This article will reflect on the Directive on transparent and predictable terms of employment (hereinafter ‘Directive’), which was implemented in Dutch law on 1 August 2022. This Directive aims to improve employees’ terms and conditions of employment by promoting better and more transparent and predictable terms and conditions of employment. In outline, this Directive brought the following changes:
- extension of information obligations;
- cost-free training;
- ability to request for more predictable working conditions;
- strengthen position of employees working on the basis of wholly or largely unpredictable work patterns;
- ban on ancillary employment curtailed.
In this article we shall focus on cost-free training. This means that the employee’s costs for the training (and their implementation) are for the employer’s account without the employer being able to reclaim or receive this through a repayment obligation. First, the Dutch regulation as it used to apply to employee training will be discussed, followed by the current regulation arising from the Directive. A brief practical explanation will follow. Finally, a conclusion will follow.
(Mandatory) education of employees before the Directive came into force
Dutch legislation has included a training obligation in Section 7:611a of the Dutch Civil Code (hereinafter: ‘Civil Code’) since the introduction of the Work and Security Act (In Dutch referred to as ‘Wwz‘) on 1 July 2015. Since then, the law explicitly states that the employer is obliged to have the employee follow training and courses that are necessary for the performance of his or her job (hereinafter: ‘necessary’ or ‘compulsory’ training).
From 1 July 2015, the law also stipulated that – to the extent that can reasonably be required of the employer – the employer is also obliged to allow the employee to follow training and courses aimed at continuing the employment contract if the employee’s job becomes redundant or if the aforementioned employee is no longer able to perform the job (the ‘re-employment training’).
This enabled the employee to undergo training at the employer’s expense. Offering training costs an employer a lot of money, but it also pays off if the knowledge gained is applied by the employee on the work floor. A great initiative, but what if the employee decides to leave? In order to pass on (part of) this financial risk to the employee, a provision (in Dutch: ‘studiekostenbeding’) can be included in the employment agreement (or in a separate study costs agreement) stating the consequences if the employee leaves earlier. For both compulsory training as re-employment training, it was possible to include such a clause.
In this clause, it is agreed that an employer can reclaim part of the costs incurred from the employee if he or she leaves employment within a certain period of time after attending the training course. To validly agree such a clause, the study cost clause must meet the so-called Opzeeland-criteria.
The criteria developed by the Dutch Supreme Court regarding a legally valid study expenses clause are as follows:
The study clause should include:
- stating the time period to which the repayment obligation applies, whereby that period should be derived from the time, during which the employer is deemed to benefit from the knowledge and/or skills, which the employee has gained from the education and/or course he or she has taken;
- a sliding scale, whereby the amount of the reimbursement decreases the more time has elapsed since the training and/or course was completed;
- clearly communication regarding the consequences of the study costs clause to the employee.
In Dutch lower courts, these substantive requirements were – generally – applied analogously.
Transparent and Predictable Terms of Employment Directive
From 1 August 2022, changes regarding the training obligation and the study cost clause will apply. This is because from that date, the European Directive ‘Transparent and Predictable Terms of Employment’ (the Directive) has been implemented in Dutch law.
The Directive concerns European regulations that have been formally adopted. A directive, unlike a regulation, does not have direct effect in a European Union member state. Therefore, a directive must first be implemented in national laws and regulations. The Netherlands has done so in the Transparent and Predictable Conditions of Employment Act (‘TPCE Act’ or in Dutch: ‘Wet Transparante en Voorspelbare Arbeidsvoorwaarden’ / ‘ Wet TVA’).
Relevant provisions of the Directive
The Directive contains a mandatory training obligation. Article 13 of the Directive reads:
‘Member States shall ensure that where an employer is required by Union or national law or by collective agreements to provide training to a worker to carry out the work for which he or she is employed, such training shall be provided to the worker free of cost, shall count as working time and, where possible, shall take place during working hours.’
The aforementioned article refers only to training which the employer is obliged to provide under Union law, national law or a collective agreement. It concerns compulsory and necessary training to promote the employee’s suitability to perform the specific tasks for which he/she has been appointed (author’s emphasis).
Recital 37 of the preamble to the Directive defines what is not covered by compulsory training. This concerns vocational training or training that the employee is obliged to follow in order to obtain, maintain or renew a professional qualification, as long as the employer is not obliged to offer this training under Union law, national law or collective agreement (Dutch: ‘CAO’).
The Dutch legislator has laid down the aforementioned professions regarding ‘professional qualification’ in the annex to the ‘Regeling vaststelling lijst gereglementeerde beroepen’ (Regulation establishing the list of regulated professions).
Mandatory training is therefore involved if the employer is obliged to offer the employee training under Union law, Dutch law, a collective agreement or a regulation by or on behalf of a competent administrative body. With regard to these costs, the Directive is clear: they may not be borne by the employee.
If the training complies with the above paragraph, then the additional obligations for the employer apply:
- the employer must offer the training free of charge, and;
- the time involved in the training shall be considered working time, and;
- if possible, the training takes place during the employee’s normal working hours.
Good to note is that all costs are borne by the employer. This includes travel expenses, costs for books, study materials, (re)examination fees and so on.
Relevant Dutch provisions
On 21 June 2022, the bill implementing the EU directive on transparent and predictable terms of employment was accepted by the Dutch Senate. As a result, the law Transparent and Predictable Conditions of Employment Act entered into force on August 1st of 2022. The implementation of the Directive led to an amendment of section 7:611a of the Dutch Civil Code. Nothing has changed in terms of the necessary training and redeployment training mentioned above. The employer still has the obligation to offer these to the employee. In addition, four paragraphs have been added to the aforementioned article of law.
