Information by Eric van Dam
As from 1 March 2020, employers in countries other than the EEA and Switzerland who want their employees to work temporarily in the Netherlands will be required to report this in advance via a Dutch Ministry of Social Affairs and Employment online notification desk. Self-employed persons who want to work in the Netherlands on a temporary basis will also have to file a notification.
Posted Workers in the European Union (Working Conditions) Act (WagwEU)
This notification requirement is prescribed by the Posted Workers in the European Union (Working Conditions) Act (WagwEU), which protects temporary foreign employees who work for a foreign employer and combats unfair competition based on terms of employment. Such employees are in any case entitled to the most important terms of employment under Dutch employment law, such as a minimum wage, minimum rest periods and holidays, safe working conditions and equal treatment.
Who will this notification requirement apply to?
The new notification requirement will apply to the following companies and persons in the EEA (all EU Member States and Norway, Liechtenstein and Iceland) as well as Switzerland:
- self-employed persons and employers who come to the Netherlands with their own staff;
- multinationals that second employees from their own companies to the Netherlands; and
- agencies that send temporary employees to work in the Netherlands.
The contracting parties/clients of these companies and persons will be required to verify whether this notification has been made, and if so, whether it is correct. As soon as the contracting party or the client has filed a notification, it will receive a message which it can then check online and report any inaccuracies.
]]>The EU is deeply concerned about the rights of EU citizens in the UK after Brexit.
EU MEPs raised concerns after a senior UK minister suggested EU citizens could face deportation if they fail to secure settled status in time.
Last week in the European Parliament in Strasbourg MEPs endorsed a resolution on the issue which calls for the protection of citizens’ rights after Brexit.
According to Philippe Lamberts ( BE, Greens/EFA) are there three million EU citizens in the UK that may lose their rights after Brexit.
There is also 1.5 million Britons living in mainland Europe.
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]]>To acquire a registration address from a Business Center that provides Virtual Offices is a cost-effective option. Virtual offices are already professionally set up and staffed to allow a company to move right in and hit the ground running with their operations. The service provides a postal address, receives the post and provides the option that the post can be e-mailed to the company in pdf format. There is also the possibility to rent a workspace and meeting rooms as needed.
However according to the Dutch Chamber of Commerce and the Tax Administration is a Virtual Address, not an accepted business address. A post box address is also due to the favourable Dutch tax dispensation not allowed as an official business address.
When a company use the address of a multi-company business centre and the lease agreement states that the company has less than 40 hours a week access to an office the Chamber of Commerce may de-register the company.
Using a virtual address may not be a problem in the beginning , until the company receives the following letter: ‘Ambtshalve wijziging’ (‘official change’) or ‘Buitendienst’ (‘sales force’), ‘uw onderneming zal worden uitgeschreven uit het handelsregister’ (‘your company will be unsubscribed from the commercial register’). In the letter, they refer to Article 38 Handelsregisterwet (Commercial Registers Act), and that the Chamber of Commerce is investigating the company with the so-called ‘Bureau Economische Handhaving’ (‘Office Economical Guard’) or the Dutch Tax Administration.
The Dutch Chamber of Commerce and Tax Administration is lately very active in checking registration addresses.
A virtual office can still be an excellent starting point for a company if the following requirements are adhered to:
- The rental contract must include a workplace where an employee of the company can work permanently if he/she wishes. This means it is more than just a mailbox, the company can actually make use of a desk, telephone, internet, printer and a cabinet on a permanent basis.
- There is a reception desk where someone presents himself on behalf of the company.
There are in the Netherland several companies and Business Centers that offer packages where can acquire an address of registration and a workplace that complies with the mentioned conditions.
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When a company plans to expand into a new European market, finding the right employees to drive the venture is critical to their success. A company wishing to expand to Europe will be confronted by the choice whether to transfer expatriates from your existing operations into the new market or if it would be better to appoint local employees.
Many global companies try to launch with personnel from their parent company or decide to build a local team from scratch. According to Forbes this is time consuming, risky, and slows time to market. Using proven senior local executives allows the company to hit the ground running, quickly validate assumptions, and drive key readiness initiatives while the company hires the right senior management team. Headhunting the right executives with a deep expertise can save years of market development efforts.
Foreign companies have different options in acquiring personnel for the operation in the new market:
- To contract expatriates from the home company to work there for a certain period,
- Assign personnel on short or intermediate-term foreign postings,
- Sent employees on long-term business trips to work in the new operation,
- Transfer employees from the home company to the new country permanently,
- Utilise virtual employees
- To recruit domestic employees with the desired skills set.
