Working through an employment agency means that you enter into a contract with the employment agency itself, which is also your formal employer. However, you actually work at another company (the client). The employment agency pays your wages, while the company where you work determines which tasks you perform. Agency work is often temporary in nature and intended for assignments lasting from a few weeks to several months.
An agency employment contract is therefore often flexible in nature. Both the temporary agency worker and the employment agency can decide to end the collaboration. Nevertheless, clear rules apply regarding notice periods, notification and the right to a transition payment.
In this article, we explain which rules apply when terminating an agency employment contract, with and without an agency clause, and what rights a temporary agency worker has upon termination of employment.
The advantages and disadvantages of agency work
Working as a temporary agency worker comes with its own dynamics. There are attractive aspects, but there are also points to consider.What makes agency work attractive?
- Quick employment: Employment agencies often have work available immediately, so you don't have to wait long for a job.
- Diverse experience: You gain experience at various companies and in different sectors in a short time. This is ideal for discovering which type of work or sector suits you best.
- Flexibility: Looking for temporary work, for example alongside your studies or between two jobs? Agency work offers a solution.
- Possibility of permanent employment: Is the work going well? Some temporary agency workers are eventually taken on by the client company.
Points of attention with agency work
- Less certainty: Job security can be lower. Assignments can stop suddenly, and permanent contracts are not guaranteed.
- Irregular hours: You don't always know in advance where, when, and how much you will work. This requires flexibility on your part.
- Changing workplaces: You may regularly work at different locations and meet new colleagues each time.
- Career development: Growth opportunities are less clear. You need to actively take steps for development or training yourself.
How long can I work as a temporary agency worker through an employment agency?
This is a frequently asked question: how long can you actually continue working as a temporary agency worker? The answer is related to the so-called phase system, which applies to virtually all employment agencies in the Netherlands. This system divides your agency work into different phases, each with their own rules and duration.- Phase A: Here you can generally stay for up to 52 worked weeks, regardless of the number of clients. Please note: an interruption of more than 26 weeks resets the counter to zero.
- Phase B: After Phase A, you move on to Phase B. During this period, you can usually work with temporary contracts for up to 3 years, provided you receive no more than six contracts.
- Phase C: If you have worked for a total of 4 years (Phase A and B combined), you are entitled to a permanent contract (Phase C), or the employment agency terminates the employment relationship.
How does the collective labour agreement for temporary agency workers work and what does the hiring company pay entail?
As a temporary agency worker, you are covered by a collective labour agreement (CLA) that has been specifically drawn up for the temporary employment sector. This CLA determines your employment conditions – think of your right to wages, accrual of holiday days and holiday pay, allowances, arrangements for illness and pension. Moreover, most agency employment contracts are subject to different phases (the so-called phase system); in each phase, the rights and obligations may differ slightly. Therefore, always check carefully which phase you are in. In addition, the so-called hiring company pay applies: the employment agency is obliged to pay you the same wages and allowances as the permanent employees at the company where you are deployed. This includes overtime allowances, irregular hours allowances and periodic salary increases. For example, if you work through Randstad at Philips, you should be treated equally in terms of wages as the employees who are directly employed by Philips. This way, as a temporary agency worker, you are protected against unfair remuneration and you are entitled to the same employment conditions as colleagues in permanent employment.Terminating an agency employment contract with an agency clause
Many temporary agency workers in Phase A work with an agency employment contract with an agency clause. This means that the contract automatically ends as soon as the hiring company terminates the assignment.
The phase system in agency work
Employment agencies work with a phase system that determines which rights you build up as you work longer:- Phase A (the first 52 weeks): In this initial phase, you usually work on a call basis. You can be called in per day or per week and have little certainty. Both you and the employment agency can end the collaboration at any time.
- Phase B (52 to 208 weeks): After one year, you move to Phase B. Here you generally receive fixed-term contracts. Your position becomes somewhat more secure: in case of illness you may be entitled to wages, and sometimes you receive continued pay when there is temporarily no work.
- Phase C (after 208 weeks): Have you been working for more than four years? Then you enter Phase C. You are then entitled to a permanent contract with the employment agency. This offers much more certainty, including about working hours and wages.
