Be cautious when setting a fixed number of hours for zero-hour contract employees. Ensure that a fixed number of hours is not interpreted as a permanent contract!

The Wet Arbeidsmarkt in Balans (WAB) requires an employer to offer a fixed number of hours for the upcoming year to employees on zero-hour contracts after the contract has lasted for 12 months. This fixed number of hours should be at least equal to the average number of hours worked in the previous 12 months. However, the employee is not obligated to accept this "conversion" of flexible hours into a fixed number of hours. If the employee wishes to remain flexible, they may reject the offer, and the arrangement will remain unchanged.

A fixed number of hours does not automatically equate to a permanent contract. Employers should be cautious with communication and carefully select the right wording to avoid misunderstandings. In this post, I will discuss a recent ruling by the Amsterdam court (ECLI:NL:RBAMS:2020:5420), in which the employer (perhaps rightly) avoided further complications.

The Case

The employee started working on October 1, 2018, under a zero-hour contract as a ticket seller. The employment agreement was extended multiple times as follows:

• Employment Agreement I: October 1, 2018 – December 31, 2018

• Employment Agreement II: January 1, 2019 – July 31, 2019

• Employment Agreement III: August 1, 2019 – July 31, 2020

  
  

Initially, a three-month contract, followed by a seven-month contract, and finally, a one-year contract. All were on a zero-hour basis. No issues arose until now.

On January 28, 2020, the employer informed all its zero-hour employees, including the employee in question, about the consequences of the WAB entering into force. The letter included the following:

“Effective January 1, 2020, the Wet Arbeidsmarkt in Balans (WAB) has come into effect. One of the changes introduced by this law concerns working on a zero-hour contract: after 12 months of working under such a contract, the employee is entitled to a fixed-hour contract based on the average number of hours worked in the preceding 12 months.

We offer you an employment contract with a fixed working time of 352.2 hours per year.

If you accept this offer, your zero-hour contract will be converted to a contract with fixed hours starting January 1, 2020.”

The employee accepted the offer on February 11, 2020.

On April 21, 2020, the employer sent another letter stating:

“(…) We are pleased to offer you an employment contract confirming that as of January 1, 2020, you are in permanent employment (…)”

A new employment contract was attached.

On June 22, 2020, the employer informed the employee that the employment contract would not be renewed and would automatically terminate on July 31, 2020.

The employee disagreed with this, went to court, and requested a declaration that a permanent employment contract had been established as of January 1, 2020. The employee also requested the court to declare the termination of the contract as of August 1, 2020, invalid, with continued salary payments.

The employee argued that he was entitled to a permanent contract and that he had relied on the employer’s offer. He emphasized that the phrase "permanent employment" in the letter of April 2020 indicated that a permanent contract had been offered. The April 2020 employment agreement contained not only the change in hours but also other changes, such as a confidentiality clause. Although the WAB does not obligate employers to offer a new employment contract, the employer had chosen to do so, making this the fourth employment agreement, which in the employee's view would result in an indefinite-term contract.

The Court's Decision

The court sided with the employer, ruling that, contrary to the employee's claim, no fourth temporary employment contract had been concluded on April 21, 2020. Rather, the contract had been amended to a fixed-hour contract, with the remaining term of the previous zero-hour contract continuing. The addition of an extra provision due to a new collective agreement did not change this. The mere mention of “permanent employment” in the offer letter was not sufficient to create a permanent contract.

Commentary

In this case, the employer narrowly avoided further issues. However, I would not conclude that simply changing parts of the contract other than the end date (such as the job title) will not result in a new contract in the employment chain. Employers must be cautious with communication and use precise language. While there is no obligation to enter into a new employment contract, an employer can simply document the fixed hours in writing, even in the form of a letter.

Milan Gaber