In general, transferring an expat is more expensive and will cost an organization two to three times what the same employee would cost back home. A higher salary must convince an employee to work abroad, and immigration and tax-related issues must be managed. Training in the foreign language, basic cross-cultural skills is essential to the success of the expat. Housing and moving costs for the employee and family members must also be covered. Expats regularly find themselves burning out because of culture shock and the stress related to being away from home and family.
The lower cost is in hiring personnel locally is a major advantage because they can start working more quickly because they won’t have the time-consuming issues of relocation and immigration or visa status. The main advantage that local hires provide is a deep knowledge of the market, culture, language, government regulations and prevailing communication and work styles. To appoint a local key senior manager will bring a wealth of knowledge of the local market.
However to find the ideal local candidate to appoint can be difficult and expensive. Europe has a tight labour market and there is a shortage of key skills. Companies will also find that the labour costs in the EU may be significantly higher than in the local market. It is important that companies must understand the labour market of the country they enter and do recruitment in a way that fit culturally.
To assist companies to be successful fast in Europe, we provide a Head Hunting Service (Executive Search) that is an effective way to find the right candidate for a key managerial position.
Benefits of our Head Hunting process
- Confidentiality – Competitors will not know that the company is recruiting key personnel,
- Targeted – Only potential candidates with the desired skills set are targeted.
- Finally, we move much quicker and proactively compared to traditional recruitment consultants.
We personalise our engagement with each and every potential candidate. We understand that an untargeted approach will not appeal to an individual candidate. We also take into account the fact that while candidates may not be actively applying for new positions, they may be interested when potential opportunities are presented to them.
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Photograph: Etienne Laurent/AFP/Getty Images
The UK and Germany have unemployment rates roughly half that of France. Macron believes the country’s chronic mass unemployment will not decrease unless employers are relieved of the fear of unpredictable high costs if they fire employees.
Macron wants a ceiling on damages for unfair dismissal. At present, industrial tribunals known as prud’hommes often award substantial sums after years of costly procedure.
Macron also wants to reduce the number of groups representing employees within companies, which include at least three different types of committees.
In Brussels, Macron’s ability to reform the labour code is seen as a test of his credibility as a “European reformer”. Berlin, in particular, insists Macron put France’s house in order before he tackles European problems.
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International business is becoming borderless. European companies are finding new regions and tech hubs in which to start up, many of which have low rents, good quality of life, and a well-educated, highly experienced workforce.
European governments are doing all they can to create the very best environment for entrepreneurs. The Estonian government has gone even further – its e-residency is redefining what citizenship means in a digital world, whilst the Portuguese government has made Lisbon one of the globe’s most attractive places to start a tech company, including significant tax breaks for investments in the sector.
The e-Residency programme launched by the Government of Estonia
The Republic of Estonia is the first country to offer e-Residency – a transnational secure digital identity available to everybody in the world interested in running a location independent international business online.
- E-residents can:
- Establish and administer a company online
- Conduct banking online, e.g. make electronic bank transfers
- Have access to international payment service providers like Paypal, Braintree, etc
- Digitally sign documents (e.g. annual reports, contracts) within the company as well as with external partners
- Declare Estonian taxes online
All of this can be done in a cost-efficient and hassle-free way, without the need to hire any local director or representative (unless you want to, of course).
- E-residents receive a smart ID-card (eID) which enables secure digital authentication and the digital signing of documents. The digital signature and authentication are legally equal to handwritten signatures and face-to-face identification in Estonia and between partners upon agreement anywhere around the world.
- e-Residency card is not a physical ID-card or a travel document as it has no photo. Also, e-Residency does not entail citizenship, tax residency, residence permit or rights of entry to Estonia or the EU.
- Estonians have been using a secure state-issued digital identity and digital services for over a decade Our country is nicknamed e-Estonia, as we have become one of world’s most advanced digital societies. By providing e-Residency and opening up our services globally, Estonia is now moving toward the idea of a country without borders.
- The Estonian government launched e-Residency to make Estonia bigger: to grow their digital economy and market with new customers, there-by sparking innovation and attracting new investments. In addition, e-Residency makes life and business easier and more efficient for everybody who already have a business or other relation to Estonia.
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Creating a Dutch company can open completely new opportunities that will allow your business to take advantage of all the economic and legal privileges of the European Union. For example, to generate additional revenue, increase turnover and get a long-term visa or residence permit.
