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Employment & Employee Participation
On February 21, the Supreme Court answered preliminary questions in the Uber case. These questions mainly concern how perspective 9 from the Deliveroo ruling – also known as external entrepreneurship – should be weighed when determining whether there is an employment contract.
An employment contract exists when one party (the employee) agrees to perform work for the other party (the employer) for a certain period in exchange for wages. The key elements for qualifying an employment contract are: 'work', 'wages', and 'authority' (under the employer's direction). Importantly, even if parties believe they have entered into a contract for services, it can later be determined that an employment contract exists, which has both labor law and tax implications.
Whether an agreement qualifies as an employment contract depends on all the circumstances of the case, which must be considered in conjunction. Two phases must be distinguished in the assessment: i) the interpretation phase and ii) the qualification phase.
In the interpretation phase, it is determined what the parties have agreed upon. This phase considers not only the linguistic meaning of the text but also the meaning that the parties could reasonably attribute to the text. The specific circumstances of the case and what the parties could expect from each other are taken into account.
In the qualification phase, the established agreed rights and obligations are tested against the legal definition of an employment contract. In this second phase, it does not matter whether the parties intended to enter into an employment contract. Considerations such as 'This agreement is not to be regarded as an employment contract as defined in Article 7:610 et seq. of the Dutch Civil Code' are therefore not useful! The actual execution of the agreement is relevant.
Previously, the Supreme Court in the Deliveroo ruling 9 perspectives (circumstances) that may be relevant in determining whether an employment contract exists. Consider how the work and working hours are determined, whether the work and/or the worker is embedded in the organization of the employer, whether the work must be performed personally, and whether the employer bears commercial risk
Want to know more about these perspectives and how to apply them? Download our flyer (in Dutch)!
Regarding external entrepreneurship, the Supreme Court stated in the Deliveroo ruling:
'...whether the person performing the work bears commercial risk. It may also be relevant whether the person performing the work behaves or can behave as an entrepreneur in the economic market, for example, in acquiring a reputation, in acquisition, regarding tax treatment, and considering the number of clients for whom he works or has worked and the duration for which he usually commits to a particular client.'
Some key aspects of the February 21 ruling:
Read the full ruling here.
With this decision, the Supreme Court deviates from the opinion of A-G De Bock which briefly proposed applying external entrepreneurship only in a 'tie situation'. The application of external entrepreneurship is further included in the draft bill Clarification of Employment Relationships and Presumption of Employment (VBAR).
Voor vragen over schijnzelfstandigheid kunt u contact opnemen met Jaouad Seghrouchni, attorney-at-law Employment Law
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