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On Nov. 11, 2024, The Council of State published its long-awaited opinion on the controversial VBAR bill. The identification of certain problems is justified, however, the Council doubts the added value of the bill. On the other hand, the elimination of the enforcement moratorium by the Tax Administration is a good development, according to the Council. 

The bill 

A loyal reader of our blogs is already somewhat familiar with the gist of the bill, however, repetition is the strength of the message. Briefly, it seeks to tighten the distinction between employees and the self-employed and introduces a legal presumption. Any worker earning less than 33 euros per hour will be deemed an employee.

The Council of State on the distinction between employees and self-employed workers

The Council doubts that the VBAR bill solves the problem of the tax outcomes associated with answering whether someone is an employee or a self-employed person. The underlying problem is that employed persons - if they have the choice - prefer to market themselves as self-employed, mostly because it is more financially advantageous. This bill codifies existing law, which can be quite useful, but it does not address this underlying problem. According to the Council, this would be better solved by, for example, phasing out the self-employed deduction and the SME profit exemption, and requiring self-employed people to take out disability insurance. These are precisely solutions that did not make it into the bill.

Added value of the legal presumption?

The Council is also not convinced by the legal presumption. For example, the Tax Administration may not even test the legal presumption independently, but will be dependent on the court ruling that establishes employment status. In order to make use of this, working people will therefore have to go to court, which is usually too big a step for this group. How many (supposed) workers, with an hourly wage of less than € 33, will do so is indeed doubtful.

Removal of enforcement moratorium

Whereas the VBAR bill comes under considerable fire from the Council, this does not apply to the lifting of the enforcement moratorium under the DBA Act. In principle, the Council thinks this is a good idea. Indeed, it wonders whether the VBAR law is even needed in addition to this. 

Pay pension contributions retroactively? 

In principle, not much new under the sun, except that the Council asks how the government intends to deal with pension contributions. The Inland Revenue is only going to retroactively deduct over the period that the enforcement moratorium (from Jan. 1, 2025) is lifted (unless there is malice). Whether pension funds adopt the same approach if a sham self-employed person is nevertheless a retroactive employee is nowhere apparent at present. The Council literally wonders what the pension funds will do if it is determined retroactively that a self-employed person was an employee all those years. Will those years then count toward the pension calculation? In this regard, the Pension Federation has suggested that bogus self-employed people should not be given pension entitlements for the past. That would mean that, for example, a self-employed person who has always worked in Construction and has not built up any pension of his own, would soon have to live on just an AOW benefit. You can argue that a self-employed person who really chooses entrepreneurship is just out of luck, but what about those self-employed persons who do have to work as self-employed persons because otherwise they have no income? For this reason, the Council recommends that the bill be supplemented in this regard.

As a result, do you have any questions about hiring self-employed workers? If so, please contact Dennis Oud, Tessa Sipkema, Tim van Riel or Elke Hofman-Bijvank. 

You can read the opinion of the Council of State for yourself here.

When an administrative body imposes an order under penalty or order under administrative order, the violator is given a period of time to end the violation. This is called the period of grace. Sometimes it is not possible for an offender to terminate the violation within the grace period. For example, the violator may be dependent on others to end the violation. The violator will then request the governing body to extend the beneficiary period. In some cases the administrative body will go along with this, but there are also cases where the administrative body believes that extension is not justified. 

This was the case in the judgment of the preliminary relief judge of the District Court of Northern Netherlands of October 24, 2024. In this case, the violator received an order under penalty payment because his poultry slaughterhouse did not comply with the noise regulations. The college had attached a period of grace to the order under penalty. That grace period had already been extended once, but the violator requested the college to do so again. Due to a delay in the delivery of soundproofing devices, he was unable to comply with the order imposed by the college earlier. In the meantime, however, the violator had already taken measures that had significantly reduced noise levels. Nevertheless, the college rejected the violator's request. The violator therefore filed a request for injunctive relief with the preliminary relief judge, who then had to rule on the legality of that rejection. 

The preliminary injunction judge first appoints that the following emerges from established case law of the Administrative Law Division of the Council of State: 

• The purpose of the period of enjoyment is to end the violation. It is important to note that the period of enjoyment may not be longer than necessary to end the violation. 
• The administrative body has some discretion in determining the length of the period of benefit. 
• The benefit period is not intended to give the violator the opportunity to await the outcome of objection or appeal proceedings. 

If the beneficiary period is too short to comply with the order because the violator depends (in part) on third parties to do so, the violator can request an extension of the beneficiary period, as the violator did in this case. In assessing that request, what matters is the extent to which the violator took timely steps to comply with the order. If the violator does not take steps to comply with the burden until the day before the period of benefit expires, the period of benefit is unlikely to be extended. 

In this case, the preliminary injunction judge ruled that the violator had already taken temporary measures to comply with the noise limit, in anticipation of the realization of the soundproofing facilities. The Municipal Executive has therefore provided insufficient and unsound reasons for the rejection of the violator's request, and the judge in preliminary relief proceedings therefore extends the period of beneficiary until December 6, 2024. 

