Being left out of the NOW: is there anything to object to in the administrative court?

The Emergency Employment Bridging Measure ("NOW") has already been able to provide financial support to many business owners over the past year. However, some employers were excluded, for example because they had only just been established. However, the NOW does not provide any possibility to deviate from the scheme in individual cases. business owners who went to the administrative court invariably fell short.

Recently, the highest administrative court, the Central Appeals Council (CRvB), ruled for the first time on whether deviation from the NOW is possible in an individual case. Does that ruling offer new possibilities?

Facts

Briefly, the ruling is about a company that had opened a restaurant on February 1, 2020. For the NOW 1.0, the business owner did not receive an advance because there was no wage data for January 2020 or November 2019. The advance did require that. The business owner would eventually receive the final grant, however, because the NOW 1.0 had been subsequently modified to include the month of March 2020 when determining the grant. However, the advance payment scheme had not been adjusted. But of course, the advance payment was precisely what the business owner could use.

For the NOW 2.0, business owner was also ineligible because the business owner accountant had filed a zero return for the month of March 2020 because there was not enough money to pay payroll taxes. Thus, no return of wages paid had been filed by the May 15, 2020 reference date. The corrected return came in on May 23, 2020, too late to qualify for NOW 2.0.

Judgments at first instance and on appeal

The administrative law judge in the first instance ruled, first of all, that the regulation simply does not allow for customization. According to the judge, the regulation in this specific case also did not lead to "disproportionate outcomes" and the choices made by the minister with the regulation are sufficiently explained by the minister. For example, the reference date cannot be deviated from in order to prevent fraud. The judge saw no reason to disapply the potentially adverse provisions of the regulation in this case. The ruling was received critically by experts.   

Nevertheless, the CRvB upheld the ruling. The regulation is generic in nature and simply does not aim to provide an all-encompassing regulation to save all companies, according to the Board. The CRvB also saw no reason to deviate from the reference date in this case because of the Minister's justification mentioned above.

Sometimes still possible deviation from reference date

The CRvB considered that in some cases, deviation from the reference date is indeed possible, namely in cases where the claimant was unable to file a wage return for the month of March 2020 by May 15, 2020 due to a calamity, and cases where the Tax Administration granted the claimant an extension to file the wage return for March 2020 until after May 15, 2020.

In November 2020, an administrative judge at first instance had also considered in another matter that deviation from the reference date was possible under conditions, but had phrased those requirements as cumulative: both a postponement and a calamity. I do not see this in the judgment of the CRvB. The CRvB is talking about two separate cases in this ruling: either a case of postponement, or an emergency. Neither case applied to the business owner in question.

In short: very little room for customization under NOW

And so business owner fell by the wayside. The strict line taken by the administrative law judges is striking: in not a single ruling on the NOW that has appeared so far have the courts ruled that a deviation from or exception to the NOW rule is possible. No matter how detrimental that may be to the business owner and its employees concerned. Thus, there is only room for deviation from the reference date, under the conditions mentioned.

Looking ahead

It is currently still possible to apply for NOW. Currently the NOW 3.0 is valid, its fourth application period ("tranche") runs until April 1, 2021. The last application period for the time being is the fifth, which runs until July 1, 2020. In view of the above, it is important to get proper advice on the content and conditions of the scheme. We will be happy to support you in this regard.