The labor market has changed significantly in recent years. More and more people work on the basis of a flexible contract, for example as an on-call worker, temporary employee or via a payroll construction. To reduce the differences between permanent and flexible employment, the Balanced Labor Market Act (WAB) was introduced in 2020. But what exactly does this law mean for employers and employees? And where are the greatest risks?
The employment lawyers from Arslan Advocaten explain how the rules work, what has changed since the introduction of the WAB and how you can prevent problems.
What is the Balanced Labor Market Act (WAB)?
The WAB aims to reduce the gap between permanent and flexible employment. Employers must find it more attractive to hire permanent employees, while flexible workers have more security. The law applies to all employment contracts concluded or renewed after January 1, 2020.
Major changes by the WAB
1. On-call workers: more security for employees
On-call workers, such as zero-hour or min-max contracts, have more rights since the WAB. Employers must summon employees at least four days in advance. If this happens later, the employee may refuse. If a call is canceled within four days before the working day, the employee retains the right to wages for the planned hours.
After 12 months, the employer must also offer a fixed number of hours that corresponds to the average number of hours worked in the past year. This gives on-call workers more certainty about their income.
2. Transition compensation from the first working day
Before the WAB, an employee was only entitled to a transition compensation after two years of employment. Since the WAB, this right applies from the first working day. This also applies to temporary contracts and termination during the probationary period.
For employers, this means that any termination of an employment contract — no matter how short — can have financial consequences.
3. Chain scheme: three contracts in three years
The so-called chain scheme determines how many temporary contracts an employer may offer before a permanent contract is automatically created. Since the WAB, employers are allowed to offer a maximum of three temporary contracts in three years. After that, the employment contract is automatically considered permanent.
If an employee interrupts the employment contract for more than six months, the chain starts again. In collective labor agreements, this period can be shortened to three months for seasonal work.
4. Payroll constructions: equal employment conditions mandatory
Since the WAB, an employer who hires staff through a payroll company is no longer allowed to benefit from cheaper employment conditions. Payroll employees are entitled to equal employment conditions as employees of the client, including wages, leave and pension.
This prevents unfair competition between permanent and flexible workers.
5. Lower unemployment insurance premium for permanent contracts
Employers pay a lower unemployment insurance premium for employees with a permanent contract than for flexible workers. The idea behind this is simple: permanent jobs are made more attractive. If an employee with a permanent contract leaves employment within a year, the employer must still pay the higher premium.
Pitfalls for employers
Despite the clear rules, things often go wrong in practice. The most common mistakes are:
- Not calling employees on time or canceling within four days
- Not making an offer after 12 months of on-call work
- Incorrect application of the chain arrangement
- Treating payroll employees unequally
- No correct calculation of transition compensation
These errors can lead to wage claims, fines or an unjustified dismissal that will be ordered by the court destroyed.
Risks for employees
Employees are also at risk. For example, anyone who refuses a call or does not show up may lose their right to wages. And although the WAB offers more protection, the position of flex workers remains vulnerable. Employees who work flexibly for a long period of time would be wise to have a legal assessment assessed as to whether they are now entitled to a permanent contract.
Tips for employers
- Record call periods and availability in writing
- Check the chain arrangement in your collective labor agreement
- Document calls, cancellations and time registration
- Make a timely offer of fixed hours after 12 months
- Ensure equal treatment of payroll employees
- Check every termination of employment at transition compensation
Tips for employees
- Save all calls, emails and schedule changes
- Check whether you will receive an offer for fixed hours after 12 months
- Ask for written confirmation if your contract
- If you have any doubts about your legal position, have an employment lawyer take a look.
Frequently asked questions about the WAB and flexible contracts
How many temporary contracts can my employer give?
You may receive a maximum of three temporary contracts in three years. A permanent employment contract will then automatically arise, unless there has been an interruption of more than six months.
What happens if my employer calls me too late?
If you are called up later than four days in advance, you are not obliged to come to work. If the call is canceled within four days, you retain the right to wages.
Am I entitled to a transition payment with a temporary contract?
Yes, since the WAB you are entitled to a transition payment from the first working day, even if your contract is not extended.
What is the difference between payroll and temporary employment?
With payroll, the employee is formally employed by a payroll company, but works for one client. With temporary work, employees can be deployed for multiple clients. Since the WAB, payroll employees have been entitled to the same employment conditions as permanent employees.
Arslan Advocaten helps with flexible contracts
Whether you are an employer or employee: the rules surrounding the WAB are complex. The employment law lawyers at Arslan Advocaten help with assessing employment contracts, call arrangements and dismissal issues. We also assist clients in procedures regarding wages, transition compensation and chain arrangements.
Do you want to know whether your flexible contract complies with the WAB or do you doubt the legality of a call? Contact our office for direct legal advice.