Are you concerned that you cannot terminate a violation committed by you within the beneficiary period, for example because you are dependent on a supply or service from third parties, or because there is a concrete prospect of legalization, and are you wondering whether in your case the beneficiary period can be extended, or whether you should file a request for injunctive relief? If so, please contact Gerard van der Wende or with Fleur Huisman. 

Link ruling

As of 2023, there are already concrete plans to introduce an admission system for employment agencies and other companies that provide labor. What would you have to do to be admitted? Among other things, submit a Certificate of Good Conduct (VOG), transfer a security deposit of one hundred thousand euros (a lower amount applies to start-ups), show that the correct wages are paid and pay taxes. Additional requirements apply to foreign employment agencies (except for the VOG). This will all be in the Law “Admission for the Posting of Workers” (TTA Law). 

When is the new law to take effect? The plan was originally January 1, 2025, but that was postponed to January 1, 2026. Even that now appears not to be feasible, according to a letter from the minister. When then? We won't hear that again until January. Enforcement of the admission system will not take place until one year after the TTA law comes into effect. So for now, there is no need to save for that security deposit just yet. 

Read the minister's letter here. 

Questions about staffing collective agreements or the posting of workers? If so, please contact Dennis Oud, Elke Hofman-Bijvank, Tim van Riel or with Tessa Sipkema.

We would like to welcome Iris Keemink to De Haij & Van der Wende Lawyers! Iris starts with us as a lawyer and brings a fresh perspective and sharp analytical skills. 

With great enthusiasm, Iris completed the Master's in Private Law and the Master's in Corporate Law at Erasmus University Rotterdam. After obtaining the masters, Iris spent some time teaching at Erasmus University Rotterdam. After a few enjoyable years, Iris made the step to the legal profession, because she knew from an early age that she wanted to become a lawyer.

With her pleasant personality and drive, she supports our team in terms of content and strengthens our knowledge and expertise at the office. We are looking forward to a pleasant cooperation!

If you as a citizen or company construct a structure without the necessary permits, or use your plot in a way that is not permitted by the zoning plan, the administrative body will generally take enforcement action. This is because the administrative body has the so-called “duty of principle to enforce. This means that if there is a violation, the administrative body must, in principle, enforce in order to end the violation (or have it ended). Such an enforcement procedure can cause a great deal of frustration for citizens and businesses, especially if they notice that there are many similar cases in the area where citizens and businesses commit the same violation and where there is no enforcement by the administrative body. Can this be done just like that? 

This issue was discussed by the District Court of The Hague in its ruling of Oct. 11, 2024. The plaintiffs had an order under penalty payments imposed on them because they had constructed structures on their property without an environmental permit. The plaintiffs argued that the enforcement by the college violated the principle of equality, because several structures in the area had been built without an environmental permit, against which the administrative body did not take action. The court ruled that to successfully invoke the principle of equality, there must be equal cases that are treated unequally, without good cause. The principle of equality requires the administrative body to pursue a consistent and well-considered administrative policy in cases where similar violations are committed by different offenders. Thus, the administrative body must provide clear direction and follow a general line of conduct regarding enforcement action in similar cases.

This case indeed involved a violation of the principle of equality. Despite the court's understanding that the board cannot take action against all illegal structures at once, the board did not specify when it will conduct inspections against the other illegal structures and how this relates to its enforcement policy. The administrative body has not provided sufficient reasons as to why enforcement in similar cases is not carried out, as a result of which the enforcement decisions are not based on solid grounds and there is a clear violation of the principle of equality. 

Have you received an enforcement decision for an illegal construction or use, while there are several similar cases in your area, or do you simply disagree with the enforcement decision? If so, please contact Gerard van der Wende or Fleur Huisman.

You can read the ruling here 

In large cases, such as zoning proceedings, stakeholders often choose to litigate together. By doing so, they want to save costs, especially legal fees. This way, they think they are cheaper. In practice, however, this is not always the case. So too in the ruling discussed in this blog. 

Indeed, in its ruling of 9 October 2024, the Administrative Jurisdiction Division of the Council of State ruled that compensation for exceeding the reasonable time limit by the administrative body was mitigated because the claimants litigated jointly. 

The reasonable time is laid down in Article 6 of the Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR). That reasonable time is exceeded if the duration of the overall proceedings is too long. The hearing of the appeal may take up to two years and the hearing of the appeal also up to two years. The reasonable time limit therefore totals 4 years. Therefore, if the entire proceedings take longer than 4 years, the reasonable time limit is exceeded. That was the case in this case. The reasonable time had been exceeded by one year, so the request for compensation was granted. 

However, the Division opted to mitigate the damages because joint litigation ensured that the degree of stress, inconvenience and uncertainty plaintiffs experienced from the over-long proceedings was mitigated as they went through the proceedings together. Ultimately, therefore, the damages of €1,000.00 were divided by the number of claimants who litigated jointly as one party, rather than paying out €1,000.00 each to all claimants. 

This ruling highlights the disadvantages that can be associated with joint litigation. Although this may initially reduce costs, it may ultimately cause you to miss out on compensation or other types of damages. Note, of course, that this ruling is only an example. This ruling involves a relatively small amount of compensation, which obviously does not outweigh the average lawyer's fees. However, there are conceivable situations where substantial damages may be involved, which can significantly exceed the lawyer's fees. 

Link ruling