COVID-19 and Employment contracts in Netherlands

For the Netherlands, the current government guideline is to -continue to- work from home when possible. The guideline has not changed during the partial lockdown and is anticipated to continue to be in place for the months to come. However, with society opening up more and more, offices that where closed entirely are in the process of starting to look at a -part time- return to the office. Mostly on a voluntary basis. Since most children are back in school fulltime, some parents are even requesting to go back to the workplace.

The employer does have a general duty of care to ensure a safe working environment.

As a first step, follow the general and specific industry and government guidelines (contact professionals, retailers, restaurants, entertainment, and many more). For almost everyone, all employees must at all times be able to keep a 1.5 distance from other persons.

Before allowing your personnel to return to the office it is advised to assess the key risk areas taking into account the on-site specifics of the building and work conditions. Guidance of Arbo Service companies may be useful. Such companies can assist in working conditions risk assessment. Generally, it should be established how much space there is, physically, and what numbers should be allowed to ensure keeping the 1.5 m distance is possible at all times. Physical risk areas should be addressed: entrance, exits, coffee corners, canteens, work stations, elevators, toilets. Instructions and guidelines must be communicated: distance, hygiene rules, use of the building, routing, use of tools. Ventilation should be checked, cleaning schedules etc.

Note that you also have a duty of care with regard to those who work remotely from home. It may be useful to check if all works as it should in this regard. Are there any signs that people experience health problems? Do they have adequate guidance and tools?

Most likely not. As a general measure, even during the COVID-19 pandemic, the employer does not have the right to take the body temperature of employees or assemble or store their personal data in relation thereto. While not completely ruled out, it is unlikely that such a measure qualifies as necessary, a reasonable and proportionate measure. In principle you are also not allowed to ask or store any information in relation to your employee’s health. Asking your employees any health related questions, directly or by using a questionnaire, before coming back to the office, therefore, – in the vast majority of cases- is not allowed. You should always use the company doctor to assess health matters of employees for you in relation to their capability to work. The company doctor can discuss with the employee and ask any relevant questions and get them sufficiently answered. The services of a company doctor are regularly engaged through a so-called Arbo Service company. Some companies do use a questionnaire that does not require the employee to reply with actual answers but only asks the employee to stay at home and contact the company doctor if they answer any of the questions with “yes” (or “no” for that matter).

Under normal circumstances this would likely be considered a reason that should be for the employees own account. In such case you would not have to pay salaries. However, there could very well be circumstances that would require the company to have to continue to pay salaries.

The first question would be whether it is necessary for the employee to come to work. The government guideline at this time is to work remotely from home where possible. Where companies are currently returning to the workplace, mostly this is part-time and on a voluntary basis.

Further, best practice would be to consult and determine the background and reasons for not coming to work. There could be a justified fear as a reason for not coming to work, for instance if the employee or someone in the household is to be considered specifically vulnerable for the virus. It would be required to discuss reasonable alternative options with employees. If there are non and the fear cannot be taken away, it is likely no salary is required to be paid.

Dutch law does not provide for a general entitlement to work from home. Currently, the government COVID-19 guideline is still to work remotely from home if possible. While working from home during the (partial) lockdown likely substantiates that working from home is possible, this will not automatically trigger an entitlement for the future. Allowing your employees to work from home after the government guidelines have changed, over time, could lead to an entitlement to work from home.

As a background on this topic, in companies with more than 10 employees, an employee that is employed for more than 6 months can ask an employer to be granted an approval to work from home but the employer may deny such a request.

Prepare and communicate well. Especially also during unlocking the workplace, communication with personnel is key. You are likely to have part of the workforce on site and still a part that is working from home. At site, some employees may follow the instructions more closely than others. At several levels, there is the need for connection and communications awareness more than ever.

Show a true interest in your personnel, their health and safety and confirm their key importance for the company in these times. Where possible, create a sense of community. Share the company challenges and targets (financial, customers waiting, company performance). Set out the plan for unlocking the workplace and re-opening. Call for action, ask for input and contributions. Be clear as to what you expect. Be approachable, have a contact point for questions and allow for -digital- consultation amongst personnel.

