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Special considerations relating to traineeships

Special considerations relating to traineeships

Special considerations relating to traineeships

"A student has approached my company about a trainee placement. He is nearing the end of his course and wants a placement where he can get some practical experience.  In principle, I’m open to the idea of letting him do some of the more straightforward tasks around the company under my supervision. I’m even prepared to pay him a small amount. My worry is that he will refuse to leave at the end of the traineeship and try to argue that he has a right to stay under employment law. I’m also wondering whether he could say he was entitled to be paid the minimum wage.  Can I take on a trainee without running the risk of ending up being stuck with him permanently and having to pay him a full salary?"

The answer is yes, you certainly can, although at first glance the legislation might seem to be against you. However, you must give explicit consideration to a number of aspects described below.

Article 7:610 of the Dutch Civil Code defines an employment contract as “the agreement under which one party, the employee, engages himself towards the other party, the employer, to perform work for a period of time in service of such other party in exchange for payment”. If and when an employment contract has come into existence, you are bound by the statutory provisions applicable to employment contracts, including statutory protection against dismissal. In that case, you will also be obliged to pay at least the statutory minimum wage.

Main focus

At first glance the statutory definition would seem to imply that you will create an employment contract if you let the trainee perform work for payment under your authority. However, in 1983 the Dutch Supreme Court gave a judgment on this issue that.

distinguished certain trainee placements from an employment contract. The Supreme Court held that one of the requirements of an employment contract is that the work to be performed must be for the benefit of the other party. If, as may be the case with a traineeship, the work is of no value to the other party but is aimed at education and training, then the contract will not generally be regarded as an employment contract. In the case of a combined training and work placement, the question is therefore whether the main focus of the placement is on training or work.

In recent years, the Supreme Court has consistently taken the line that the important issue is “what the parties intended when they entered into the agreement, bearing in mind the way in which they have actually implemented the agreement in practice and, in so doing, given it substance. (…) In this context, no single aspect is decisive: the various consequences that the parties have elected to attach to their relationship should not be considered discretely but in the context of their mutual interconnection.” In other words, the explicit intentions of the parties when entering into the agreement carry significant weight, particularly if there are other factors pointing towards the same conclusion, such as the nature and method of remuneration.

Proper supervision and training

From a legal perspective, it is important that you actually have the trainee carry out activities focused on the training objectives that have been described in advance. If it turns out that when he carries out his activities the emphasis is on productivity instead, then the relationship is likely to be held to constitute an employment contract rather than a training contract. In this context it is also important that you offer the trainee proper supervision and training. Another important aspect is that it is explicitly stated that the remuneration you provide to the trainee is not meant to be a salary but primarily intended to cover expenses, with a small amount, in reasonable proportion to the payment as a whole, as payment for the work the trainee is expected to carry out. Finally, it is essential that the trainee joins with you in explicitly confirming, preferably in writing, that the purpose of the agreement is supervised learning. For added certainty, you can agree with the trainee that the agreement will be for a fixed period determined in advance, following which it will automatically terminate.

Special considerations relating to traineeships

"A student has approached my company about a trainee placement. He is nearing the end of his course and wants a placement where he can get some practical experience.  In principle, I’m open to the idea of letting him do some of the more straightforward tasks around the company under my supervision. I’m even prepared to pay him a small amount. My worry is that he will refuse to leave at the end of the traineeship and try to argue that he has a right to stay under employment law. I’m also wondering whether he could say he was entitled to be paid the minimum wage.  Can I take on a trainee without running the risk of ending up being stuck with him permanently and having to pay him a full salary?"

The answer is yes, you certainly can, although at first glance the legislation might seem to be against you. However, you must give explicit consideration to a number of aspects described below.

Article 7:610 of the Dutch Civil Code defines an employment contract as “the agreement under which one party, the employee, engages himself towards the other party, the employer, to perform work for a period of time in service of such other party in exchange for payment”. If and when an employment contract has come into existence, you are bound by the statutory provisions applicable to employment contracts, including statutory protection against dismissal. In that case, you will also be obliged to pay at least the statutory minimum wage.

Main focus

At first glance the statutory definition would seem to imply that you will create an employment contract if you let the trainee perform work for payment under your authority. However, in 1983 the Dutch Supreme Court gave a judgment on this issue that

distinguished certain trainee placements from an employment contract. The Supreme Court held that one of the requirements of an employment contract is that the work to be performed must be for the benefit of the other party. If, as may be the case with a traineeship, the work is of no value to the other party but is aimed at education and training, then the contract will not generally be regarded as an employment contract. In the case of a combined training and work placement, the question is therefore whether the main focus of the placement is on training or work.

In recent years, the Supreme Court has consistently taken the line that the important issue is “what the parties intended when they entered into the agreement, bearing in mind the way in which they have actually implemented the agreement in practice and, in so doing, given it substance. (…) In this context, no single aspect is decisive: the various consequences that the parties have elected to attach to their relationship should not be considered discretely but in the context of their mutual interconnection.” In other words, the explicit intentions of the parties when entering into the agreement carry significant weight, particularly if there are other factors pointing towards the same conclusion, such as the nature and method of remuneration.

Proper supervision and training

From a legal perspective, it is important that you actually have the trainee carry out activities focused on the training objectives that have been described in advance. If it turns out that when he carries out his activities the emphasis is on productivity instead, then the relationship is likely to be held to constitute an employment contract rather than a training contract. In this context it is also important that you offer the trainee proper supervision and training. Another important aspect is that it is explicitly stated that the remuneration you provide to the trainee is not meant to be a salary but primarily intended to cover expenses, with a small amount, in reasonable proportion to the payment as a whole, as payment for the work the trainee is expected to carry out. Finally, it is essential that the trainee joins with you in explicitly confirming, preferably in writing, that the purpose of the agreement is supervised learning. For added certainty, you can agree with the trainee that the agreement will be for a fixed period determined in advance, following which it will automatically terminate.

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