The labour market has changed significantly in recent years. More and more people work on the basis of a flexible contract, for example as an on-call worker, temporary employee or through a payroll arrangement. To reduce the differences between permanent and flexible work, in 2020 the Balanced Labour Market Act (WAB) was introduced. But what exactly does this law mean for employers and employees? And where are the biggest risks?

The employment lawyers at Arslan Advocaten explain how the rules work, what has changed since the introduction of the WAB and how you can prevent problems.

What is the Balanced Labour Market Act (WAB)?

The WAB aims to reduce the gap between permanent and flexible work. Employers should find it more attractive to hire employees on permanent contracts, while flexible workers receive greater security. The law applies to all employment contracts that were concluded or renewed after 1 January 2020.

Key changes under the WAB

1. On-call workers: more certainty for employees

On-call workers, such as zero-hour or min-max contracts, have had more rights since the WAB. Employers must give employees at least four days’ notice. If that happens later, the employee may refuse. If a call-in is canceled within four days before the workday, the employee retains the right to pay for the scheduled hours.

After 12 months, the employer must also offer a fixed number of hours that corresponds to the average number of hours worked in the past year. This gives on-call workers more certainty about their income.

2. Transition allowance from the first working day

Before the WAB, an employee was only entitled to a transition payment after two years of employment. Since the WAB, that right applies already from the first working day. This also applies to temporary contracts and termination during the probationary period.

For employers, this means that any termination of an employment contract — no matter how short — can have financial consequences.

3. Chain regulation: three contracts in three years

The so-called chain regulation determines how many temporary contracts an employer may offer before a permanent contract automatically arises. Since the WAB, employers may offer at most three temporary contracts in three years offer. After that, the employment contract becomes permanent by operation of law.

If an employee interrupts the employment relationship for more than six months, the chain starts again. In collective labor agreements, this period can be shortened to three months for seasonal work.

4. Payroll arrangements: equal terms and conditions of employment required

An employer who hires staff via a payroll company may no longer benefit from cheaper terms and conditions of employment since the WAB. Payroll employees are entitled to equal terms and conditions of employment as employees of the client, including pay, leave, and pension.

This prevents unfair competition between permanent and flexible workers.

5. Lower unemployment insurance premium for permanent contracts

Employers pay a lower unemployment insurance (WW) contribution for employees with a permanent contract than for flexible workers. The idea behind this is simple: permanent jobs are made more attractive. If an employee with a permanent contract leaves within the year, the employer must still pay the higher contribution.

Pitfalls for employers

Despite the clear rules, things often go wrong in practice. The most common mistakes are:

• Failing to call in employees on time or cancelling within four days
• Not making an offer after 12 months of on-call work
• Incorrect application of the chain regulation
• Treating payroll employees unequally
• Incorrect calculation of the transition allowance

These mistakes can lead to wage claims, fines, or a unjustified dismissal that is annulled by the court.

Risks for employees

Employees also face risks. For example, anyone who refuses a call-up or does not show up may lose their right to wages. And although the WAB offers more protection, the position of flexible workers remains vulnerable. Employees who have worked flexibly for a long time would be well advised to have a legal assessment of whether they are now entitled to a permanent contract.

Tips for employers

• Record call-up notice periods and availability in writing
• Check the chain rule in your collective labor agreement
• Document call-ups, cancellations, and time records
• After 12 months, make a timely fixed-hours offer
• Ensure equal treatment of payroll employees
• Check each termination of employment for transition payment

Tips for employees

• Keep all call-ups, emails, and schedule changes
• Check whether you receive an offer for fixed hours after 12 months
• Ask for written confirmation when your contract changes
• If in doubt about your legal position, have an employment law attorney take a look

Frequently asked questions about the WAB and flexible contracts

How many temporary contracts is my employer allowed to offer?

You may receive a maximum of three temporary contracts in three years. After that, a permanent contract arises automatically, unless there has been a break of more than six months.

What happens if my employer calls me in too late?

If you are called in less than four days in advance, you are not obliged to come to work. If the call is canceled within four days, you remain entitled to wages.

Am I entitled to a transition allowance with a temporary contract?

Yes, since the WAB you are entitled to a transition allowance from the first working day, even if your contract is not extended.

What is the difference between payroll and temporary agency work?

With payroll, the employee is formally employed by a payroll company but works for a single client. In temporary agency work, employees can be deployed to multiple clients. Since the WAB, payroll employees are entitled to the same terms and conditions of employment as permanent employees.

Arslan Advocaten helps with flexible contracts

Whether you are an employer or an employee: the rules around the WAB are complex. The employment lawyers at Arslan Advocaten help with assessing employment contracts, on-call arrangements, and dismissal issues. We also assist clients in proceedings regarding wages, transition payment, and the chain regulation.

Would you like to know whether your flexible contract complies with the WAB, or do you doubt the legality of a call-up? Get in touch with our firm for direct legal advice.