Sick Temporary Agency Workers and the Agency Clause: What Are Your Rights?

When you work as a temporary agency worker, you have probably heard of the agency clause (uitzendbeding). But what does this mean exactly, especially when you become ill? In this blog, we discuss the rights of sick temporary agency workers and what the agency clause entails.

What is the agency clause?

The agency clause is a provision in the contract of temporary agency workers whereby the agency agreement automatically ends when the client (the hirer) no longer has work available. This means that the agency agreement can end without notice as soon as the hirer indicates this. This arrangement provides flexibility for both the hirer and the employment agency, but can cause uncertainty for the temporary agency worker.

What happens when a temporary agency worker becomes ill?

Until recently, the agency clause meant that a temporary agency worker could also lose their job immediately in the event of illness. As soon as the temporary agency worker reported sick, the agency agreement was automatically terminated. This caused considerable uncertainty, as there was no entitlement to continued payment of wages during illness. From 1 July 2023, however, this has changed. The new collective labour agreement for temporary agency workers contains an important amendment: the termination of the agency agreement in the event of illness is no longer automatic. This means that a temporary agency worker cannot be dismissed immediately due to illness. As a result, the rights of temporary agency workers are increasingly aligned with those of permanent employees.

What does the law say about the agency clause and illness?

The law offers temporary agency workers protection through the prohibition on dismissal during illness. This prohibition means that an employee may not be dismissed during illness. Previously, however, this prohibition was circumvented by the agency clause, which terminated the agency agreement immediately as soon as the temporary agency worker became ill.

What has the Supreme Court ruled on the agency clause in the event of illness?

The Supreme Court has ruled that the agency clause in itself is not in conflict with the statutory prohibition on dismissal during illness. However, it is important that the agreement may not automatically end as soon as a temporary agency worker reports sick. The law prescribes that the termination of the agency agreement can only take place if the hirer explicitly requests this — not simply upon a sick report. In other words: the automatic termination of the employment relationship in the event of illness, purely on the basis of the agency clause, is no longer permitted. Only if the client (the hirer) officially requests the termination of the assignment may the agency agreement be terminated, even during illness. This provides greater certainty for temporary agency workers and ensures that collective agreement provisions that stipulate otherwise are void insofar as they conflict with this. Thanks to recent amendments to the collective labour agreement, this is now no longer permitted.

How does the court view the agency clause in the event of illness?

The case that was brought on this matter ultimately ended up before the Court of Appeal in The Hague. They had to assess whether the agency clause — whereby the contract automatically ends in the event of illness — could exist alongside the statutory prohibition on dismissal during illness. The Court was very clear on this: the automatic termination of the agency agreement due to illness is in conflict with the prohibition on dismissal. According to the Court, a temporary agency worker who becomes ill may not simply lose their job through the invocation of the agency clause. This ruling has contributed, among other things, to the adjustment of the current collective agreement and legislation, so that temporary agency workers are better protected during illness and have the same rights as other employees. Key points:

• The agency agreement no longer automatically ends in the event of illness.
• The hirer can still terminate the assignment of the temporary agency worker, but this must be explicitly requested.
• The employment agency is responsible for the continued payment of wages during the illness period of the temporary agency worker, depending on the arrangements between the hirer and the employment agency.

What does the Supreme Court ruling mean for termination in the event of illness?

The recent ruling of the Supreme Court provides even greater clarity for temporary agency workers and their employers. The essence is simple: an employment agency may not automatically terminate an agency agreement as soon as a temporary agency worker reports sick. According to the Supreme Court, only the hirer — i.e. the company where you actually work — can request the termination of the assignment. Only when such an explicit request is made can the agency agreement end, even in the case of illness. This means that merely reporting sick is no longer sufficient to automatically terminate the agency agreement. Rules in collective agreements that stated the opposite are in conflict with the law and therefore no longer apply. In summary: the agency clause remains in force, but no longer provides an automatic escape route in the event of illness. The protection for sick temporary agency workers has thus been strengthened.

Legal debate: The agency clause versus the prohibition on dismissal during illness

There has been much debate recently about the agency clause in combination with the statutory prohibition on dismissal during illness. The core of the debate: may an agency agreement automatically end as soon as a temporary agency worker reports sick, or is this in conflict with the law? In various court cases, judges have considered this question. The Court of Appeal in The Hague ruled that the automatic termination of the agency agreement in the event of illness is at odds with the prohibition on dismissal. According to the court, illness may not be a reason to immediately terminate the employment relationship. This would undermine the statutory right to continued payment of wages during illness. The highest court, the Supreme Court, however, nuanced this ruling. The agency clause itself is not in conflict with the prohibition on dismissal. What is not permitted: the automatic termination of the agency agreement solely because a temporary agency worker reports sick, if the hirer (client) has not explicitly requested this. According to the law, the initiative to terminate the agreement lies with the hirer, not automatically with the illness of the employee. In short: a contractual provision that assumes that the agency agreement ends immediately upon illness, without a request from the hirer, is invalid. The agency clause remains in force, but can only be applied if the hirer actually requests the termination of the placement.