The subsidy measure for payment of salaries, the NOW 1.0 over the period March, April and May, will be followed up by the NOW 2.0 measure that will apply for June, July, August and September 2020.

The most relevant changes in NOW 2.0 compared to NOW 1.0 are:

• The term is 4 months covering June, July, August and September 2020.
• The turnover of 4 months will therefore be compared with the average turnover over 4 months of 2019 (the annual for 2019 divided by 3).
• The period of 4 months of turnover cannot be chosen for companies that also applied for NOW 1.0 and will be the 4 months connecting to the months of choice for NOW 1.0.
• The reference period for the wage sum will be March 2020 (NOW 1.0: January 2020).
• The markup for general salary costs over the wage sum shall be 40% (NOW 1.0: 30%).
• Upon the initial application (from 6 July) the NOW 2.0 will again provide an advance payment (80%) and the final subsidy shall be set upon the company’s request that is due from mid November 2020 as soon as the turnover is final. In principle, the company has 24 weeks to apply.
• The general obligation will still be to keep the salary sum the same and to not terminate for economic reasons.
• While –as under NOW 1.0- it is possible to terminate employment contracts for economic reasons while applying/receiving NOW, the negative consequences –penalties have been amended under NW 2.0:

The penalty for individual termination is lowered: 3 months of salary of the employees to be terminated will be deducted from the subsidy.

The penalty for collective dismissals shall be 5% of the total subsidy amount unless the company.

• As applicable under NOW 1.0, also under NOW 2.0, all procedures and requirements of Dutch employment law with regard to termination of employment remain applicable in full.
• In addition to other general conditions, the company must acknowledge that it will commit to and promote and stimulate employees to participate in schooling on a best effort basis.
• For companies that receive an advance of more than EUR 100.000 or subsidy of 125.000 or more 2 conditions apply.
  1) A further extra condition is that there will be no payments of bonuses over 2020 for directors and policy making management, no dividends may be paid out and no shares of the company may be bought.
  2) An accountants declaration (approval) shall be required.
  The UWV will be open for applications from 6 July until and including 31 August 2020.

Information on the NOW and all other economic measures for business as established during the COVID-19 crisis can be found through the following link:

https://www.government.nl/topics/coronavirus-covid-19/information-for-business-owners

The Dutch government does not have a compensation for reduced working hours anymore. Instead, the government created a subsidy for companies experiencing a reduction of turnover of 20% or more due to the corona-crisis. This so-called NOW subsidy, at a maximum, will cover 90% of the wage costs for a duration of 3 months, during March, April and May 2020. The measure may be extended by the Dutch government for another 3 months.

For HR purposes, it is useful to realize that the NOW subsidy is not related to the actual working hours. Under the NOW, the intention is that the employer keeps its employees and remains to pay them in full. Mostly, employees are still working –depending on impact of health measures – either fulltime or part-time, remotely or on site, fully in their original job or having been assigned alternative tasks.

How the NOW works in 10 (oops 12) bullets:

• You assess the reduction of the company turnover over a period of the months March/April/May 2020 compared to the total turnover of 2019 divided by 4 (the average 3 month period in 2019).
• Alternatively: You may also compare an assessment of loss of turnover over April/May/June OR May/June/July in 2020 to the average 3 month period of 2019 as above.
• For companies that are part of a group, turnover reduction must in principle be measured collectively for all group companies with Dutch social security wages.
• Your subsidy will initially be based on the social security wage sum of January 2020 plus a markup of 30% for costs other than base salary for 3 months. Salaries taken into account are capped at EUR 9,538 gross per month per person.
• For some companies the wage sum of March 2020 instead of January 2020 can be used, such may be advantageous for companies with seasonal fluctuations.

