Dutch Act on the Employment Conditions of Workers Posted in the European Union
By Eugenie Nunes and Marije Ozinga
The Dutch Act on the Employment Conditions of Workers Posted in the European Union – the “Act” (Wet arbeidsvoorwaarden gedetacheerde werknemers in de Europese Unie or WagwEU)
entered into force on 18 June 2016. The Dutch Employment Conditions Cross-Border Employment Act (Wet arbeidsvoorwaarden grensoverschrijdende arbeid) expired on that date. The Act is the implementation of both the Posting of Workers Directive and the Directive on the Enforcement of the Posting of Workers Directive (the “Enforcement Directive”). It sets out the employment conditions to which employees of European companies are entitled if they are temporarily posted to another EU member state. This newsletter addresses the effects that the Act will have in the Netherlands and its possible impact on your own operations.
The Act applies to employers in other EU member states that temporarily post employees to the Netherlands. It distinguishes three different types of posting: (i) service provision only; (ii) postings within multinational groups; and (iii) temporary agency work. The Act uses the terms dienstontvanger (service recipient) and dienstverrichter (service provider). The service recipient is a company domiciled in the Netherlands for which a posted employee or self-employed person works in the framework of transnational services. The service provider is the party that temporarily posts an employee to the Netherlands in the framework of transnational services.
Employers are required to apply the “hard core” employment conditions to employees who are temporarily posted to the Netherlands. Section 2 of the Act lists the provisions of the Dutch Civil Code that apply to employees who temporarily work in the Netherlands in the framework of transnational services.
When the Posting of Workers Directive entered into force it was furthermore provided that the hard core employment conditions in collective agreements that have been declared universally binding apply to foreign posted employees. The Act also gave rise to an amendment of Section 2(6) of the Wet op het algemeen verbindend en het onverbindend verklaren van bepalingen van collectieve arbeidsovereenkomsten (Collective Agreements (Declaration of Universally Binding and Non-Binding Status) Act). The purpose of that amendment was to clarify which employment conditions of a universally binding collective agreement are involved, thereby allowing trade unions to take action against employers of foreign posted employees that fail to comply with the conditions that apply under universally binding collective agreements. But employers need to know exactly to which employment conditions under universally binding collective agreements their employees are entitled. The Enforcement Directive therefore obligates EU member states to explain to foreign employees on a single official national website which employment conditions apply in which sector.¹
Note: the information on this website has not yet been amended in line with the new legislation.
The Enforcement Directive, which was implemented in the Act, offers several means of checking whether foreign posted employees are given the employment conditions to which they are entitled. It allows the exchange of information among Inspectorates in different EU member states and the cross-border collection of any penalties imposed. In the Netherlands the Social Affairs and Employment Inspectorate (“SZW Inspectorate”) is in charge of enforcement of the Act. Service providers must meet four administrative requirements:
- employers are under a duty of disclosure; they must provide the SZW Inspectorate with all the information it requires to enforce the Act;
- certain documents, such salary slips and working hours statements, must be present at the workplace or must be immediately available in digital form;
iii. the service provider must designate a contact for the SZW Inspectorate who can act as a liaison; and
- employers are under a duty to report, which will be addressed below.
Duty to report
The Act obligates a service provider who posts an employee to the Netherlands to inform the Minister of Social Affairs and Employment accordingly in writing or in electronic form before the work is commenced. This duty to report has been introduced because it may significantly contribute to the enforcement of the hard core employment conditions and the identification of letterbox companies and other schemes aimed at circumventing the Posting of Workers Directive; at present the Inspectorates do not always know exactly what employers operate in the Netherlands in what period.
The service recipient must verify the report (to a certain extent). It must check at the start of the work at the latest whether the report has been filed. If the Inspectorate finds that a service provider has not filed a report, or has filed an incorrect report, the service recipient may be fined in addition to the service provider. If the service recipient has reported the missing or incorrect report, it is immune from sanctions and may have the service provided.
Certain categories of employees and service providers may be exempted from the duty to report, for instance if the duty to report would place too great a burden on a sector and would restrict the free movement of services. The Dutch government has stated that it will exempt the free movement of persons and goods, since it is not always clear in that sector when posting is involved. Small service providers from border regions that regularly provide services in the Netherlands will also be exempt, for instance.
A digital reporting system will be introduced for filing the obligatory reports. That system, which will allow online reporting, is intended to be ready by 1 January 2018. The duty to report will therefore not enter into force before that date.