The advantages of European companies are:
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- A high level of suppliers’ and customers’ trust
- Opportunity to operate in the entire territory of the EU
- High level of the banking system development
- Favourable economic and political situation
- Minimization of legal risks
- Favourable tax system
- Treaty for the Avoidance of Double Taxation
- Opportunity to obtain a residence permit and citizenship of the EU.
The best countries in Europe to start a business
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Attractive place to live
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Competitive economy
Macro indicators
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The size of the economy
Millions of euros, Source: Eurostat, 2016.
Average income
US dollars corrected for Purchasing Power Parity.
Source: OECD, 2015.
Logistics performance index (2014)
The top EU countries in terms of the efficiency and effectiveness of its Customs and other border procedures, the quality of its transport and IT infrastructure for logistics, the ease of use and affordability of its shipping, and the level of professionalism.
Competitive taxation climate
Amongst countries in Western Europe, the Netherlands is the most attractive country for foreign companies looking to establish themselves in this part of Europe. This emerged from KPMG’s latest Competitive Alternatives survey into international business location costs faced by companies starting up in different countries. The survey is carried out by KPMG every two years.
As far as costs go companies get off cheapest in the Netherlands, followed by the United Kingdom and France. Within Western Europe, Germany is the most expensive country for starting companies.
Why chose the Netherlands?
The Netherlands is one of the five most competitive economies in the world. It has much to offer for foreign entrepreneurs and investors: for example, exceptional road, rail, sea and air infrastructure; digital infrastructure that is world-leading in terms of both speed and reliability; and a broad spectrum of (international) businesses with multilingual and productive employees. And besides the excellent business climate, there is the fantastic quality of life, with the Netherlands setting high standards in (international) education, healthcare and recreation.
With a competitive statutory corporate income tax rate in Europe—20% on the first €200,000 and 25% for taxable profits exceeding €200,000—the Dutch tax system has a number of attractive features for international companies:
A wide network of nearly 100 bilateral tax treaties to avoid double taxation and to provide, in many cases, reduced or no withholding tax on dividends, interest and royalties,
Clarity and certainty in advance on the tax consequences of proposed major investments in the Netherlands,
A broad participation exemption (100% exemption for qualifying dividends and capital gains), which is vital for European headquarters,
An efficient fiscal unity regime, providing tax consolidation for Dutch activities within a corporate group,
No statutory withholding tax on outgoing interest and royalty payments,
Favourable expat tax program with a 30% personal tax income advantage for qualified, skilled foreign employees.
Contact me today to discuss possibilities!
Contact me today to discuss possibilities!
andre@euffice.com
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The Dutch House of Representatives agreed on 28 March 2017 that the Act on minimum wage and minimum holiday allowance (Wml) will also be made applicable to contracts between a company and an independent service provider for services rendered for a specific period.
Independent service providers without personnel (ZZP) and freelancers are extensively utilised in the Netherland and there were recent Dutch Labour Law court cases of independent mail deliverers that were remunerated less that the prescribed minimum wage.
With this decision, the Dutch Government wants to end the avoiding of the payment of a minimum wage. About 50 000 contractors is will benefit from this
Exception
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]]>When it comes to the use of social media, works council co-determination can be triggered mainly under two aspects:
- Co-determination rights have to be observed when the employer wants to implement rules on how employees should behave at work (e.g. non-smoking policies, ethic and compliance rules or whistleblowing policies).
- Works councils have the right to co-determine if the employer wants to introduce »technical facilities« that can be used to monitor behavior or performance of individual employees (e.g. camera surveillance, telephone, email program, business software). This applies regardless of whether or not the employer really intends to monitor employees. The mere possibility for the employer to use the technical facility to draw conclusions on the employees’ behavior or performance would be sufficient to trigger co-determination.
In the context of social media, we need to differentiate between a situation in which the employer wants to establish rules for the employees’ use of social media and a situation in which the employer himself uses social media.
Has the works council co-determination rights with regard to social media guidelines?
Today, many employers decide to set rules for employees to safeguard a responsible use of social media by establishing social media guidelines. But employers generally cannot give binding directions aimed at the employees’ private use of social media. Where the employer can only give recommendations, there is also no room for works council co-determination.
Therefore, as a general rule, co-determination rights only exist in connection with rules for the employees’ use of social media in a business context and only with regard to employees who do not work with social media as their main contractual duty (e.g. the Social Media Manager of the company).
What about the setup of the employer‘s own Facebook or Twitter account?