What does the recent Supreme Court ruling mean for the agency clause?

To understand how the collective agreement for temporary agency workers and a Supreme Court ruling interact, it is useful to look at where they intersect: the protection of sick temporary agency workers. Recently, the Supreme Court heard a case in which the agency clause was central. It was examined whether a temporary agency worker may immediately lose their job in the event of illness, as appeared possible under some collective agreements and contracts. The core of the conflict The case concerned the following: may an agency agreement automatically end as soon as a temporary agency worker reports sick, because the agency clause would allow this? According to earlier case law and some collective agreement provisions, this was permitted — but this clashed with the statutory prohibition on dismissal during illness. What did the Supreme Court say? The Supreme Court ruled that the agency clause may exist, but that an agency agreement may no longer automatically end in the event of illness. The agreement may only be terminated if the hirer actually requests this. Put simply: a sick report is not enough; the hirer must explicitly want the end of the assignment, otherwise the contract continues. Connection with the new collective agreement This ruling aligns well with the latest collective agreement for the temporary agency sector, which has been in effect since 1 July 2023. The collective agreement has been amended to accommodate this Supreme Court ruling. Now, an agency agreement with an agency clause may no longer end due to illness of the temporary agency worker, unless the agreed end date has been reached or the temporary agency worker themselves can no longer or does not wish to work (but not due to illness). In short: both the law and the collective agreement are now clear — protection during illness has been strengthened. The automatic termination of your agency contract as soon as you are ill is a thing of the past. Your agency agreement only ends upon reaching the previously agreed end date or if you yourself can no longer perform the work (other than due to illness).

What happens if a collective agreement provision conflicts with the law?

Suppose a collective labour agreement (CAO) contains a provision that is actually not permitted under Dutch law. What happens then? In such a case, it is simply the case that: the statutory rules always take precedence. This means that the part of the collective agreement that conflicts with the law is automatically void. You therefore do not have to comply with it, because the law takes precedence over the collective agreement. This ensures that employees are always protected by Dutch employment law, even if other arrangements are stipulated in the collective agreement. So remember: if you are in doubt about a collective agreement provision, always check what the law says first.

When can an agency agreement end?

Although the new rules strengthen the position of temporary agency workers, there are still situations in which an agency agreement can end:

• End date reached: The agency agreement can still end if the agreed end date has been reached.
• No longer available for work: If the temporary agency worker can no longer or does not wish to perform the agreed work (except in the case of illness), the agreement can also end.

It is important to know that during illness the agency agreement cannot automatically end, unless the hirer explicitly requests the termination of the assignment. This request must be separate from the illness of the temporary agency worker.

Continued payment of wages during illness

A temporary agency worker, like a permanent employee, is entitled to continued payment of wages during illness. This is regulated via the collective agreement for temporary agency workers and depends on the phase in which the temporary agency worker finds themselves (phase A, B, or C). Important to know:

• In the first 52 weeks of illness, the employment agency must pay at least 90% of the most recently earned wages.
• After 52 weeks, this is reduced to 80% of wages.
• The employment agency bears responsibility for these payments, but may in some cases pass on the costs to the hirer, depending on the arrangements in the agency agreement.

What does this mean for you as a hirer? When a temporary agency worker becomes ill, their agency agreement cannot simply end without your explicit request to the employment agency. It is important to know that the costs of continued wage payment during illness — which the employment agency pays to the employee — may potentially be passed on to you. This depends on the arrangements between you and the employment agency. At present, as long as the terms have not been amended, you can avoid continued wage payment costs by requesting the employment agency to terminate the assignment. Please note: this is only a temporary solution. New rules from 1 July 2023 With the entry into force of the new collective agreement for temporary agency workers, an important change applies from 1 July 2023: the agency clause can no longer be used to terminate the agreement due to or during illness (or incapacity for work) of the temporary agency worker. Only when the agreed end date has been reached, or when the temporary agency worker can no longer or does not wish to perform the work (other than due to illness), may the agreement end. It is explicitly stipulated that during illness or incapacity for work, both the assignment and the agency agreement continue, even if the hirer requests otherwise. Under this new collective agreement, the extent to which you as a hirer must bear the costs of continued wage payment during illness also continues to depend on the arrangements made. Therefore, always discuss with the employment agency what applies in your specific situation.

Conclusion

The new rules regarding the agency clause in the event of illness provide greater certainty for temporary agency workers. Where previously the agency agreement could end immediately upon illness, this is no longer the case. The employment agency is obliged to continue paying wages during the illness period, as a result of which temporary agency workers enjoy greater protection. Are you a temporary agency worker and do you have questions about your rights in the event of illness? Or are you a hirer and do you wish to know more about your obligations? Please do not hesitate to contact Arslan Advocaten. Our team of experienced employment law lawyers is ready to help and advise you on all legal aspects of temporary agency work.