Your subsidy will be:

• In case of a reduction of 100% turnover  90% of the wage sum (plus 30%) over the 3 months of March/April/May 2020
• In case of a reduction of 50% turnover  45%
• In case of a reduction of 25% turnover 5%
• Your subsidy must be used in order to keep paying salaries
• You must inform your Works Council (or staff representative body) of your NOW application
• You apply for the NOW subsidy at the state authority UWV: https://www.uwv.nl/werkgevers/overige-onderwerpen/now/detail/now-aanvragen
• You will receive a 80% advance of the estimated subsidy based on the assessed reduction of turnover and wage sum of January. The first of three payments will be made within 2-4 weeks of the application

There will be final assessment based on:

• the actual reduction of turnover over the 3 month period in 2020 of your choice (see above) compared to the average 3 month turnover of 2019;
• the actual wage sum over the period of the subsidy. A reduction in personnel will case a reduction of the final subsidy
• If you not renew contracts or let people go compared to the wage sum of January this will have a negative effect on your subsidy. If you apply for a permit to give notice for economic reasons a further penalty (50%) will be due.

The above outlines the basics. Further conditions relate mainly to prevention of misuse and fraud. You will be required to hold up-to-date records of administration available, inform the UWV of any relevant developments and present an auditor’s report to demonstrate the actual loss of turnover for the final assessment to be made.

The NOW measure is meant for all employers, including foreign companies, with Dutch social security wages and covers potentially, all employees, including flex workers. A foreign employer does require a Dutch bank account.

The deadline to file a request is 5 June 2020.

Other Dutch measures to assist companies in times of the COVID-19 crisis include many types of tax postponements and loans against favourable terms. Specific measures are currently in place for independent contractors, start-ups and scale-ups, specific types of the agricultural sector, the cultural sector.

There are possibilities during a legal probationary period. Such a probation period should be included in the written contract of employment. Even then, it is possible that the company is required to pay a compensation. Since at this time, the crisis was likely already a known fact at the time the contract was offered or concluded, chances to withdraw a definite offer that is accepted are currently slim.

No. You may encourage employees to take time off also during these times. You may ask them also to contribute voluntarily and take up days. Depending on your contract (or collective agreement where applicable) you may have a right to determine some days collectively.

In the Netherlands, the primary schools will be opened from 11 May. Likely part-time as groups will be smaller.

The duties for employers and employees in these extraordinary times are covered by the general duty of reasonableness and fairness in the employment relationship. The duty to act as a good employer and as a good employee.

Best practise would be to consult and determine the reasonable options with employees. This means the duties are potentially different for a single parents, parents whose partner works in a crucial job (health care), has many children, is vulnerable, etc. The simple question to openly discuss would be, what is possible, what is efficient and workable. Efforts from the side of the employee are also required, within reason. Parents are for instance working part-time and sharing tasks amongst partners or with neighbours including home-schooling and taking care of each-others children in small consistent groups so that 50% of the working time is at least saved.

During the partial lock-down, and highly probably also afterwards, a priority is given to working remotely from home.

Companies have been strongly encouraged to organize working from home as much as possible.

When it is not possible, then the employer has a duty to organize the workplace in a way that respects social distancing (1.5 m) and hygiene and other guidelines of the government. This includes measures to avoid crowds and gathering also in commuting by, for instance, working with flexible hours or shifts.

Specific industries may well be required to comply with industry specific standards as developed by social partners (unions and employers organisations), potentially set out by a collective agreement. It is advised to confirm company specific measures in a risk assessment document. Where there is a health risk officer in the company, naturally he/she must be involved. Depending on the seize of the company and the industry, the Works Council or staff representation as well as the Arbo-service and/or company doctor may be involved.

Yes. A company has the same technical possibilities for termination as before.

However, the NOW subsidy may well be reduced. See above under 1. The intention and therefore one of the conditions for the subsidy is that during the subsidy no requests for terminations for economic reasons are submitted. Also, in the event that a company does request a termination, it must show that even with the NOW subsidy, it would still be necessary to terminate.