Is your template employment agreement all set for yet another statutory adjustment?

Because of a new European directive, the Netherlands must implement new legislative amendments as of 1 August 2022. These new legislative amendments have consequences for – among other – the information requirements to provide mandatory training that is free of cost, study cost clauses, ancillary activities, and secondment. It is possible that your template employment agreement needs modification as of 1 August 2022. It could also have consequences for the employment agreements of employees that have already started or will start before 1 August 2022. In this post we will set out the most important new legislative amendments.

1. What is implementation of an EU-directive?

When the European Union have formally adopted EU legislation, it must be implemented by the member states of the European Union. This is called implementation. This implementation in national legislation is bound by a deadline, in this case, 1 August 2022.

2. Which EU-directive is going to be implemented?

On 20 June 2019, the EU Directive 2019/1152 (the “Directive”) on transparent and predictable working conditions in the European Union was adopted. This Directive must be transposed into Dutch labour law by 1 August 2022. The Directive aims to improve working conditions by promoting transparent and more predictable working conditions while ensuring adaptability in de labour market. The bill to implement the Directive in Dutch law was submitted on 11 November 2021 and is still pending.

3. What does the implementation change?

The new legislative amendments bring about various adjustments to Dutch (labour) law. These changes are set out below.

A. Limitations to prohibit ancillary activities

Usually, an employment contract includes a prohibition to perform ancillary activities without the permission of the employer. From the Directive it follows that employees are allowed to have multiple jobs at the same time. All employees are free to works for another employer or self-employed outside of the agreed working hours. The permission to conduct ancillary activities can be restricted if this can be justified by an objective reason such as protection of confidential business information, the avoidance of conflict of interest and the health and safety of the employee. The list of justifications is not exhaustive, and it is not necessary to include the justification when entering the employment contract. The justification may also be given on a later moment. Withholding permission to perform ancillary activities after 1 August 2022 is only possible if an employer can rely on a justification. It is important that an ancillary activities clause meets these requirements.

B. Expanding the obligation to provide information

The legislative proposal extends the list of information that the employer must provide to employees as a minimum. As of 1 August 2022, the employer must also provide information about:
• Leave arrangements;
• Training entitlement;
• Working hours;
• Workplace;
• Separate wage component such as bonuses or other allowances; and
• Procedural aspects at the termination of employment.

C. “Unpredictable” and “predictable” work

As of 1 August 2022, a distinction must also be made between a predictable and an unpredictable work pattern in terms of the employer’s mandatory provision of information. Unpredictable employment exists if an employee must perform work at unpredictable times and days, for instance a on-call employment. In case of such an unpredictable work pattern, the employer has a more extensive information duty. The employer must inform employees about the times and days that the work must be performed, the so-called reference hours and days.

D. Providing mandatory training

The employer’s obligation to provide (mandatory) training free of costs will be expanded, and after 1 August 2022 it will no longer be possible to agree upon a study cost agreement for mandatory studies followed by employees. In principle, the employer must provide mandatory training free of costs and the time an employee spends on this mandatory training must be regarded as working time.
Not every training is covered by this regulation. What training is mandatory for employees to perform the job? Training that the employer is obliged to offer based on national law or a collective bargain agreement (CLA). This does cause for employers being required to offer all training to obtain, maintain or renew a professional qualification free of charge. It will only concern training in the field of things such as safety. Free of charge means that the employer must pay for all cost, including study materials, examination fees, travel expenses, etc.

E. Right to predictable forms of work

After 26 weeks of employment, employees may request for a work pattern with more predictable and secure working conditions. Employers are not obliged to agree to all request and the work must be available. Employers must respond to such a request in writing and motivated within one month. Small employers (less than ten employees) must respond within three months. Without a timely written and motivated response from an employer, the work will be adjusted in accordance with an employee’s request. This may result in an employment contract (e.g., a on-call contract for zero hours) having to be adjusted (e.g., to a fixed number of hours contract).

F. EU secondment

If an employer seconds an employee from the Netherlands to another EU member state, the employer must inform the employee in advance of the salary to which the employee is entitled according to the applicable law of the member state where the employee is seconded. This includes all allowances and arrangements for reimbursement of travel accommodation and meal costs.

4. Conclusion

Abovementioned legislative amendments have immediate effect, with exception of some information requirements, as of 1 August 2022. This has consequences for the information requirements of employers, but also on the possibility to prohibit ancillary activities and on the duty of employers to pay for study if the study is required based on the law or a CLA. This means that existing (template) employment contracts must be checked and, to the extent required, should be adjusted for them to be in line with the new legislative amendments. If you would like us to assist you in that regard, do not hesitate to contact us.