Temporary Agency Clause When a Temporary Agency Worker Reports Sick: What Does the Supreme Court of the Netherlands Say?

The use of the temporary agency clause in the employment contract of a temporary agency worker remains a much-discussed topic within employment law. But what exactly happens when a temporary agency worker reports sick and the employment contract ends automatically due to the temporary agency clause? In this article we discuss the recent Supreme Court ruling (17 March 2023) that clarifies what is and is not permitted.

What is a temporary agency clause?

A temporary agency clause is a special provision included in temporary agency employment agreements. This clause stipulates that the employment contract between the temporary agency worker and the temporary employment agency ends as soon as the client (hirer) can no longer or no longer wishes to use the services of the worker, or when the temporary agency worker can no longer perform the agreed work, for example due to illness.

The case: the dispute over continued wage payment

In the case that led to the Supreme Court’s ruling, a temporary agency worker lost two fingers while working as a machine operator. He reported sick and his employment contract ended immediately on the basis of the temporary agency clause. However, the temporary agency worker believed that his employment contract had not been terminated and demanded continued payment of wages during his illness. The District Court of The Hague rejected his request, but the Court of Appeal of The Hague ruled otherwise: the temporary agency clause would be contrary to the statutory prohibition on termination during illness and granted the request for continued wage payment.

The Supreme Court: Temporary agency clause permitted when reporting sick

The Supreme Court ultimately ruled that the temporary agency clause does not conflict with the prohibition on termination during illness. The Supreme Court indicated that the statutory prohibition on termination prevents an employer from terminating the employment contract during illness. However, the temporary agency clause does not lead to termination, but to an automatic end of the agreement by operation of law. The prohibition on termination during illness is therefore not applicable.

In addition, the Supreme Court clarified that there is no statutory prohibition on ending an employment contract by operation of law in the event of illness, as there is for other situations, such as pregnancy. This means that the temporary agency clause continues to apply in case of illness, provided that the hirer submits a request to terminate the assignment.

Consequences for employers and temporary agency workers

For employers and temporary employment agencies, this ruling means that they can continue to apply the temporary agency clause in cases of illness. This provides flexibility in the event that a temporary agency worker can no longer work. However, it is important that the hirer always submits the request to terminate the assignment, because otherwise the temporary agency clause cannot be validly invoked.

For temporary agency workers, this means that their employment contract can end in the event of illness, without the statutory prohibition on termination applying in their favor. This can have adverse consequences for continued wage payment during sickness.

Conclusion

The Dutch Supreme Court’s ruling confirms that the agency clause remains a valid instrument within employment law, even in the event of an agency worker’s illness. Employers and employment agencies must ensure that they follow the correct procedures to prevent the agency clause from being applied improperly.

Do you have questions about the use of the agency clause or other aspects of employment law? The team at Arslan Advocaten is ready to advise and support you. Contact us today for a no-obligation consultation.

Practical Implications and Recommendations for Temporary Agency Workers and Employers

While the Supreme Court’s ruling permits the use of the temporary agency clause when a temporary agency worker reports sick, both employers and workers should understand the practical implications of this decision to avoid misunderstandings and potential disputes.

For Temporary Agency Workers

Temporary agency workers should be aware that their employment contract may automatically end upon reporting sickness if the temporary agency clause is included and the hirer terminates the assignment. However, this does not mean workers are without protection or support:

• Wage Continuation: Even if the contract ends, temporary workers may still be entitled to sickness benefits under the Dutch Sickness Benefits Act (Ziektewet), which often provides income replacement during illness.
• Notification Obligations: Workers must promptly notify both the temporary employment agency and the hirer about their illness and follow the established procedures for reporting sickness.
• Review Contract Terms: It is crucial to carefully review the employment contract and confirm whether a temporary agency clause is included and how it operates.

For Employers and Temporary Employment Agencies

Employers and agencies must ensure they implement the temporary agency clause correctly and lawfully to maintain compliance with Dutch employment law:

• Proper Documentation: The client (hirer) must formally request termination of the assignment for the clause to apply. This request should be clearly documented to avoid disputes.
• Communication: Transparent and timely communication with the temporary agency worker about the end of the assignment and the consequences of illness-related termination is essential.
• Alternative Solutions: Consider whether reasonable accommodations or alternative assignments may be available before terminating the contract, to mitigate negative impacts on workers.

Legal Framework and Protections in the Netherlands

Under Dutch law, the general principle prohibits termination of employment during illness to protect employees. However, the Supreme Court’s ruling clarifies that automatic termination by operation of law, via a temporary agency clause, is an exception when the assignment ends. It is important to note:

• The statutory protection against termination during pregnancy and maternity leave remains unaffected by this ruling.
• The temporary agency worker may still have recourse to social security benefits and protections under the Dutch Sickness Benefits Act.
• The temporary agency clause must be explicitly included in the employment contract; otherwise, the termination protections apply fully.

Ultimately, the ruling balances the need for flexibility in temporary employment with statutory protections for workers, but it necessitates careful contract drafting and clear procedures.

Conclusion

The Supreme Court’s decision on the temporary agency clause provides clarity and legal certainty for both temporary agency workers and employers in the Netherlands. If you are a temporary agency worker or an employer dealing with illness-related contract issues, it is essential to understand how these rules apply in practice and to ensure your contracts and procedures comply with Dutch law.

For tailored legal advice and assistance regarding temporary agency contracts, sickness reporting, or employment disputes, contact Arslan & Arslan Advocaten. Our experienced employment law specialists are ready to guide you through complex legal matters to protect your rights and interests.

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