DOING BUSINESS IN THE EU


Doing business in the EU

10 Issues raised at the hearing on the Dutch Work and Security act in the Dutch Second Chamber, 03-02-2016

Dutch Managers must decide if they are going to follow the easy or the difficult route with the management of the Work and Security act. The easy route may seem difficult and expensive in the beginning, but the benefits that it will yield in terms of personnel engagement and labour relations can not be overestimated.

Easy:

Insure that sound Human Resource practices are in place. If the company does’t have the expertise, involve somebody that have the knowledge. Identify poor performance, poor conduct and disputes as early as possible and handle it before it became critical. See your personnel as human capital, provide them with quality skills and invest in quality career opportunities in the company.  Personnel with quality skills have a better chance to receive permanent employment.

Difficult:

Ignore personnel problems and mainly focus on the performance of the company. Have the management style of: either an employee fits in or he’s out. Then transfer the problem to a labour lawyer, the UWV or a judge. As indicated at the hearing in the Second Chamber, the external procedure is expensive and complicated.

Dutch employers were spoiled in the previous Labour Law dispensation where courts and other third parties solved their personnel problems.

Evert Verhulp, professor in Labour Law at the Universty of Amsterdam hit the nail on the head that the new Dutch Labour Law dispensation relating dismissal is an improvement because it forces employers to handle personnel issues with care. He believes that the stricter approach used by UWV and courts in the evaluation of the employment record of the employee and steps taken by the employer is logical because employers must have effective personnel policies in place.

I agree with prof. Verhulp that although there is teething problems with the Dutch Work and Security act it will lead to improved labour relations.

Issues raised at the hearing on die Dutch Work and Security act that are important for Dutch managers:

  1. The situation of employees improved with the new dismissal legislation as it is more fair for the individual worker.
  2.  The new dismissal procedure is less expensive relating to compensation but more complicated for employers.
    • The question must be asked why is the new system seen as complicated:
      • Is it because it is a new procedure?
      • Is the employer not equipped to manage the new procedure? Then re-training is the solution.
      • Is the employer not prepared? Pro-active Human Resource practices must be implemented.  
  3.  The new dispensation did not improve the situation of temporary workers. Employers are now scared to employee employees permanently.
    • Is this a valid perception on the side of employers?
    • Is this perception not the result of ill-informed and unprepared employers?
    • Is it really risky to employ quality workers in quality jobs?    
  4. The remark was made the perception exists that permanent employment is something of the past, but there is still a need for permanent employment from the side of the workforce.
  5. That different sectors have different issues with the new legislation. Medium and small companies experience more difficulties.
    • The reason for this tendency is that larger companies have Human Resource and Labour Law expertise on board. Human Resource Management expertise is as critical as Information Technology expertise in a company. Where management doesn’t have the HR and Labour Relations expertise, an outside consultant must be involved. 
    • Re-training of managers may be necessary, sound Human Resource practice is as important as sound financial management. 
  6. There is a trend of silent employment contracts (slapend dienstverband) where an employer does not formally end the employment relationship after a long term ill employee received remuneration for 24 months.  The reason for this is that if the employment contract is ended after 24 months the employee is also entitled to a transition benefit.
    • The solution may be that a long time ill employee that received remuneration longer than 12 months is not entitled to a transition benefit.
    • Minister Asscher indicated the intention to reduce the period that a small company must remunerate an long term employee from 24 to 12 months.
  7. Some delegates recommended that the scope of a judge in dismissal cases must be extended to include other reasons to end the employment contract other than the prescribed (permitted) reasons. This will enable judges to to consider all the facts where it is clear that the employment relationship is not reparable.
  8. The issue that a judge can award a higher compensation as the prescribed transition benefit was discussed. The reason for the stipulation is to allow the judge to consider every dismissal case on it’s own merits. Some delegates have the opinion that there must be a guideline for judges in terms of figures.
  9. Some delegates felt the two (2) months limit that a employee must approach a court for relieve in dismissal cases must be extended.
  10.  The general viewpoint was that it is premature to declare the the new labour law dispensation as unworkable and ineffective.

 

 

 

 

 

 

 

Andre Beukes LLM

Andre Beukes LLM

I am an International human resources consultant to multinational companies in international employment law and employee relations.

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