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New Dutch employment law: Balanced Labour Market Act

On 28 May 2019, the Senate adopted the Balanced Labour Market Act (WAB). The WAB will enter into force on 1 January 2020 and should ensure a reduction of the risks and costs between permanent and flexible work. If you employ employees, the WAB will bring about changes that will have an impact on your workforce. It is therefore wise to take note of the changes and to anticipate any negative consequences of these new regulations.

Reason for WAB legislation

According to the government, permanent contracts offer workers a lot of protection under the current rules, while flex workers have little protection. This difference in protection means that employers are often reluctant to take on employees on a permanent basis. As a result, employees unnecessarily often end up in flex jobs where they have few prospects for security. The Cabinet wants to put an end to this by introducing the WAB. The Cabinet aims to give flexworkers more security in their work and income. In addition, the government wants to encourage employers to employ employees on a permanent basis.

The WAB, the changes as of 1 January 2020

  • The provisions on succession of fixed-term employment contracts will be extended to 3 years instead of the current 2 years;
  • The regulations concerning casual workers are being adapted. Specific periods will be applicable for calling up and cancelling a call up. In addition, after a period of one year, an offer must be made to the casual worker for fixed working hours based on the average number of hours worked in the first year;
  • The transitional payment will henceforth be applicable from day 1. The increased accrual of the transitional payment, on the other hand, will be withdrawn;
  • There will be an additional ground for dismissal in the law, the cumulation ground. This allows employers to combine two or more incomplete grounds for dismissal into a full ground for dismissal;
  • The regulations concerning the sector contribution for unemployment benefit will change. From now on, only employees with a permanent contract with a fixed number of hours will be subject to the low unemployment benefit contribution, while all other contracts (such as flex contracts, zero-hours contracts and temporary contracts) will be subject to the high unemployment benefit contribution;
  • Payroll employees will no longer be subject to the statutory temporary employment regime. Employees who work via payrolling will get the same terms and conditions of employment as normal employees.