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Temping contracts

Temping contracts

Temping contracts

There is a reason why temping contracts are popular. The main advantage is that they offer the opportunity to deploy the temp worker flexibly without having to take redundancy protection into account. On the other hand, legislation has set a few limiting conditions to the use of temping contracts. One of the characteristics of temping contracts is that the employee's employment protection increases as s/he is employed longer.Article 7:690 of the Dutch Civil Code defines the temping contract as follows: The temping contract is the employment agreement whereby the employee is outsourced to a third party by the employer to perform work in accordance with a job assignment provided to the employer by the third party under the supervision of the latter."

The temping clause

The main legal consequences of temping contracts are listed in Article 7:691 of the Dutch Civil Code. The crucial one is that, during the first 26 weeks of the temping relationship, the temp agency does not have the right to terminate the agreement immediately after the outsourced worker has ended his third-party job. If the time between the periods worked exceeds one year, the counting starts all over again. The temping agency must have included a clause to this effect in the employment contract with the temp worker in order to have the right of appeal. When the 26 weeks are over, the employment contract for a definite period will, by law, become an employment contract for an indefinite period, when it is extended after a period of three years or when it is extended for the fourth time during this period. Some crucial exceptions apply; these relate to the Collective Labour Agreements Act. Temping agencies have put these opportunities to full use.

The main collective labour agreements for the temping sector are the CAO-ABU (of the Algemene Bond Uitzendondernemingen, General Association of Temping Agencies) and the CAO-NBBU (of the Dutch Union of Employment Brokers and Temping Agencies). Roughly, it is assumed that, because of a binding statement of the Dutch Minister of Social Affairs, the CAO-ABU shall be or declared to be applicable when no other collective labour agreement applies and the temp worker is employed by a professional temping agency for which the major part of the employees is working and outsourced on the basis of temping contracts.

The stages

In case of applicability of the CAO-ABU, the maximum duration of the Stage A is 78 weeks worked (contrary to the legal first period of 26 weeks). In Stage A, the temping contract may effectively be terminated at any time, as soon as the client completes his assigned job. When the break between jobs has lasted for a period exceeding 26 weeks, Stage A will start again from the beginning. In case of illness, the temping agency is not obliged

to continue of pay salary; however, it does have the obligation to supplement the sick pay the temp worker receives under the Dutch Health Law to 91% of the salary for a period of 52 weeks.

When the CAO-ABU applies, Stage B will start as soon as Stage A ends. Stage B may last for a period of 2 years or 8 employment contracts. If the break between jobs has lasted longer than 13 weeks but less than 26 weeks, Stage B will start again from the beginning. All individual employment contracts that are concluded must be contracts for a definite period of time and they may not include temping clauses. This means that the employment contracts can no longer be terminated intermediately. During illness, the temping agency is obliged to continue to pay the temp worker for the remaining time of his/her employment contract. If there is no more work, the temping agency is obliged to continue to pay the temp worker for the remaining time of his/her employment contract.

As soon as the temp worker has completed stages A and B, he will automatically enter stage C when the CAO-ABU collective labour agreement applies. Effective from this moment there will be an employment contract for an indefinite period of time between the temp worker and the temping agency. This means that the temp worker has full legal employment protection as of that time.

Termination

All this does not mean that it is impossible for a temping agency to terminate the employment agreement concluded with the temp worker, or to terminate it intermediately. In its capacity as an employer, the temping agency has the right to ask the district court to annul the employment contract because of changed circumstances or for compelling reasons.

The temping agency may also apply with the CWI for a dismissal permit. The CWI will test the application against Appendix B to the Termination of Employment Act. In essences, the provisions are that the temping agency must be able to prove that it has actively looked for other fitting work but to no avail. Relative to the duration of the standing employment agreement, the temping agency must do its best for a longer period of time (up to 4 months) to find other fitting work.

Latent problems

In practice, many legal problems arise when the party to which the temp worker is outsourced wants to take over the temp worker; this means that the first 26-week period immediately lapses. Also, there are many situations at the change from one stage to a next stage offering more legal protection, whereby the temp worker has built up more legal protection than was assumed. Many problems also arise when the temp worker is ill, particularly due to reintegration obligations not being entirely clear.

In case of a dispute or an impending dispute, we will ask you for, at the least, the following documents:

  • All temping contracts concluded in writing;
  • All salary specifics provided during at least the previous three      months;
  • All correspondence between the parties;
  • Any action plans and/or reintegration reports and/or reports from the      industrial medical officer or company medical officer.

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