Current status: 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
The Labour Market in Balance bill will strengthen the legal position of payroll employees. The flexible dismissal rules for temporary agency workers will no longer apply to payroll employees, meaning they will be better protected against dismissal. Furthermore, payroll employees will be entitled to the same primary and secondary employment conditions as the regular employees at the hiring company. They will also be entitled to an adequate pension arrangement.