13 November 2016

Dutch Supreme Court: no allocation required to qualify as a temporary employment agency

This article is only available in Dutch, click here to read it

On 4 November 2016, the Dutch Supreme Court issued its long-awaited ruling in proceedings between Care4Care, a healthcare secondment company, and StiPP, the compulsory pension fund for the temporary employment industry. The ruling clarifies which employers qualify as temporary employment agencies that would have to join StiPP. The Supreme Court found that to qualify, an employer does not have to actively mediate between supply and demand of temporary staff. This means that the “allocation requirement” does not apply.

The recent ruling may have considerable consequences for employers who assign employees to third parties, such as agency and payroll companies. It implies that payroll companies qualify as temporary employment agencies and that therefore, payroll employees fall under the scope of the more flexible employment regime for temporary employees. It means that payroll employees can work on a temporary basis up until five and a half years, against the two years that apply to “regular” employees. This makes it even more attractive for companies to hire payroll employees.