22 January 2024

Prohibition on restrictions and self-employed persons

By Seliz Demirci

The question regularly arises whether a supplier can prohibit the personnel it deploys - agency workers and seconded workers - from being employed by the hirer.

The answer to this can be found in the Placement of Personnel by Intermediaries Act (Wet allocatie arbeidskrachten door intermediairs, Waadi). This is because the Act includes a prohibition on restrictions.

The prohibition on restrictions means that a supplier may not restrict personnel it deploys from being employed by a hirer after the end of the deployment. This prohibition on restrictions only applies after the end of the deployment. A supplier may therefore prohibit personnel from joining the hiring organisation during the deployment. Where a supplier nevertheless agrees on a prohibition on restrictions clause with personnel to prevent them from being employed by the hirer, the clause is invalid. Moreover, the prohibition on restrictions applies to personnel who have employment contracts with the supplier, often agency workers and seconded workers. The supplier can therefore validly agree with a self-employed person that they may not work directly for the supplier after the deployment.

Prohibition on restrictions

This issue arose recently in a case. A supplier had entered into a contract for the provision of services with a self-employed person. On this basis, the self-employed person performed work for the hirer on behalf of the supplier. A non-solicitation clause had also been agreed: the self-employed person was prohibited from working for clients of the supplier. The application of the Placement of Personnel by Intermediaries Act, containing the prohibition on restrictions, was excluded in the contract for the provision of services. Some time later, the self-employed person decided to work directly for the hirer, i.e. without the supplier’s intervention. He ended the contract with the supplier. The supplier argued that he could not do this and referred to the non-solicitation clause.

Position

The self-employed person took an interesting position. He argued that he had an employment relationship with the supplier, and was in fact an employee. As a result, the prohibition on restrictions applied and the supplier should not therefore have prohibited him from working for the hirer. The subdistrict court agreed with this position. The decisive factors included the fact that the self-employed person was obliged to perform his work personally and was therefore not at liberty to perform the work as he saw fit. In addition, he was completely dependent on the supplier for his income. Moreover, no distinction was made between him and salaried employees. It also appeared that the hirer had substantive authority and the self-employed person had therefore worked under its management and supervision. As a result, the relationship between the self-employed person and the supplier was an employment relationship. The self-employed person could therefore not be prohibited from working directly for the hirer.

Court of Rotterdam, 24 March 2023, ECUI (abridged): 2602

Important information to bear in mind

Does your organisation ever hire employees? If so, then it is good to know that if the management and supervision lie with your organisation, the hired employee is in principle free to join you, despite being bound by a non-solicitation clause.

Risk

Therefore, it makes no sense for the supplying party to include an exclusion in its general terms and conditions, given that such a clause falls under the prohibition on restrictions of the Placement of Personnel by Intermediaries Act. If the supplier does prohibit this, it runs the risk that the entire non-compete or non-solicitation clause will lose its effect.

Compulsory certification

It is also worth noting that the government plans to create a compulsory certification system for employment agencies by 2025. The certification obligation will apply to all organisations engaged in the deployment of personnel in the Netherlands, as referred to in the Placement of Personnel by Intermediaries Act.

Additional responsibility

Suppliers will soon only be permitted to deploy personnel if they are certified. Hirers will also have more responsibility: they will only be allowed to hire personnel from certified employment agencies.

More information

Do you have any questions? Please do not hesitate to contact us.

This article appeared earlier in Rendement.

Seliz Demirci

Seliz Demirci

Lawyer

Within the Employment & Pension law section, Seliz advises national and international employers and employees on various employment law issues.

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