Thus, the new Section 7:611a paragraph 2 of the Dutch Civil Code now stipulates that the employer may not recover any costs from the employee for training he is obliged to provide to the employee by law or the applicable collective bargaining agreement. The employee must also, as far as reasonably possible, be given the opportunity to complete the training during working hours. Such working time is considered ‘labour’ time. This is a far-reaching and new change for employers.
For the question of which training courses are exactly mandatory, and therefore cannot be subject to a study costs clause with repayment obligation, we first look at the general training obligation in Section 7:611a paragraph 1 of the Dutch Civil Code. This training obligation covers training that is necessary or mandatory i) for the (continued) performance of the job and ii) for the continuation of the employment contract. Examples of i) are an obligatory English course for an employee who does not have a sufficient command of the language but is deemed necessary for the job by the employer, an IT course for a new CRM system to be used or a AML- diploma in the financial and insurance sector in the Netherlands. Under (ii), training as part of an improvement plan or redeployment could be considered.
In short, the costs of the training necessary to (continue to) perform the job cannot be recovered from the employee through a study costs clause, pursuant to the new Section 7:611a (4) of the Civil Code – such a clause is null and void.
Brief interlude to the Dutch situation
However, a dilemma arises (partly) in the Dutch legal profession. Anyone wishing to become a lawyer (or solicitor) in the Netherlands must take the professional training of lawyers (Dutch: ‘Beroepsopleiding Advocaten’). This training is required by law to perform the duties of a lawyer. Therefore, it can be argued that the aforementioned professional training falls under compulsory training within the meaning of Section 7:611a (1) of the Dutch Civil Code. After all, without (successfully) completing this training, the position of lawyer may not be exercised. In addition, it can be argued that professional training has been made compulsory for trainees under the Act on Advocates and is therefore mandatory under 7:611a (2) of the Civil Code. Regulated professions, however – as we now know – are excluded from the training obligation. As a regulated profession, the legal profession falls under the Professional Qualifications Directive. However, two lists circulate in the Netherlands regarding regulated professions, which causes confusion. These lists are i) Overview of regulated professions and ii) Annex to the Regulation establishing the list of regulated professions. The profession of lawyer is only mentioned in the list under I.
However, it is now the case that the explanatory memorandum to the Dutch Transparent and Predictable Conditions of Employment Act refers to the list mentioned under II) and not to the Overview. Strictly speaking, therefore, according to the explanatory memorandum, lawyer training would not fall under the exception to the training obligation, hence the employer would have to reimburse this vocational training free of charge. Price tag: 13k ex VAT!
In its ‘Considerations when entering into employment contracts with trainees’, the Netherlands Bar has included a point on the cost of professional training. The Bar states that there has not yet been a court ruling regarding what to do with the vocational training of lawyers so that the costs of the training can be included on the employee in a study costs clause (if the requirements of the Supreme Court ruling on Muller/Van Opzeeland are met). So the last word has not yet been said on this.
When are study costs recoverable through a study costs clause?
Exceptions also apply in this context. Training that is ‘nice to have’ (or non-compulsory), for instance making an employee more skilled, does not fall under the Dutch TPCE Act. Think, for instance, of a Applied University education or a course the employee wants to take out of his own interest. For these courses, the employer can include a study expenses clause, provided it meets the requirements of the Muller/van Opzeeland-ruling.
The TPCE Act – as a result of the Directive – curtails the possibility of recovering study costs from the employee. This far-reaching change in (Dutch) law entails major (financial) risks for employers. On the other hand, the law supports the legal position of the employee. However, there are still some gaps in the law regarding the payment of study costs for compulsory training.
For instance, the question arises: what to do with already concluded study cost clauses that cover both compulsory and non-compulsory training. Or, do training as a pilot, lawyer or accountant now also fall under compulsory training and thus be borne by the employer?
The final word has not yet been spoken on this. In addition, it does not appear that the Directive – with regard to training costs – has actually become more predictable or transparent in the Netherlands. The currently mentioned questions illustrate this all the more.
Answers to your question
It can seem overwhelming and often employers do not know exactly where and how to start.
ACG International is specialized and experienced in assisting companies with their employment matters.
ACG International’s managing partner, Edith Nordmann, has an expert qualification in labour law. She has been working as a lawyer in the field for over twenty years and can offer practical and strategic advice about employment contracts as well as help you with your employment matters.
In addition, as of 2023, Edith has been appointed as member of the Task Force Future of Work, Skilling and Mobility under the Business 20 (B20 (of the G20 2023)) – meeting with approximately 100 esteemed professionals from around the world specialised in the field of employment. The B20 is the official G20 dialogue forum representing the global business community. Established in 2010, the B20 is among the most prominent Engagement Groups in G20, with companies and business organisations as participants. The B20 leads the process of galvanising global business leaders for their views on issues of global economic and trade governance and speaks in a single voice for the entire G20 business community.
So, at ACG International you’re in great hands.
If you want to understand your obligations as employer you are at the right place. ACG International offers free “labour-regulation-check” strategy sessions to help employers assess what needs to be done to comply with the Dutch labour regulations. To book your free “labour-regulation-check” Strategy Session, send an email to firstname.lastname@example.org or call us at +31 20 800 64 00.