Self-employment legislation and jurisprudence: three takeaways

How can you determine if an agreement qualifies as an employment contract? What about platform workers and directors of holding companies? Several rulings, such as the 24 March 2023 Supreme Court decision declaring Deliveroo couriers as employees, have addressed these issues. A holistic approach was adopted, considering all facts and circumstances. Besides the three main criteria - wages, (personal) work, and a relationship of authority - the indication against entrepreneurship stands out. The importance of each criterion depends on its relevance to the worker. The principle 'substance over form' applies, meaning that the agreements between parties are less significant than what happens in practice.

An interesting ruling by the District Court of Midden-Nederland on 15 March 2024 examined the Deliveroo criteria for a director of three holdings. The court determined that this professional knowingly became an entrepreneur, held a high company position, and acted independently as a general manager. Internally and externally, she operated as an entrepreneur and founder. Thus, the Deliveroo criteria, if applicable, suggest a contracting agreement rather than an employment contract.

What about the cleaners at the now-bankrupt Helpling platform? Did they work under a contract with Helpling or with the households? AG De Bock stated in her opinion on 5 July 2024 that they had an employment contract with the platform. A private household can't act as a hirer since it doesn’t involve making a temporary worker available to a business. Simply giving instructions doesn't imply supervision and authority as defined in Articles 7:690 BW and 7:610 BW.

On 10 July 2024, the District Court of Amsterdam ruled in the case of FNV and CNV against the online platform Temper. The court found that key aspects of a temporary employment contract, such as employer authority and wage payment by the agency, were not present. Additionally, the element of personally performing work was minimally met. Thus, the court did not recognise a temporary employment contract with Temper. The matter of whether there was an employment relationship with Temper's clients was declared inadmissible since they were not part of the procedure.

Currently, there's an enforcement moratorium on hiring self-employed individuals, with the Tax and Customs Administration only imposing corrections in bad faith cases. From 1 January 2025, this moratorium ends.

What will change for employers and workers?

• Starting in 2025, the Tax and Customs Administration can immediately enforce if an employment contract is found, without giving prior instructions.
• From 6 September 2024, new model agreements won't be assessed, and existing ones won't be renewed.
• No additional assessments will be imposed for the period during which the enforcement moratorium applied (until 1 January 2025).

In addition to strengthening and improving enforcement by the Tax and Customs Administration, the government is taking a second important measure to combat sham self-employment: the legislative proposal Clarification of Assessment of Employment Relationships and Legal Presumption (VBAR). For the first time, factors indicating self-employment will independently affect legal determinations regarding the appropriate type of contract.

The original proposal for a new assessment framework was described as an ‘abc’. Whether someone ‘works in service of’ is considered using three main elements: (A) work-related management; (B) organisational embedding; and (C) not performing the work at one's own risk and expense. The assessment starts with the test of the main elements A and B. Only if (one of) these main elements are present can there be an employment contract. This with the additional criterion of the worker's behaviour in economic traffic (C+). The proposal also introduces a ‘legal presumption’ of employment in situations where the worker's hourly rate is lower than EUR 32.24 excluding VAT (2024). The legal presumption is intended to protect the lower end of the market; only the worker can invoke it.

After the publication of the first draft proposal in October 2023, several changes have been made to the proposal. Changes have been made to the design of the assessment framework, leading to the term WZOP test. This abbreviation stands for Employee (work-related and organisational management), Self-employed (indicators pointing to self-employment) and Entrepreneurship (multiple clients, duration, time for reputation building and acquisition, and investments).