Benelux Employment Update – March 2023

When outsourcing to a self-employed service provider, it’s key to make sure the service provider is treated differently than company employees. The service agreement is not conclusive for the risk of fake self-employed, but rather the way this service agreement is implemented in the day-to-day practice.

Another important point is to assess whether the activity or division to be outsourced is transferred as a going concern to the new service provider, ie whether the activity’s/division’s operation is actually continued or resumed by the new service provider with the same or similar activities, and whether it has the possibility to continue its operation in a sustainable way after the transfer.

If so, the employees dedicated to this activity/division will in principle automatically transfer to the new service provider, even without their consent.

If a company’s activity is outsourced to an external contractor, this may trigger a transfer of undertaking (TUPE). Because of TUPE, all employees related to the company’s activity are transferred to the external contractor by operation of law. A works council should be consulted about the decision to outsource activities if it involves a significant downsizing or other change in the company’s operations.

If the external contractor is a self-employed person, the best way to prevent recourse to false self-employment is to contract a specialised and professional person who carries out the outsourced activity in a manner determined by himself and is not dependent on the company. The self-employed person should not be part of (or embedded into) the organization of the outsourcing company and should also do different work than company employees.

When outsourcing, companies should be aware of the risk of the operation being subject to the rules on the transfer of undertaking or of the risk of reclassification of “freelance contracts.”

Outsourcing may be a transfer of undertaking where the branch of activity taken over by the new operator constitutes, in itself, by its size, an undertaking, whose identity and activity are maintained.

If the rules on transfer of undertaking apply, all rights and obligations existing on the day of the change resulting from an employment relationship will remain in force between the new employer and the employees.

With regards to self-employed workers, the company should pay attention to the fact that they remain independent excluding any subordination relationship with the company (ie exercise of its power of control, direction and sanction on the worker) or they could be requalified as being real employees.

The Act Implementing the EU Directive on Transparent and Predictable Working Conditions (TPWC Act) came into effect in November 2022.

Before the TPWC Act, Belgian legislation already included substantial transparency safeguards, like working mandatory use of specific clauses in some contracts, imposing the obligation to confirm specific arrangements in writing before their application. So the TPWC Act did not really introduce major changes. The TPWC Act did add a general obligation to inform employees of individual and collective work conditions, urging employers to keep their contracts and work regulations up to date.

Employees can now also ask for an adjustment of their work schedule or workplace to support predictability and work-life balance. Employers are required to follow up and abstain from any retaliation.

Failing to comply with the above obligations is sanctioned by administrative or criminal penalties.

As per 1 August 2022, the European Directive on transparent working conditions has been implemented in Dutch law. This led, to the following relevant changes:

• The employer’s obligation to inform employees (ie change the template employment agreement) about the essential aspects of the working relationship and conditions has been expanded.
• The possibility to recover study costs from the employee has been limited. The employer may not recover costs from the employee for schooling that the employer is required (by law or by applicable CBA) to provide to the employee.
• The employer’s ability to prohibit the employee from performing ancillary activities has been limited. In principle, the employer may not prohibit ancillary activities, unless the employer has an objective justification for doing so. Even though it’s not legally mandatory to describe what falls withing the scope of an objective justification, it is recommended to explicitly state what is considered to be one.

A draft bill is currently being discussed to transpose Directive 2019/1152 on transparent and predictable working conditions in the EU.

If the draft is adopted in its current wording, employment, apprenticeship, temporary workers and student contracts should include the following:

• the fact that, in the absence of a fixed or predominant place of work, employees are free to determine their place of work;
• overtime payment arrangements;
• distinction between base pay and supplementary pay;
• rules for terminating the employment contract;
• conditions of probationary periods;
• right to training, if applicable; and
• identity of the competent social security body.

Employers who fail to comply with these legal obligations might have to pay a fine.

Current employees will be able to ask the employer to provide them with an employment contract in accordance with the new provisions. The contract must be provided by the employer within two months.

There’s currently no general obligation in Belgium for employers to have a time recording system in place.

But it is important to track employees’ working time (but not necessarily with a formal time registration system), especially in times of hybrid/flexible work when the obligations of the employer vis-à-vis the employees can vary on a daily basis (eg cost allowances for homework, transportation costs).

A trend in case law is that in cases related to working time (eg overtime claims), the burden of proof becomes much harder if an employer does not have a time tracking tool in place. In some cases, there’s even a reversal of the burden of proof, whereby the employer will need to prove that the claims made by the employee are unfounded.

In the Netherlands, employers are required by law to keep track of their employees' working time. Accurate and complete records of the employees' working hours must be maintained, including start and end times, breaks, and any overtime worked.

These records should be kept for at least one year and made available for inspection by labour inspectors. Employers who fail to comply with these regulations may face fines and other penalties. By adhering to the requirements for tracking working time, employers can ensure they maintain a fair and transparent working environment for their employees.

These obligations do not apply to employees who earn at least three times the statutory minimum wage.

All employers are required by law to enter in a special register, on paper or electronically, that includes:

• when daily working time starts and ends;
• daily working time;
• overtime;
• work on Sundays/public holidays and night work; and
• payment made in compensation.

Certain employees are exempt from working time tracking requirements such as employees occupying an effective management position and senior managers whose presence in the company is essential to ensure its operation and supervision.

The register must be available for inspection by the labour authorities.

Failure to comply with the maintenance of a register or file with all mandatory information can result in an administrative fine.