Introduction

From January 1, 2025, the Tax and Customs Administration will fully enforce against false self-employment. This means that companies that hire people as self-employed workers for work, while they are not actually self-employed workers, can receive a fine and additional levies from the Tax Administration. There is a one-year transition period during which companies and workers will not yet be fined if they can prove that they are taking steps against false self-employment. For this reason, many employment providers and self-employed workers are worried about what this will mean for them. What does this enforcement concretely mean for you? Where did this announcement from the tax authorities come from?

DBA act

On May 1, 2016, the Deregulation of Employment Relationship Assessment Act (Wet DBA) was introduced, replacing the previously used Declaration of Employment Relationship (VAR declaration).

The intention of the DBA Act was to give more certainty in advance to employment providers and workers about the nature of the employment relationship. To this end, parties had to use a model agreement approved by the Tax Office and ensure that the work was performed in accordance with the provisions of the model agreement. Clients then knew for certain that they did not have to withhold and pay payroll taxes.

Then, broadly speaking, two developments took place:

-the government was dissatisfied with the operation of the DBA Act. The law actually had the effect that, according to the government, it was too easy to work as a zzp-er. This encouraged abuse of self-employment. Moreover, the government was losing revenue because more people were self-employed. The government was eager to change that situation.

-there were several important court decisions that addressed the question of whether a worker was an employee or a client. These almost always involved platform workers, such as workers from Deliveroo, Uber or Temper. Finally, the Supreme Court, the highest judicial body, issued a very important ruling, the so-called Deliveroo case of the Supreme Court of March 24, 2023, find: ECLI:NL:HR:2023:443.

Summary Deliveroo-case

In summary, the Supreme Court ruled as follows:

• An employment contract is the contract whereby one party, the employee, undertakes to perform work in the service of the other party, the employer, for pay for a certain period of time. This is defined by law as.
• In order to judge whether there is an employment contract, one looks at what agreements the parties have made or intended to make (intention of the parties).
• If those arrangements meet the legal description of an employment contract, then the contract must be considered an employment contract.
• Whether the parties intended to enter into an employment contract is irrelevant.

The Supreme Court further considered that whether an agreement should be regarded as an employment contract depends on all the circumstances of the case considered together. Relevant circumstances may include:

1. the nature and duration of the work;
2. the manner in which the work and working hours are determined;
3. the embedding of the work and the person performing the work in the organization and business operations of the person for whom the work is performed; 
4. the existence or absence of an obligation to perform the work personally;
5. the manner in which the contractual arrangement of the relationship of the parties has been established;
6. the manner in which the remuneration will be determined and paid;
7. the amount of such remuneration;
8. whether the person performing the work is at commercial risk in doing so;
9. It may also be important whether the person performing the work behaves or can behave as an entrepreneur in the course of business;
10. The weight to be given to a contractual clause in answering the question whether a contract should be regarded as an employment contract also depends on the extent to which that clause actually has significance for the party performing the work.

How should the Supreme Court’s viewpoints be viewed in context?
They all count; one viewpoint is not more important than another. What really matters is the big picture!

What is new or striking in the Supreme Court’s Deliveroo ruling?

(1) The viewpoint: embedding the work and the person doing the work in the organization and its operations. Involves two issues:

• Inbedding of the work (is the work embedded in the organization?)
• Inbedding of the person performing the work.

If the work is part of normal business activities, it is more likely to be an employment contract!

(2) Further important, according to the Supreme Court, is whether a person behaves or can behave as an entrepreneur, such as:

• in acquiring a reputation (as an entrepreneur);
• when acquiring (as an entrepreneur) (via LinkedIn, for example);
• fiscal treatment (as an entrepreneur by the tax authorities);
• number of clients he works or has worked for;
• duration for which he usually commits to a particular client.

If entrepreneurship is involved, then a contract of assignment (zzp-er) is more likely.

3) The Supreme Court further ruled that free substitutability – the worker may be replaced and thus has no strictly personal obligation to work – does not necessarily preclude an employment contract. This while substitutability is one of the core elements of an assignment contract in a large number of model agreements issued by the Tax Office.

What conclusion can be drawn from the Deliveroo case?

Embedding can indicate employment contract.
But entrepreneurship, on the other hand, precisely indicates assignment contract.
Free substitutability does not necessarily mean an assignment contract.
According to the Supreme Court, whether there is an employment contract or a commission contract really depends on a broad view of all the circumstances of the case.

VBAR bill

In July 2024, the bill Wet Verduidelijking Beoordeling Arbeidsrelaties (VBAR Act) was introduced by the former minister of SZW. The first part of the proposal aims to introduce a legally enshrined assessment framework to assess whether the worker is employed by the work provider, in a way that differs from the assessment framework set out by the Supreme Court in the Deliveroo judgment. See attached blog.

The second part of the VBAR bill seeks to introduce a statutory presumption of employment based on the hourly rate of pay paid to the worker for the work. If the worker performs labor for a rate of EUR 33 or less, the worker is presumed to be performing such labor under an employment contract. It is a legal presumption that only works one way; if the worker is below the rate, he is presumed to be employed. It is not that if he is above that rate, he is presumed to be a contractor.

Conclusion

VBAR is still a bill and therefore not yet a law. Consideration of the bill is scheduled for early 2025. If and when the VBAR Act will be adopted is still unclear Entry into force will most likely take place in 2026 at the earliest. Until then, the criteria of the Deliveroo ruling will apply (see above).

As of January 1, 2025, the Tax Authority will actively enforce the DBA Act. Thus, the Tax Authority will have to start enforcing based on the Deliveroo judgment. Nevertheless, we advise you to keep an eye on the developments regarding the VBAR bill and anticipate them in time.

Do you have any questions following this blog? If so, please feel free to contact Hian Li without any obligation!

Mail op ko@kc-advocaten.nl or  call  010 35 10 299.

Hian Li Ko