Senate accepts the Act Balanced Labour Market (WAB)

29 May 2019

Hylda Wiarda

Over the past months, we have kept you informed about the developments regarding the proposed changes in employment law, the so-called Act Balanced Labour Market. Last week, it was already clear that minister Koolmees, notwithstanding criticism and commentary, would probably find a majority of the Senate willing to accept the proposed bill. And this was in fact the case: today, the bill was officially accepted by the Senate.

This means that the WAB will (in all likelihood) take effect as per 1 January 2020, and employers will once again be faced with significant changes in employment law. These are – in a nutshell - the most important changes:

1. Easing of dismissal law

In addition to the eight existing grounds for dismissal, a ninth ground is added, allowing employers to come to a dismissal based on a sum of grounds, with the exception of the F-ground (conscientious objections). According to the legislator, this ground does not lend itself for cumulation. It should be noted that when using this cumulative ground, the employee can claim an additional payment of, at most, half the transition payment (in addition to the legal transition payment and any reasonable compensation);

2. Transition payment

With this Act, employees will from day 1 of their employment be entitled to a transition payment in case of dismissal. On the other hand, however, the height of the transition payment will always be calculated on the basis of 1/3 of a monthly salary per year in service (or a pro-rated part thereof). The increase currently in place for years of service over 10, will be cancelled. This also goes for the six-month rounding off;

3. Extension chain rule

This Act once again allows the possibility of three definite term employment contracts over a three-year period. The interval of six months remains in place. This six-month interval period may only by means of a cla be shorted to three months for seasonal labourers. An exception is also made for substitute teachers in primary education, who cover sickness absenteeism;

4. On-call employees

On-call employees are granted more rights and must, among other things, be called upon at least four days in advance and will retain their salary entitlements in case the call is cancelled within this period. In addition, the employer will each year have to make an offer for a fixed scope of work based on the average scope of work over the previous 12 months;

5. Payroll

Employees employed on a payroll basis will be entitled to the same employment conditions as employees employed at the same company, except with regard to pension. The special rules applicable to temporary employees will then no longer be applicable to payroll-employees;

6. Unemployment benefit premium

Offering employees an indefinite employment agreement will be beneficial for employers as the employers’ share of the unemployment benefits premiums will be lowered for those employees.

Undoubtedly, much will be written and said about this legislative change over the upcoming period. Naturally, we will keep you informed of further relevant developments.