Movement in the flexible labour market: important changes in the hirer’s remuneration & equalisation of employment conditions for temporary agency workers/seconded workers
For whom are the changes relevant?
With effect from 30 December 2019, hirers of personnel, temporary employment agencies – always including secondment companies – and temporary agency workers / seconded workers covered by one of the temporary employment CLA’s will be faced with significant changes in the hirer’s remuneration and with a single, harmonised temporary employment CLA.
Due to the Dutch Balanced Labour Market Act, payroll employers and hirers of payroll workers will be faced with far-reaching changes from 1 January 2020 onwards. Read our blog on the Dutch Balanced Labour Market Act here. In addition, the hiring of payroll workers will no longer be covered by the temporary employment CLA’s with effect from 30 December 2019.
Harmonisation of ABU and NBBU CLA’s
Two different collective bargaining agreements apply in the employment agency industry: the ABU CLA and the NBBU CLA. If a temporary employment agency / secondment company is affiliated to employers’ organisation ABU or NBBU, then the corresponding CLA must be applied. If a temporary employment agency is not affiliated to ABU or NBBU, but the ABU CLA has been declared universally applicable, then the temporary employer is still obliged to apply it.
Currently, the ABU and NBU CLA’s still differ from each other in terms of, among other things, continued payment of wages during illness, the holiday workers’ scheme, vacation days, distribution of reserves and the training expenditure obligation. The ABU CLA still has its own remuneration system for specific groups that differs from the hirer’s remuneration.
As of 30 December 2019, it will no longer make any difference whether a temporary agency worker or seconded worker is covered by the ABU or NBBU CLA; the difference between the two CLA will have disappeared by then.
What was the hirer’s remuneration again?
The hirer’s remuneration is the applicable remuneration for workers employed by the client/hirer. The hired worker must be paid the same wage and allowances as the client’s/hirer’s own employees holding a position equal or equivalent to that of the hired worker. The hirer’s remuneration is usually higher than the minimum stipulated in the temporary employment CLA’s.
Dutch Posting of Workers by Intermediaries Act (Waadi)
The Waadi makes it possible to include clauses in CLA’s that deviate from the mandatory payment of the hirer’s remuneration. The NBBU CLA does not make use of this possibility, but the ABU CLA does: the ABU remuneration, which differs from the hirer’s remuneration, is used for some groups. For example, the ABU remuneration still applies to temporary agency workers in phase C who have a non-fixed-term secondment agreement. In the latter case, the supplier of personnel will have the option, until 30 December 2019, to apply either the ABU remuneration or the hirer’s remuneration.
Why is the hirer’s remuneration important for hirers of temporary agency workers, seconded workers and payroll workers?
In addition to the supplier of personnel, hiring companies are also responsible and liable for paying the hired temporary agency workers the correct wages and offering them the right employment conditions. This is based on the Dutch Labour Market Schemes Act 2015 (WAS).
The ABU and NBBU CLA both apply the phase system. This system determines what type of contract is possible. In summary, the three phases of the phase system are as follows.
|Phase||When||Type of contract|
|Phase A:||≤ 78 weeks worked||i) temporary employment contract with temporary employment clause|
ii) fixed-term secondment agreement
|Phase B:||≤ 4 years and/or|
≤ 6 secondment agreements
|fixed-term secondment agreement|
|Phase C:||> 6 secondment agreements||non-fixed-term secondment agreement|
Changes in the flexible labour market
We will explain the most important developments below.
Work experience rewarded
If a temporary agency worker transfers to another hiring company and/or temporary agency but retains his position, the accrued years of work experience will be carried over for the purpose of determining his salary scale and salary increments. Consequences:
- the temporary agency worker retains the same phase;
- because experience gained does not lapse, classification in a higher salary scale and allocation of salary increments are more likely to occur.
Improvement in hirer’s remuneration
The hirer’s remuneration will be supplemented with allowances for physically demanding circumstances, such as an allowance for working in the cold or an allowance for working with hazardous substances.
The aforementioned changes will come into effect on 1 September 2019. The following changes will apply from 30 December 2019.