Obligations regarding working as a temporary agency worker
As a temporary agency worker, you do not always have a fixed work obligation, but there are important rules you need to know. If you work with an agency employment contract with an agency clause (as in Phase A), it generally applies that you work when you are called in, provided the call meets the statutory call-up deadlines. Keep in mind that you cannot simply refuse a suitable assignment. If you do so without a valid reason, this may have consequences for, for example, your right to a transition payment or unemployment benefits. It is therefore advisable to carefully review your agency employment contract before declining a call. This way, you know for certain what your rights and obligations are when it comes to refusing work or accepting new assignments. Are you unsure whether an assignment is suitable, or are there special circumstances? Then contact the trade union or a legal advisor for personal advice.Termination by the temporary agency worker
The temporary agency worker may terminate the contract at any time. However, during the first 52 weeks, the obligation applies to inform the employment agency at least one working day in advance, so that a replacement can be arranged.
Notification period by the employment agency
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First 26 weeks: no notification period.
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Week 27 through 52: notification period of 10 calendar days.
If the temporary agency worker is not warned in time, they are entitled to compensation equal to the wages for the remaining notification period. Instead of this compensation, the employment agency may also offer suitable work. If the temporary agency worker refuses that work, the right to wage compensation lapses.
Refusing an assignment as a temporary agency worker
Whether you may refuse an assignment as a temporary agency worker depends on the phase in which you work and your type of contract:- Phase A: If you work in Phase A, you often have an on-call contract. In that case, you can generally refuse an assignment.
- Phase B or C: In these phases, you usually have agreed fixed hours. Refusing an assignment is not straightforward and may have consequences for your employment contract.
Can I be dismissed if I am sick as a temporary agency worker?
Suppose you become ill during your work as a temporary agency worker. Can you simply be dismissed? In principle, the employment agency may not terminate your agency employment contract on the grounds of illness, even if you are in Phase A. The prohibition on dismissal during illness also applies to temporary agency workers, just as it does to regular employees. However, there is an important difference if you work with an agency clause. If the client (the company where you work) terminates the assignment due to your illness, the contract ends automatically—the agency clause ensures this. From that moment on, you are no longer entitled to wages. Fortunately, in many cases you can rely on the Sickness Benefits Act through the UWV, which means you may receive sickness benefits. Want to know more about illness and payment as a temporary agency worker? Check the UWV website for detailed information.Continued payment of wages during illness for temporary agency workers
Do you become ill while working as a temporary agency worker? Your right to continued wage payment depends on the phase your contract is in:- Phase A (with agency clause): If you work with an agency employment contract with an agency clause, you only receive wages on the days you would actually have been working and were scheduled in advance. If you are ill on a day when you have no work, you are in principle not entitled to wages.
- Phase B and C: In these phases – usually with a fixed-term or permanent contract – continued wage payment during illness is regulated according to the statutory rules. You are simply entitled to continued wage payment if you become ill, provided you report your illness to the employment agency in a timely manner.
Terminating an agency employment contract without an agency clause
An agency employment contract without an agency clause can be terminated in Phase A, B or C by both the temporary agency worker and the employment agency.
The phase system in agency work
Employment agencies work with a so-called phase system, in which you build up more rights the longer you work:- Phase A (the first 52 weeks): During this period, you often work on a call basis. You can be called in per day or per week, and there is little certainty. Both you and the employment agency can stop the collaboration at any time.
- Phase B (from 52 to 208 weeks): You usually receive fixed-term contracts. There is more certainty: sometimes you are entitled to wages during illness or when there is temporarily no work.
- Phase C (after 208 weeks): You are entitled to a permanent contract with the employment agency. This provides much more certainty about your working hours and wages.
Notice periods for the employment agency
The employment agency must respect the statutory notice period:
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Less than 5 years of service: 1 month.
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5 to 10 years of service: 2 months.
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10 to 15 years of service: 3 months.
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15 years or more of service: 4 months.
Notice period for the temporary agency worker
For the temporary agency worker, a notice period of 1 month applies, unless otherwise agreed in the collective labour agreement.
