Rutte III  and employment law

Rutte III and employment law

The recently presented coalition agreement for Rutte III also announces a number of interesting changes in employment law.

10 Oct 2017
Hylda Wiarda, Inge Arts

The coalition agreement for Rutte III shows us that a number of interesting changes in employment legislation are coming our way.

Easing of dismissal law

Even though the pre-emptive dismissal check will remain during Rutte III, the intention has been expressed to expand the grounds on which an employee may be dismissed. The WWZ (Employment & Security Act) has now listed the grounds for dismissal in a limitative manner and dismissal may currently be based on one ‘fulfilled’ ground only. Rutte III now intends to permit ‘mixing’ dismissal grounds. A valid dismissal ground could then for example consist partly of reasons of underperformance and partly on a disrupted work relationship. The much discussed ‘cocktail’ of dismissal grounds would then gain raison d’être after all.  

Amendment transition payment

Conversely, the court may in aforementioned circumstances award additional compensation to an employee, on top of the existing transition payment. This additional compensation can amount up to at most half of the transition payment. Moreover, it looks as if the reasonable compensation will also be continued, therefore possibly confronting an employer with three separate types of compensation.

The entitlement to a transition payment will no longer be limited to those employees who have been employed at least 24 months (or more) with an employer. In future, an employee will, from the start of his employment, be entitled to a transition payment in case of dismissal.

And finally, the calculation of the transition payment will be aligned for all employees.  Regardless of the length of employment, one third of the gross monthly salary will have to be paid towards the transition payment for each year of service. This means a decrease in the transition payment for employees who have been employed with the same employer for more than ten years.

Chain system fixed term contracts

The WWZ has limited the maximum duration of the chain of successive fixed term contracts to two years. The maximum number of contracts will remain three. According to Rutte III this has resulted in employees ending up without a job faster rather than obtaining an indefinite contract. For that reason, the maximum duration of the chain will be extended to three years.

The aforementioned measures are a strong indication that part of the changes implemented in the WWZ will be counteracted. 

Probationary period

A new element is the amendment of the maximum duration of the probationary period in a fixed term contract. The maximum duration of the probationary period in a first contract for an indefinite period of time will be set at five months, where the current maximum is two months. Fixed term contracts with a duration of more than two years may contain a maximum probationary period of three months.

Continued payment of wages during illness

On the issue of continued payment of wages during illness, adjustments will only be make for small employers, with less than 25 employees.

The period for obligatory continued payment of wages in case of illness will for small employers be reduced from two years to one year. The incapacitated employee however will retain his entitlement to two years of continued payment of wages, but the second year will be paid by the employee insurance agency (UWV). This is to be financed from uniform payment of contributions by the smaller employers. The dismissal ban in case of illness will – also for small employers - remain in place during the full two year period.

Partner leave upon the birth of a child

Bills presented earlier to expand on the partner leave were put on hold during the caretaker government period. In the coalition agreement these have now taken shape. As of 1 January 2019, partners will be entitled to five instead of the current two days of paid leave. As of 1 July 2020 a leave entitlement of five weeks is to be introduced, to be taken in the first six months following the birth of the child. During those five weeks, the partner will be entitled to payment by the UWV of 70% of his last earned wages up to a maximum of 70% of the maximum day wage.

Aside from paternity leave, adoption leave will also be extended from four to six weeks. The same applies to foster parents.

Naturally we will closely monitor any legislative changes in employment law resulting from the new coalition agreement. Whenever relevant we will inform you of the developments.