One would assume that a company’s Facebook (or Twitter, LinkedIn …) account does not qualify as »technical facility that can be used to monitor behavior or performance of individual employees«, the implementation of which, as explained above, would trigger works council co-determination.
But a recent decision of the German Federal Labor Court shows that this actually depends on the technical possibilities of the site the employer is using. On 13 December 2016, the German Federal Labor Court had to make a decision on the following case:
The employer in question operates blood donation services. In 2013, the employer opened a company Facebook account and decided to give other Facebook users the technical possibility to post comments on a virtual pin-board. Some of the blood donors posted critical remarks on individual employees working for the company. As a reaction to this, the company’s works council demanded that the employer should switch off his Facebook page.
While the Regional labor court of Düsseldorf as the court of second instance had ruled in 2015, that a Facebook account is not a »technical facility of the employer« that would need co-determination, the German Federal labor court took a different view and ruled as follows:
»If the employer publishes visitor postings on his Facebook page and these postings refer to the behavior or performance of individual employees, the configuration of this technical function is subject to works council co-determination.«
The decision raises important questions, e.g.:
Could the works council demand from the employer to switch off the company‘s client relationship system (CRS) and only switch it on again after having concluded an agreement on the use of the CRS with the works council? Is it still possible to publish a company email address on the company web page, which customers can use to address their questions and to give feedback, without previously reaching an agreement on the use of this email address with the works council?
The written opinion of the Federal Labor Court’s decision is not yet published. But since the co-determination procedure with a litigious works council can take several months in Germany, employers may have to start thinking about a fall-back scenario for their customer relationship management.
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Several international corporations have established branches in Estonia and the number of such branches is expected to grow in the future. Therefore it is apparent that the matters of applying the Estonian labour law to alien employees need to be explained in a short format.
If an Estonian employer is planning to employ an alien, both parties should consider that:
a) Estonian labour law applies to alien’s employment in Estonia, and
b) the Police and Border Guard Administration (PBGA) may intervene in relations between the employer and employee in order to prescribe requirements for the alien’s employment in Estonia, but only in limited extent. If the PBGA’s decision to grant residence permit prescribes additional requirements not expressly stated by the law as compulsory, then it would probably be reasonable to analyse whether the PBGA is intervening too much in the employer-employee relations with such requirements.
The courts unanimously declared that the Estonian labour law regulations apply al[sg_popup id=”1″ event=”onload”][/sg_popup]so to alien employees. The Aliens Act (AA) does prescribe some special provisions, but the applying of those provisions does not in any way prejudice the applying of the Employment Contracts Act (ECA). The Supreme Court also stressed that although the PBGA may prescribe the conditions for an alien’s employment in Estonia with its decision of granting residence permit, the PBGA does not have unlimited options in doing so.
Source: Ramil Pärdi
]]>The recent judicial decision demonstrates that conclusion of an agreement on compensation for damages, caused by an employee, involves risks because the employee may subsequently be released from this commitment. A more secure way of getting compensation for damages is to submit a respective claim to the labour dispute committee or a court of law.
Eversheds Sutherland (International) LLP
In the opinion of Rando Maisvee the recent decision of the Supreme Court is yet another example of how the currently effective Employment Contracts Act affords employees better protection than the previous more formal Act. Thus, for instance, the judgment of the Supreme Court passed on 30.11.2010 based on the previous Act leads to conclude that an agreement entered into upon the termination of the employment contract does not constitute a part of the employment contract, and that the limitations stemming from the Employment Contracts Act do not apply to such agreement; essentially this means that under the previous Act it was possible to agree on compensation for damages, while the new Act does not provide this option.
Employers should take into consideration that
- The possibility to claim compensation for damages under an agreement is limited.
- Damages can be compensated under an agreement if the agreement is signed after the employment contract has terminated; however, in real life, it is very difficult to conclude such agreement with the employee.
- Damages can be compensated under an agreement if before the damage was caused the parties have signed a proprietary liability agreement, which includes, inter alia, the obligation to pay the employee a compensation.
- An employee may be charged interest on arrears only at the rate set forth by law, which currently stands at 8% per annum.
- In the opinion of the Supreme Court, the Employment Contract does not give the employer a possibility to claim compensation for collection costs, and therefore the employers are in a disadvantaged situation in this respect as well.[sg_popup id=”1″ event=”onload”][/sg_popup]
Both cases concern Muslim women employees who work(ed) in private companies.
