Period in which collective labor agreement for temporary workers is not declared generally binding

A generally binding declaration means that all parties in the sector are obliged to comply with the collective labor agreement applicable to that sector.

The collective labor agreement parties – i.e. the sector organization together with the trade unions – have submitted a request for extension of the General Binding Declaration to the Ministry of Social Affairs and Employment as of 1 December 2023.

However, since no decision has yet been taken on that request, this means that a so-called AVV-free period applies for now. That means that it is currently no longer mandatory for every temporary employment agency to apply the Collective Labor Agreement for Temporary Employees. For ABU and NBBU members this does not has any consequences and as such does not entail any changes. They remain bound by the collective labor agreement through their membership and can continue to make use of the collective labor agreement.

Temporary employment agencies that are not members of the ABU or NNBU are no longer bound by the collective labor agreement on the basis of the AVV. However, these non-members may still be bound by the collective labor agreement on the basis of the employment contract, when it has been agreed in the employment contract that the collective labor agreement for temporary workers applies. Two situations might be applicable in that regard:

• Employment contracts concluded during the AVV period (i.e. before January 1, 2023), and;
• Employment contracts concluded after the AVV period (i.e. after 1 January 2023.

In principle, for employment contracts (including extensions) concluded after 1 January 2023 certain deviations from the Dutch Civil Code which the collective labor agreement for Temporary Workers made possible for, no longer apply for non-member companies. An overview of some important not applicable changese, below:

1. Wage

The hirer’s remuneration no longer applies. The terms and conditions of employment following from article 8 WAADI will then become applicable. In summary, this means that if an employer makes workers available (i.e. as a temporary employment agency does), he owes these workers wages and allowances in accordance with the wages and allowances that are awarded to employees who work in equal or equivalent positions in department of the company where the posting takes place. As a result, more vacation days can be granted at once, or bonuses and a different pension scheme may apply.

2. Phase system

As soon as the AVV has ended, the statutory provisions of Article 7:691 of the Dutch Civil Code and the period and chain system (Article 7:668a of the Dutch Civil Code) apply. This means that a temporary worker can only be made available to one or more clients within 26 weeks. After that, the period and chain system applies. From that moment on, 3 fixed-term contracts can be entered into with the temporary worker, for the maximum combined duration of 36 months.

If the work is continued afterwards, the employment contract will be for an indefinite period. Incidentally, if there is an interruption of more than 6 months between two contracts, the counting of the period and chain system starts again. Only after a whole year has not been worked for the same temporary employment agency may the current flexibility of 26 weeks worked be used again.

3. Notice period

The standard notice period for the employee is one month. The employer must observe a notice period that depends on the length of employment:

1. one month, if the employee has been employed for less than five years;
2. two months, if the employee has been employed for more than five years and less than ten years;
3. four months, if the employee has been employed for more than fifteen years,
4. three months, if the employee has been employed for more than ten years, but less than fifteen years;

The notice period is a minimum term, so a longer notice period may be observed, as long as the conditions of the law are met. In the case of a temporary employment contract, a notice period is only valid if there is an ‘interim termination clause’, i.e. the possibility to terminate the employment contract prematurely. If this is not included, it means that the employment contract cannot be terminated. If an employment contract is terminated by means of a settlement agreement, the notice period does not apply.

4. Agency clause

The end of the AVV means that the agency clause loses its force the moment the temporary agency worker has performed work for more than 26 weeks (in accordance with Article 7:691 paragraph 3 of the Dutch Civil Code). This means that after 26 weeks the broadcast is null and void and the agreement is therefore null and void from that moment no longer automatically ends when the client terminates the provision. The temporary agency worker is also bound by a notice period after 26 weeks.

The negotiation results for new collective labor agreements have already been achieved and the request for the AVV has also been requested as of 01-12-2022. It is also to be expected that the Minister of Social Affairs and Employment will again declare the collective labor agreement generally binding, but it is not clear when that decision will actually be taken.

Please contact us for more information or questions about the above.