Secondment provisions; consigned to history?

The secondment provision has been established practice in secondment circles for some time. This provision applies as a matter of course to secondment workers who have worked for the secondment agency for a period of fewer than 78 weeks unless its application is specifically excluded in writing. The provision means that the secondment contract ends when the firm doing the hiring is no longer able or willing to hire in the worker. The secondment Collective Labour Agreements (‘CLA’) specify that this also happens if the worker can no longer do the work because he or she is sick. The secondment contract then ends immediately after the worker has reported in sick. At least, that was what we assumed until recently.

Decision by the Court of Appeal in The Hague

On 17 March 2020, the Court of Appeal in The Hague issued a remarkable judgment in relation to the use of the secondment provision when a worker falls ill. In that case, the secondment worker injured his hand in a machine at work and was therefore subject to employment disability. The secondment agency refused to continue paying wages and relied upon the secondment provision in the NBBU CLA, which was applicable. This stated that the secondment worker’s employment contract with the secondment agency ends automatically at the point when the worker falls sick or has an accident at work that means he or she can no longer do the work. The Court of Appeal confirmed that the law bans employers from terminating an employment contract during illness. Until 1 July 2015, it was possible to contract out of this in the CLA and this facility was used in the NBBU CLA at the time.

Employment and Security Act

The introduction of the Employment & Security Act (WWZ) on 1 July 2015 cancelled the option for a CLA to deviate from the ban on terminating employment during sickness. The immediate termination of the secondment contract because a worker had suffered an accident at work was therefore contrary to the ban on termination during sickness. According to the Court of Appeal, this meant that the secondment provision has been voidable since 1 July 2015 in the event of sickness or employment disability.

Secondment provision

The Court of Appeal held that secondment contracts containing the secondment provision no longer end automatically when the secondment worker becomes sick. The employment contract with the secondment agency continues until it comes to an end in some lawful manner.

The Court of Appeal’s judgment has ramifications for the continued payment of wages to sick secondment workers. Because the secondment contract containing a secondment provision ended automatically on sickness until recently, the obligation to continue paying wages on sickness only arose after 78 weeks. Now that the Court of Appeal considers the use of the secondment provision during sickness to be voidable, the obligation to continue paying wages might well arise before the secondment worker has been working for 78 weeks. This obligation only comes to an end when the secondment contract is lawfully ended, such as by operation of law after a fixed term.

To summarise, secondment agencies can no longer rely exclusively on the effectiveness of the secondment provision. They will benefit from explicitly entering into secondment contracts for a fixed term, in order to limit the risk of long-lasting continued wage payment obligations in the event of sickness.

Merel Keijzer & Wouter Engelsman