In the first case, Ms Achbita worked already for three years for the Belgian branch of G4S before she decided to wear an Islamic headscarf, as a consequence of which she was dismissed. G4S argued that this was not in accordance with their company neutrality policy, which they introduced only after Ms Achbita made clear that she wanted to wear a headscarf. In the second case, Ms Bougnaoui was already wearing a headscarf at the time she was hired as an engineer by the French company “Micropole”. After complaints of customers, however, she was asked to remove her headscarf which she refused and as a consequence faced dismissal as well.
In the second case, Ms Bougnaoui was already wearing a headscarf at the time she was hired as an engineer by the French company “Micropole”. After complaints of customers, however, she was asked to remove her headscarf which she refused and as a consequence faced dismissal as well.
In the case of Ms Bougnaoui, the European Court of Justice finds a direct discrimination on the ground of religion, since the employer’s decision was not based on a general neutrality policy of the company. The customers’ wish not “to have the services be provided by a worker wearing an Islamic headscarf” could not be considered as a ‘genuine and determining occupational requirement’.
In the case of Ms Achbita, however, the Court finds no discrimination. It considers it legitimate to dismiss an employee when a company has a policy of political, religious and philosophical neutrality in relation with both public and private sector customers.
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Since the introduction of the Dutch Work and Security Act, employers can end the employment relationship without the permission of the Dutch Employee Insurance Agency (UWV) upon or after reaching the pensionable age (Article 7:669 paragraph 4 Dutch Civil Code).
The employer is not required to pay any transitional compensation (Article 7:673 paragraph 7 sub b Dutch Civil Code) if the employee reached pensionable age.
The pensionable age is the age at which the employee becomes entitled to state pension (AOW), or any other (deviating) pensionable age as was agreed on by the employer and employee.
That age will often be the age of entitlement to state pension, but it can (if this is objectively justified under the Equal Treatment in Employment (Age Discrimination) Act) be lower than the age of entitlement to state pension, in which case notice of termination can be given at this lower age. The age agreed between the parties can also be higher than the age of entitlement to state pension, in which case notice of termination can only be given when this higher age is reached.
Another important requirement is that the employment contract must have commenced (instead of entered into) before the employee has reached the age of entitlement to state pension or the agreed other age. This means that the above-explained no compensation termination option will not be available if the employment contract has commenced after reaching the age of entitlement to state pension or the agreed other age. This change is relevant to the question of whether a pension dismissal clause should be agreed on.
Where the employment contract of an employee ends as a result of the pension dismissal clause, a new employment contract comes into effect if the employee continues working. The new employment contract has by definition commenced after the age of entitlement to state pension or the agreed other age and the employer can not utilize the no compensation termination option. The employer may offer the employee three fixed-term contracts that end by operation of law. From 1 January 2016, the employer can even offer six contracts within a period of 48 months.
Source: Marjolijn Lips
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Extract
An employee who’s employment was ended by the employer, requested a transitional allowance from the employer. The employment lasted exactly 24 months.
According to Section 7:673 subsection 1 of the Dutch Civil Code an employee has the right to a transitional allowance if the employment relations lasted at least 24 months.
In this Dutch Labour Law case, the employer interpreted Section 7:673 subsection 1 of the Dutch Civil Code as that the employment relation must have lasted longer than 24 moths and the employee is not entitled to a transitional allowance.
Finding
The judge found in the Dutch Labour Law case that the employer misinterpreted the stipulations of Section 7:673 subsection 1 of the Dutch Civil Code. The article stipulates that the employment relation must have lasted at least 24 moths and that the employer is entitled to a transitional allowance.
Good to know
- Until 1 July 2015, the amount of the redundancy package was calculated with the so-called kantonrechtersformula. Transition allowance was introduced for employees who were employed for at least 2 years by the employer for whom the employee was working.
- The transition allowance is calculated as follows: on the first 10 years of employment, the employee receives 1/6 of the monthly salary per 6 months. With an employment relationship that is longer than 10 years, the employee receives 1/4 of the monthly salary per 6 months. Employees older that are 50 years or older and at least 10 years employed by the company will receive 1/2 of the monthly salary for each period of 6 months after you reached the age of 50. The maximum transition allowance is € 77,000 (figure 2017) or 1 annual salary if that is higher. For the calculation, the employment period is rounded down on 6 months.
- In the case of very serious culpable act on the part of the employer, the Court can award the employee an additional compensation.
RECHTBANK LIMBURG
Case: 5664602 AZ VERZ 17-8
Finding: 09-03-2017
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Tags: Dutch Labour Law, transitional allowance, Section 7:673 1 of the Dutch Civil Code
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