Less dismissal protection
Payroll companies fall under the dismissal rules that apply to temporary agency work, which are generally more flexible than the dismissal rules for regular employees. As a type of temporary agency worker, a payroll employee has less protection in the case of a chain of contracts, and has less protection against dismissal, than a regular employee. As a result, a payroll employee can be employed on temporary contracts for a maximum of 5.5 years and the employment contract with the payroll company can end automatically if the employment with the client terminates. In addition, the payroll company does not have to notify the payroll employee on whether or not the temporary employment contract will be extended.
New legislative proposal
In November 2017, members of parliament submitted a legislative proposal to exclude payrolling from the applicability of the "flexible" dismissal regime for temporary agency workers. The proposal also entails that payroll employees are entitled to the same terms of employment as regular employees, including payment, hours, fringe benefits, and pension. These measures are meant to prevent unfair use of payrolling, which is used to compete on employment conditions.
Click here to read the legislative proposal: https://zoek.officielebekendmakingen.nl/dossier/34837/kst-34837-2?resultIndex=0&sorttype=1&sortorder=4