In an earlier blog, we wrote about the Parliamentary Letter outlining the main features of the labor market, in which intended changes within labor law were announced. One intention was to tackle so-called false self-employment. Meanwhile, this intention has been elaborated in a first bill that has been made public for internet consultation: the "Clarification of Assessment of Employment Relations and Legal Presumption Act". The bill has not yet been sent to the House of Representatives, but it is already being heavily criticized. This blog discusses the changes the bill aims to make and the status of the bill.
Background of the bill
The law aims to solve a well-known problem: false self-employment. A false self-employed person is someone who is regarded as a self-employed person by himself and his "client", while in reality this person is an employee. There are major risks associated with false self-employment. The employer can abuse the construction by claiming, for example, that he can simply dismiss the employee without regard to the strict dismissal protection to which the employee is actually entitled. For society, it is problematic because false self-employment encourages social fraud, as all compulsory taxes and contributions are wrongly not paid.
What does the law aim to change?
The biggest cause of false self-employment is the lack of a clear and manageable assessment framework. The bill therefore proposes an additional legal assessment framework.
Section 7:610 of the Civil Code provides the current test framework by which employment relationships are qualified. A working relationship qualifies as an employment contract if the worker (1) personally performs work (3) in the service of the employer against payment of wages (2) (authority criterion). The interpretation of the authority criterion causes the most discussion in the distinction between employees and self-employed workers. The bill proposes a clarification of this authority criterion in Section 7:610 of the Civil Code. According to this proposal, authority exists when (abc test):
- The work is performed under work-related direction by the employer; or
- Labor or the employee are organizationally embedded in the employer's organization; and
- The employee does not perform the labor at his own expense and risk
Next, the bill proposes to add a third and fourth paragraph to Section 7:610 of the Civil Code. This contains a statutory ranking of this abc test and the possibility of clarification of the terms and weighting factors by AMvB.
Finally, a new article (7:610aa Civil Code) is proposed that contains a legal presumption: when a worker earns less than €32.24, there is a presumption of an employment contract. The legal presumption can be invoked by the worker (or his representative). This is a refutable legal presumption. Thus, an employment contract does not automatically arise, but the worker can invoke the presumption of employment in the event of a rate below the standard and more easily claim an employment contract (with his or her own employer and, if necessary, through the civil courts). It is then up to the employer to disprove that legal presumption.
Opinions from society
The Internet consultation of the bill was opened on Oct. 6. The Internet consultation closes on November 10, 2023. So far, the responses are mostly negative. Zzp 'ers and their interest groups find the bill "vague," "legally complex" and unworkable. They also fear that the law will make clients more cautious about hiring self-employed workers.
According to a Knab poll of over 200 zzp'ers, 80% of zzp'ers do not support the bill. The bill ensures that the qualification of the employment relationship is done per assignment instead of on a personal level. Many self-employed persons fear that they will only be able to continue to perform their assignments partially - or not at all - as self-employed persons. Regarding the legal presumption of the hourly rate, 50% agree with the proposal. However, they think the rate should be €50 instead of €32.24.
In short, the bill aims to create more clarity in the assessment framework of the employment relationship in order to prevent false self-employment and protect workers. However, reactions to the proposal have so far been predominantly negative. Instead, there are fears of more ambiguity and less employment for self-employed workers.
