Employee entitled to indefinite employment agreement after fifteen years: court sets aside clause in collective labour agreement

The chain rule and successive employment

Under the chain rule, an employer can enter into a maximum of three temporary employment agreements with an employee, in a period of up to 36 months, with intervals of no more than six months. An employment agreement that exceeds these limits is entered into for an indefinite period.

The chain rule also applies to successive employment agreements between an employee and successive employers. This means that the length of and the number of employment agreements with successive employers is added together for the purposes of the chain rule.

Successive employership involves different (legal) employers who must reasonably be considered to be each other's successors with respect to the work performed. The classic example of successive employership is a temp agency worker who, after a period of temporary work, enters into employment with the hirer in (virtually) the same work. The hirer is then considered the successive employer of the temp agency. The previous temporary employment agreement counts in the chain rule, which means that the former temporary worker is entitled to a permanent agreement at his new employer sooner.

CLA-parties may deviate

The law gives CLA-parties the authority to deviate from the chain rule in case of successive employership to the disadvantage of the employee. The law sets no conditions or limits to this. Although strictly speaking this means that CLA-parties may determine that the chain rule does not apply at all in the case of successive employership, most collective labour agreements only partially deviate. Consider, for example, the deviation that previous temporary employment and/or secondment agreements count as one link in the chain, or as one link for a fixed – short – period. 

Although most CLA-parties make no or limited use of the option to deviate, a number of collective labour agreements completely exclude the chain rule in the case of successive employership. This is the case, for example, in the Dutch Universities CLA (Article 2.2. paragraph 5), but also in the Museum CLA (Article 4 paragraph 1). It is noteworthy that when the law was drafted, the government mentioned full exclusion as an example of "improper use" of the option to deviate, but nevertheless did not restrict it. In addition, several legal authors are of the opinion that the possibility to deviate without restrictions violates European Directive 1990/70/EC, which aims to prevent abuse through successive use of temporary employment agreements. We previously wrote an article to this effect on a case from the Arnhem-Leeuwarden Court of Appeal.

The Arnhem-Leeuwarden Court of Appeal ruled that the clause in the Dutch Universities CLA was not contrary to the law. The subdistrict court of Amsterdam reached a different judgment on a similar provision in the Museum CLA.

Employee had been with the museum since 2007

This case involved an employee who had worked for a museum as a tour guide since 2007 through a payroll company. From 2014, the employee worked on the basis of a services agreement with the payroll company, and from 2021 the employee joined the museum directly under a fixed-term employment agreement. The employment agreement was extended through 31 December 2022, and then ended by operation of law.

The employee believed that the employment agreement did not end by operation of law and that he was employed by the museum on the basis of an indefinite employment agreement, as a result of the chain rule in the case of successive employership.

Employment agreement and successive employer

First of all, the court ruled that the assignment agreement actually qualified as an employment agreement (we wrote an article about qualifying agreements). Thus, the employee had been working for the museum since 2007 under successive employment agreements with the payroll company. Next, the court ruled that the museum should be considered the employee's successive employer with respect to the work performed; giving tours.

Termination by operation of law unacceptable by standards of reasonableness and fairness

The museum refers to the clause in the Museum CLA which completely excludes the chain rule in the case of successive employership and argues that it was therefore entitled to enter into a fixed-term employment agreement. The employee argued that the CLA-clause was null and void. The subdistrict court considered that none of the parties had been party to the CLA-negotiations about the exclusion clause in the Museum CLA. The reason for CLA-parties to include this exclusion clause in the CLA, and whether the employees’ interests were taken into account in the process, is therefore not clear.

The subdistrict court did not answer this question further: it left open whether the provision in the Museum CLA was in conflict with (European) law. Instead, the subdistrict court ruled that it is unacceptable by standards of reasonableness and fairness that the employee's employment agreement with the museum could end by operation of law.

The subdistrict court considered important in this regard that giving guided tours was part of the museum's core tasks. The museum did not want to employ a permanent group of tour guides, but changed this policy in 2021. At that time the museum apparently did not feel the need to offer its existing tour guides an indefinite employment agreement with fixed hours. It thereby avoided being an employer for nearly 15 years, while the permanent group of tour guides continued to perform the exact same work for all those years. This is unacceptable by the standards of reasonableness and fairness.

As such, the employee had an indefinite employment agreement with the museum. Because the employee did not contest the (voidable) termination of the employment agreement, the subdistrict court ordered the museum to pay the transitional compensation, fixed damages, and fair compensation, plus statutory interest, and ordering the museum to pay the costs of the proceedings.

Does this ruling provide clarity?

Because the subdistrict court has not ruled on the legal validity of the provision in the Museum CLA, it remains unclear whether such a CLA-provision is allowed or not. For that, we will have to wait for a ruling by the Supreme Court in a similar matter, or action by the legislature to curb the statutory possibility of unlimited deviation. We will keep you informed of any developments.