Restrictions on interim termination
Interim termination is not always possible. This is only permitted if it has been explicitly agreed in writing in the contract or collective labour agreement, and if the statutory notice period is proportionate to the duration of the contract.
An example: if an agency employment contract is entered into for three weeks, it cannot be terminated in the interim, because the statutory notice period (1 month) is longer than the term of the contract.
Exception: wage exclusion
When the employment agency temporarily does not pay wages due to the absence of work (wage exclusion), the temporary agency worker may terminate the contract without a notice period. The condition is that the wage exclusion has been explicitly agreed in writing in the contract.
Notice period for the hiring company
Whether a hiring company can terminate the provision of services depends on the contractual agreements with the employment agency. In practice, the following often applies:
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For assignments of indefinite duration: a notice period of 15 calendar days.
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For fixed-term assignments: interim termination is in principle not possible, unless this has been agreed in writing.
Continued wage payment during illness as a temporary agency worker
Whether you are entitled to wages during illness as a temporary agency worker depends on the phase in which you work according to the agency CLA:- Phase A (formerly phase 1/2): Here the so-called agency clause applies. If you become ill while working, you only receive salary for the days worked. If there is no work at the time of reporting illness, you generally do not receive wages.
- Phase B or C (formerly phase 3/4): With a fixed-term or permanent contract, you are entitled to continued wage payment during illness. The same statutory rules apply as for other employment relationships.
Minimum hours: rights and obligations of the employee
Minimum hours are the minimum agreed hours that a temporary agency worker is guaranteed to work and be paid for, even if there is less work than expected. This system is intended to give employees certainty about their income.- Rights: As an employee, you are entitled to payment for the minimum number of agreed hours. Even if there is temporarily less work at the client company, you must be paid for these hours.
- Obligations: As an employee, you are obliged to be available for work as long as this falls within the agreed minimum hours. If work is offered within these hours and you cannot work without a valid reason, this may have consequences for your wages for that period.
Right to transition payment
Since 1 April 2023, temporary agency workers are entitled to a transition payment upon termination of their agency employment contract. The most important rules:
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The transition payment must be paid within 1 month after the end of employment.
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Employment agencies cannot invoke the statutory limitation period of 3 months.
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A temporary agency worker can still claim the payment up to 12 months after the end of the contract at the court.
The amount of the transition payment depends on the number of years of service and the last earned salary.
When are you entitled to a transition payment as a temporary agency worker?
Generally, as a temporary agency worker you are entitled to a transition payment if your contract is not renewed or is terminated early by the employment agency. This right arises from your first working day; there is therefore no minimum duration of employment required. Pay attention to the following situations:- Summary dismissal or seriously culpable conduct may cause the right to a transition payment to lapse.
- Do you work in Phase A with an agency clause? Even in this phase, a right to a transition payment can arise, provided the initiative to terminate lies with the employment agency.
- In Phase B or C (usually a fixed-term or permanent contract), the same rules apply as for other employees in paid employment.
- Resigning yourself? Then the right to a transition payment lapses.
Applying for unemployment benefits as a temporary agency worker
Is your agency employment contract being terminated and do you have no new work? Then you may be eligible for unemployment benefits (WW). To apply for unemployment benefits as a temporary agency worker, you generally go through the following steps:- Register immediately with the UWV: This can be done digitally, via the UWV website. Preferably do this on your first day without work; at the latest within one week after the end of your employment.
- Ensure proper administration: You will need your agency contracts and payslips. The UWV uses these to determine whether you are entitled to unemployment benefits and how much they will be.
- Meet the conditions: Among other things, you must be insured for unemployment, have worked sufficiently in the preceding period (usually at least 26 of the past 36 weeks), and you must not have become culpably unemployed.
Assistance from an employment law attorney when terminating an agency employment contract
The rules surrounding the termination of an agency employment contract are complex and differ per situation. Is your agency employment contract being terminated or are you unsure whether your rights are being respected? Then it is advisable to engage a specialised employment law attorney.
At Arslan Advocaten, we regularly advise and litigate in cases concerning agency employment contracts, transition payments and dismissal matters. We ensure that you receive what you are entitled to.