Recent Developments in Dutch Labour Law

One of the main changes is the introduction of a minimum hourly wage. Previously, the minimum wage was calculated on a monthly, weekly, or daily basis, uniformly for all employees, leading to discrepancies among different sectors due to variations in standard workweek hours. The new system, which mandates a minimum wage of EUR13.27 per hour, aims to bridge this gap and ensure equitable pay, regardless of the workweek length. This shift is not only beneficial for employees in terms of fair compensation but also impacts overtime and allowance calculations. However, employers must be vigilant, as non-compliance with the new wage standard will result in penalties from the Dutch Labour Inspectorate.

Another notable revision concerns the 30% rule related to extraterritorial expenses. Starting from 1 January 2024, the application of this rule is now limited to the remuneration norm for top officials as per the Wet normering topinkomens (WNT norm), often referred to as the “Balkenende norm”. This change, which caps the flat-rate expense allowance, has implications for both employers and employees, particularly affecting net income and tax obligations. Clarity in employment contracts regarding the allocation of these expenses is now more crucial than ever.

2023 saw the Dutch House adopt a bill mandating firms with over ten employees to designate a confidential adviser. This aims to curb workplace misconduct and enhance safety for all staff. The legislation outlines the fundamental responsibilities of these advisers and bolsters their legal standing in companies. The Dutch Senate is currently deliberating the bill.

In the landmark decision of 22 September 2023, the Dutch Supreme Court addressed the intricate boundaries of an employer’s duty to inform employees about regulatory changes that could significantly impact their fiscal obligations.

This case involved two Swiss-based KLM pilots who faced substantial additional income tax assessments due to a modification in the Netherlands-Switzerland tax treaty. The pilots contended that KLM, under Article 7:611 BW, should have informed them about this change. Initially, the lower court acknowledged KLM’s partial responsibility, citing its duty as a substantial employer with a dedicated tax department to alert employees about potential severe financial consequences of treaty changes. However, it also noted the pilots’ own responsibility as taxpayers, limiting KLM’s liability to 50% of the damages.

Contrastingly, the appellate court absolved KLM of any violation under Article 7:611 BW, emphasising that employees, especially those residing abroad, bear the responsibility for their tax obligations. The court ruled that KLM had no advisory role in such matters.

The Supreme Court nuanced this view, recognising that while employers generally do not have an advisory role in their employees’ tax obligations, circumstances might necessitate informing employees about relevant regulatory changes, particularly when these changes also affect the employer’s payroll tax duties. This obligation is akin to the “kelderluik criteria” used in unlawful danger settings, previously applied in Article 7:658 BW cases (Bayar/Wijnen), and hinges on factors like the foreseeability of danger, the potential for damage, and the feasibility of preventive measures. This decision highlights the varying degrees of an employer’s information duty, which can range from mere notification to active warning, depending on the specific circumstances. The Supreme Court’s stance underscores the necessity for tailored approaches in employer-employee communications, introducing a degree of legal uncertainty but emphasising the importance of context in determining the extent of the employer’s informational obligations.

Additionally, adjustments have been made to the work-related expense scheme. Effective 1 January 2024, the tax-free space in this scheme has been reduced from 3% to 1.92% of the first EUR400,000 of total salary. This reduction limits the scope for employers to provide net reimbursements and necessitates careful management to avoid the steep 80% final levy on excess reimbursements. Beyond these changes, recent case law has brought to light the issue of work and working time definitions. Specifically, rulings by the Subdistrict Court in Haarlem have clarified that mandatory attendance before the official start of a shift must be considered as working time. This interpretation, particularly relevant in sectors like industrial and service, has significant financial implications for employers, as it mandates payment for this additional time, including holiday allowance and potential legal reimbursements.

In a notable legal development, the Hague Court of Appeals recently addressed a critical question in employment law: Should the ten minutes employees are required to be present before starting their shift, as per their employer’s scheduling rules, be considered paid working time? This query arose from a case involving a call centre employee who sought remuneration for the ten minutes per day he was mandated to be present before his shift over a five-and-a-half-year period. During these minutes, he was required to log into ten different programs before accessing the calling system. The court, affirming the decision of the lower court, ruled that this login time indeed constituted working time and therefore should be compensated.

The ruling aligns with similar decisions in other cases. For instance, in 2020, the Roermond District Court held that failing to comply with an employer’s requirement to be present ten minutes before work does not justify immediate dismissal. Moreover, the Alkmaar District Court in the same year ruled that time spent by supermarket employees waiting to leave the premises collectively after closing should be counted as working time.

Interestingly, the call centre has appealed to the Supreme Court, so further developments might be reported in the 2024 or 2025 annual reviews. In a related case at the same call centre, a teleworker who logged in ten minutes before and 15 minutes prior to their shift argued that this should also be regarded as working time. However, the court disagreed, citing the differences in the work environment and the autonomy the employee had in managing their pre-shift time at home. This decision emphasises the nuances in employment law regarding working time, especially in remote working situations.

In conclusion, the recent amendments and judicial interpretations in Dutch labour law mark a pivotal shift, emphasising fair compensation and clarity in employment terms. Employers must stay informed and adapt their policies to comply with these changes to avoid legal repercussions and ensure a harmonious workforce.