Legal

New employment legislation 2020

The ‘Labour market in balance’ legislation (Wet arbeidsmarkt in balans, ‘WAB’) is coming. The idea behind this legislation is to lessen the gap between permanent and flexible employees and to stimulate employers to hire employees under a permanent contract. This legislation will come into effect on January 1st, 2020. These are the most important changes.

Dismissal law amended

The WAB introduces an extra ground for dismissal, the so- called ‘i-ground’ or cumulative ground. Imagine, for example, an employee who is not functioning adequately (d-ground), but an improvement process has not yet been initiated; as a result of this, the employment relationship becomes further disrupted (g-ground). On its own, one of these grounds is not sufficient reason for dismissal. The new i-ground provides for this. With the i-ground, two or more grounds for dismissal can be combined to become one full ground for dismissal: the cumulative ground. Do note that, with the i- ground, the district judge can award a higher severance compensation – maximum of 50 percent.

Severance compensation

The WAB also changes how the severance compensation is calculated. The severance compensation will be calculated from day 1 of the employment contract (currently that is after 2 years), and the compensation always amounts to one-third of a monthly salary per year employed. Various compensation schemes will emerge, including ones for small employers who are discontinuing their company due to bankruptcy, and for employees on long-term work disability, who leave employment after 104 weeks of illness.

Consecutive temporary contracts

Under the WAB, the regulation for consecutive temporary contracts will also be expanded.

Current regulation New 2020 regulation
Maximum of 3 temporary contracts Maximum of 3 temporary contracts
Maximum of 6 months interval Maximum of 6 months interval
Total contract period of a maximum of 24 months Total contract period of a maximum of 36 months

That means that the temporary contracts that you can offer under the WAB, are longer on average than under the current regulation, 12 months against 8 months.

On-call agreements

Several changes are introduced for agreements for on-call employees.

  • On-call employees must be called at least 4 days beforehand (this can be shortened in the Collective Labour Agreement).
  • Need to cancel? You must do so ultimately 4 days before the work is due to commence (this can be shortened in the Collective Labour Agreement).
  • Cancelled too late? Then you are due to pay wages over the total intended call-out.
  • After 12 months, you must offer an on-call employee the opportunity of ‘setting’ the average work duration of the last 12 months as his/her new customary work duration per month.

On-call agreements

The way in which the unemployment benefits (WW) are financed is changing: as an employer, you will be paying a lower WW premium for permanent contracts than for flexible contracts. All on-call, zero-hour, min/max, and temporary contracts will be subject to a high premium from 2020. The difference between the high and the low percentage is always 5 percent. For example, low premium 1 percent, high premium 6 percent.

Insights

5 important changes for on-call employees

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Increase of wage costs with 5% for employees with a flexible contract

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