A new judgement from the Netherlands Supreme Court has ruled that the factual details of an agreement between a worker and employer are decisive in establishing whether there is an employment contract rather than the parties' intentions as under previous case law.
In recent years, more and more people have become self-employed (whether through necessity or preference). This has also led to an increase in the discussions as to whether there is genuine self-employment or whether there was in fact an employment contract. Until very recently, the Groen/Schoevers judgment was used as a standard way of evaluating a contract, from which it was concluded that the intention of the parties to enter into a specific type of contract plays a (major) role in the assessment of whether or not there is an employment contract between the parties.
On 6 November, the Dutch Supreme Court handed down an important judgment on this question of assessing status. In it, the Supreme Court considered that this party intent is not (or no longer) relevant.
The individual involved in this recent case did 'participation work' (supported work for individuals with an occupational disability) on the basis of a so-called 'placement agreement' with the municipality of Amsterdam. She received a benefit (under the Participation Act) and worked as a service desk employee for the municipality for months. The aim was to increase her chances of returning to the labour market. However, partly because she actually did the same work as colleagues who had an employment contract, she also demanded an employment contract under s7:610 of the Dutch Civil Code.
Unlike the Subdistrict Court and the Court of Appeal, the Supreme Court ruled that the practical implementation of the agreement is decisive in establishing whether there is an employment contract, that is, what agreements on rights and obligations were made between the parties. Their intent plays no role in this. In the circumstance in this case, however, the Supreme Court did reach the same conclusion, namely that there was no question of an employment contract. This was because the rights and obligations that the parties had agreed in the placement agreement contract did not have the characteristics of an employment contract.
What does this mean in practice?
This judgment will be particularly important for the group of people who currently perform work for clients on a self-employed basis. Up to now, employers have often opted for a zzp (zelfstandige zonder personeel or 'independent with no staff') contract which explicitly states that the parties did not intend to enter into an employment contract, so the distinction between a zzp contract and an employment contract was clear.
However, the Supreme Court is now stressing that only the factual circumstances must be taken into account to determine whether an employment contract is involved. In short, if there is employment, pay and a relationship of authority, the relationship will qualify as an employment contract, regardless of whether or not this is what the parties had in mind. All the more reason to dust off the self-employed contracts once again and to critically examine them.
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