2013 is not a very good year for the payroll industry. Payrolling is the triangular relationship whereby the payroll organization takes on both the payroll administration and the legal employer role and enters into a written employment contract with the employee. The purpose of this is that certain employer risks related to illness and dismissal no longer fall on the client company, while it exclusively “loans” the employee for years.
The unions were already fed up in 2011 and terminated their cooperation in the VPO CAO. In 2012 and 2013, the debate shifted from inequality in position and employment conditions (“second-class employees”) to legal disputes regarding “employership.” Recently, the courts have increasingly accepted that the borrower is materially the employer (remained) with all the associated obligations. The motto here is: “substance takes precedence over appearance.”
In October 2012, the court in Leeuwarden ruled that the transfer desired by the employer of an employee from the employer to a payroll organization was not valid without the express consent of the employee (LJN BY0861). At the end of 2012, the Rotterdam court ruled that the UWV Dismissal Task Policy Rules regarding Payrolling (with the very simple dismissal order) are in conflict with the Dismissal Decree (JAR 2013/46). Does this then lead to the agreement between the employee and the Payroll organization
Labor law specialists are now discussing whether it is possible to have an employment contract with two parties simultaneously (payroll and hirer).
The Minister intends to abolish the special dismissal rules for Payrolling in any case and is investigating further possibilities to counter improper constructions. However, a clear legal position, namely whether a payroll organization can be considered legally and socially as an “employer,” is for the time being left by the Minister to the judiciary.
Payroll organizations and employers active in payroll services are warned in any case. Perhaps they could still reverse this trend by giving more substantive content to payroll employment. Examples include regularly offering training and guidance (coaching on performance and career orientation), and (in collaboration with other payroll organizations) placing payroll employees with a different hirer after a certain period.