Principal challenges in hirer’s remuneration as from 30 December 2019
- the hirer’s remuneration will apply to all temporary agency workers, seconded workers and holiday workers;
- even in the event of secondment from the one hiring company to the next, the hirer’s remuneration of the final hirer where the temporary agency worker / seconded worker is working will apply;
- temporary agency workers (phase C) who have been paid the ABU remuneration will automatically switch to the hirer’s remuneration on 30 December 2019;
- the travel allowance in place at the hiring company will be part of the hirer’s remuneration;
- the unsocial hours allowance and shift work allowance will constitute an integral part of the hiring company regulation;
- the wage definition will be harmonised; continued payment of wages during illness may be calculated over a higher base (with more wage components);
- as of 1 January 2020 (Dutch Balanced Labour Market Act), payroll workers will be excluded from the scope of the temporary employment CLA;
- a single scheme for continued payment of wages during illness:
- first year of illness -> continued payment of wages (90%)
- second year of illness -> continued payment of wages (80%).
- increase in holiday allowance from 8% to 8.33%.
End of ‘mini contracts’
Successive fixed-term temporary employment contracts with the same temporary agency and at the same hiring company which do not include a temporary employment clause can only be entered into for a period of at least 4 weeks (in phase A / 1-2). Consequences:
- repeated contracts for a week or even a day are no longer possible;
- the obligation to continue to pay wages during illness will last for at least 4 weeks;
- temporary agency workers will become less flexible and will have greater job security.
Promoting sustainable employability
The training expenditure obligation will be converted into an expenditure obligation for promoting sustainable employability. The obligation to spend 1.02% on sustainable employability will continue to apply.
Employers and trade unions want to make agreements about a new pension scheme for temporary agency workers before this year ends. To this end, a study into the effects of reducing the waiting time is currently being conducted together with pension provider StiPP.
Points for consideration
- The secondment company, temporary employment agency or payroll employer is usually responsible for determining the correct hirer’s remuneration. The hirer’s remuneration will be determined on the basis of, among other things, the information provided by the hiring company about the employment conditions in place at the company. Secondment companies, temporary employment agencies and payroll employers must therefore request their clients to provide all new data in time in order to determine the correct hirer’s remuneration that will apply from January 2020.
- Despite the fact that the hirer’s remuneration is determined by the supplier of personnel, the clients / hirers of temporary agency workers, seconded workers and payroll workers can also be held liable for payment of the correct wages directly by the hired workers. In order to prevent such claims, hirers of temporary agency workers, seconded workers and payroll workers would be wise to provide the relevant information to the secondment company, temporary employment agency or payroll employer in good time.
- Flexible workers are advised to request the hirer’s declaration from their employer (the supplier of personnel) in good time and to check whether it is correct.
Temporary employment contracts and/or secondment agreements = on-call contract?
On 1 January 2020, the Dutch Balanced Labour Market Act will introduce a statutory definition for the on-call contract:
the contract in which
(a) the scope of the employment relationship is not laid down as a set number of hours per unit of time, and
(b) the employee is not entitled to the wages for a given unit of time if he has not performed work.
Certain temporary employment contracts and secondment agreements will therefore qualify as on-call contracts as of 1 January 2020. This applies to:
- The phase A temporary employment contract which excludes the obligation to continue to pay wages or which lacks a fixed scope of employment.
- The phase A, B or C secondment agreement in which no fixed working hours have been agreed.
One of the consequences of this is that the temporary agency worker/seconded worker:
- is entitled to a minimum of three hours’ pay in the event of a call;
- cannot always be obliged to respond to a call (at least 4 days in advance);
- is entitled to wages in the event of cancellation of, or a change to, the call;
- may even be able to enforce a permanent contract with a fixed number of working hours.
After 12 months of employment, the temporary employment agency / secondment company is obliged to offer the worker a contract with a fixed number of hours, based on the average number of hours worked in the previous 12 months. As long as no offer has been made, the worker is entitled to payment of the average hours worked in the previous 12 months, even if the temporary employment agency / secondment company does not have any work available for him. If the temporary employment agency / secondment company does not pay, the flexible worker can turn to the hiring company for payment.
Impact of changes
The above is reason enough for hirers of personnel, and for temporary employment agencies / seconded workers to identify the impact of the changes on the organisation in good time, and to make the necessary adjustments to respond to the developments.
Would you like to know more about the upcoming changes and their impact on your organisation? We would be happy to inform and advise you on the matter.