the Health and Safety Officer. In addition, the above-mentioned safeguards have to be included in the current contract with the company doctor. The amendment of the contract would be the perfect opportunity to make additional arrangements with regards to maximum number of consultations and second opinions.

6. Suspension Assessment of Employment Relationships Act

As of 1 May 2016, the Assessment of Employment Relationships Act (in Dutch: “Wet beoordeling deregulering arbeidsrelaties”, WDBA) entered into effect. This law provides clients and contractors a possibility to voluntarily use template - and pre-approved – contracts for the provision of services available on the Tax Authorities’ website. The Tax Authorities initially indicated that they would apply an implementation term until 1 May 2017 in order to provide clients and contractors with sufficient time to adjust their working method.
Extension of the implementation period until 2018
The government has decided to extend the above-mentioned implementation period until 1 January 2018. The implementation period is, however, not applicable to abundantly clear cases of fraud which could still be fined:
- during the suspension the criteria’s “free substitution” and “relationship of authority”, as provided for in the template agreements, will be reassessed in order to establish a better connection with the current (use thereof in) society;
- the Tax Authorities will, in principle, not enforce the WDBA during the reassessment and will not impose fines or additional tax levies;
- the Tax Authorities will, however, address unfair competition and will still enforce the WDBA in case of “malicious” parties:
“Malicious is the client or contractor who willfully creates or continues a situation of manifest pseudo self-employment, because he knows - or could have known - that factually there is an employment [agreement] (and gains improper financial advantage in doing so and/or affects the playing field in an unfair manner).”
- the Tax Authorities intend to undertake a “coaching” role by performing inspections, provide instructions and give certainty that no additional tax levies or fines will be imposed in retrospect.

Tips and tricks
In view of the uncertainty surrounding the WDBA and the fact that the Tax Authorities can still impose fines and additional levies, we recommend clients and contractors to re-evaluate their contracts (and possible new additional arrangements) from a legal and tax perspective and see to it that the factual execution of these contracts is in accordance with the intentions of parties.

7. Reimbursement to employer for payment transitional compensation to long-term disabled employee

In case of termination of the employment on the initiative of the employer, the company is - as a rule - obliged to pay the employee a termination (transitional) compensation if the employee has been in service for at least 24 months. Employers could experience payment of this compensation unjust in case of a termination of an employee who is ill or disabled for a longer term. In this context, it is important to consider that employers are obliged to continue payment of wages during 104 weeks of illness, they are prohibited to terminate the contract during this period and make expenses with respect to the re-integration of the sick employee. After 104 weeks, in principle, employers do no longer have a duty to pay salaries and are allowed to initiate a termination of employment. However, since in such case the employer is required to pay a termination (transitional payment), some employers tend to continue the employment after the 104 weeks of illness but keep it dormant (instead of opting for termination) in order to avoid the termination (transitional) compensation.
Legislative proposal*: compensation for employer
As of 1 January 2019, it will be possible for employers to receive a compensation from the UWV for the transitional compensation which was paid to employees who have been unable to work due to illness for more than 104 weeks. This compensation is meant as a contribution for the re-integration expenses and will be implemented with retrospective power as from 1 July 2015. The employer still needs to pay the transitional compensation, but will be compensated by the UWV from the government fund for unemployment insurance contributions, the General Unemployment Fund (in Dutch: “Algemeen Werkloosheidsfonds”, Awf). On the other hand, the employer’s Awf-contribution (which is part of the unemployment insurance contribution) will be increased.
*This legislative proposal still requires, at the moment of writing this newsletter, an approval of the House of Representatives and the Senate. 
Copyright © 2017 Doorn en Keizer B.V. All rights reserved.

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Employment Law · Piet Heinkade 55 · 1019 GM · Amsterdam, Noord Holland 1019 GM · Netherlands

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