On 3 July 2024, the Dutch government published the Bill Clarifying Assessment of Employment Relations and Legal Presumption (Wet verduidelijking beoordeling arbeidsrelaties en rechtsvermoeden (VBAR)) as amended after an internet consultation. The bill introduces two additions to current legislation: (i) clarification of "relationship of authority", which is one of the defining elements of an employment agreement; and (ii) a legal presumption that an employment agreement exists, when working at an hourly rate of EUR 33 or less.

Relationship of authority

Many working relationships contain characteristics of both employment and self-employment. To determine whether an agreement qualifies as an employment agreement, "working in the service of" the work provider is a crucial criterion, which requires assessing whether a "relationship of authority" exists between the worker and the work provider. To clarify this criterion, the bill introduces two main elements derived from Dutch and European caselaw, one indicating that an employment relationship exists and the other being a contra-indication for an employment relationship:

• The first element involves features indicating that an employment relationship exists, namely work-related control and organisational control. These were separate criteria in the previous bill, before it was amended, but are now brought together under the "criteria indicating employment" heading. Relevant circumstances are: receiving instructions on work content; work being monitored; organisational embedding of the worker; working on a structural basis; and performing the same work as "regular" employees.
• The second main element indicating self-employment is "working at one's own risk and expense" within the working relationship (also referred to as: "internal entrepreneurship"). Circumstances indicating self-employment are: bearing your own financial risk; bringing your own tools or equipment to work; having specific expertise which is not available in the work provider's company; and working independently and for a short period of time.

If these elements of employment and self-employment are equally present, it becomes relevant if the worker generally operates as an independent contractor outside the working relationship which is being assessed (also referred to as: "external entrepreneurship"). This may be the case if the worker has multiple clients per year, does its own acquisition, makes investments in its company, and/or has its own VAT number.

Deliveroo ruling

The bill refers to the Supreme Court's Deliveroo ruling several times, but weighs the criteria for assessing whether an employment relationship exists differently than the Supreme Court. In this ruling, the Supreme Court made clear that "all circumstances" of a case should be considered in assessing whether a working relationship qualifies as employment, including the worker's organisational embedding and whether the worker runs a commercial risk when performing the work. Another relevant factor was whether workers manifest themselves as an entrepreneur in society (which indicates "external entrepreneurship"), for example when building a reputation, acquiring clients or receiving certain tax treatment. The Supreme Court held that all of these factors are interrelated, but it did not rank them based on importance.

The new bill, however, first weighs the factors indicating employment against the factors indicating self-employment. Only in the second instance, when both factors are equally present, does the worker's "external entrepreneurship" play a role in determining whether there is an employment relationship. Consequently, this differs from the holistic approach the Supreme Court advocates. That is remarkable as the legislature has explicitly and repeatedly stated that the bill only intends to clarify existing rules, not modify them (except for the introduction of a legal presumption).

Legal presumption of employment

The second part of the bill is dedicated to a "legal presumption of employment" based on an hourly rate. If a person is hired for less than EUR 33 per hour, they are presumed to be an employee. This legal presumption should help vulnerable low-paid workers to more easily claim a legal status as employees and enjoy the rights and protection to which they are consequently entitled.

Next steps

The bill was sent to the Dutch Council of State for advice on 21 June 2024. After this advice has been provided, the bill will be submitted to the Dutch House of Representatives. If the bill becomes law, it will enter into force as of 1 January 2026 at the earliest, and will have immediate effect, applying to all employment agreements existing on 1 January 2026.

In parallel to the civil-law legislative process, enforcement of false self-employment will be improved and strengthened from a tax perspective. Enforcement by the Dutch Tax Authorities (which was suspended over the past eight years except in cases of obvious misuse) will resume on 1 January 2025.