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Self-employed or employee after all? Carriers beware!

Updated: Aug 9, 2023

In the transport sector, it is increasingly common for carriers to employ self-employed persons as drivers so that no employment contract needs to be concluded. However, when regularly or repeatedly engaging a self-employed driver, a carrier runs the risk of having it subsequently determined by the tax authorities and/or a court that an employment contract, rather than a contract for services, was involved. This blog will discuss why it is possible that, despite a driver being employed as a self-employed driver (multiple times) by the carrier, there may still be a legal employment contract (in retrospect).


Why does it matter whether there is an employment contract or a self-employed construction? Because the difference in qualification has different legal and tax implications for carrier and driver. For example, a driver working under an employment contract enjoys more legal protection than the self-employed driver. In case of dismissal, for example, the employee-driver can claim a transitional compensation. The carrier must also pay employer contributions on his behalf.


What constitutes an employment contract?


Whether there is an employment contract depends on a number of established elements. First, it is worth noting that a clause that reads "The parties expressly state that they do not intend to establish an employment relationship in any way" is not in itself sufficient to conclude that no employment contract has been agreed.


Thus, the qualification question does not consider the intent of the parties. What matters is whether the agreed rights and obligations meet the legal description of an employment contract. This description can be found in Article 7:610 of the Dutch Civil Code. According to the Article, several requirements must be met. There must be:

  1. a personal performance of work by the employee;

  2. for a certain wage;

  3. for a specified period of time;

  4. while being in a relationship of authority.


The latter criterion in particular is of decisive importance. If the facts and circumstances show that these criteria are met, then despite the (explicit) intention of the parties not to establish an employment contract, there is indeed an employment contract. Viewed from this perspective, the Amsterdam subdistrict court therefore ruled that the agreements between Uber and Uber drivers had to be qualified as an employment contract. Even though they were working on the basis of a self-employed construction.


It is therefore important to analyze, using the four criteria mentioned above and based on the specific facts and circumstances, whether there is (not yet) an employment contract. This is also very relevant in the transport sector. It regularly happens that carriers repeatedly use the same driver on the basis of a self-employed construction. For example, a driver is offered separate rides each time, depending on the busyness and supply. At the same time, there is a chance that the carrier also has a relationship of authority to the driver. This already makes it possible to speak of a hidden employment contract.


Consequences of qualification


It may be more favorable for a driver to invoke an employment contract (after the fact). This is because he receives more legal protection than the self-employed worker. The transition compensation has already been mentioned, but one can also think of salary continuation during illness and dismissal protection.


If there is a self-employed worker, the employment protection does not apply. However, he does enjoy tax benefits. The principal carrier does not have to pay social employee contributions and the driver can make use of tax deductions, such as the self-employment deduction. The principal carrier therefore also runs the (fiscal) risk that the tax authorities (in retrospect) assess the self-employed construction as an employment contract, as a result of which the carrier can soon face a fiscal claim regarding underpaid employer contributions.


Both forms of contracts have their own advantages. For the driver, the advantages of the employment contract are mainly in the legal (dismissal) protection, whereas with self-employed drivers it is the financial advantages that stand out. From the carrier's position, a self-employed construction is more attractive than an employment contract. He can then easily terminate the agreement with the self-employed driver, and is not limited by the legal system of dismissal protection that the employee driver is allowed to use.


Conclusion


Carriers should be careful not to make use of (bogus) constructions where on paper there is a self-employed relationship, but in fact it is an employment contract. The difference in qualification has consequences for the rights and obligations of carrier and driver. Carriers, pay attention! Wolfs Advocaten will be happy to meet with you to analyze the actual situation.


Want to know more?


Do you have questions about employment contracts or self-employed constructions within your transport company? Or do you have questions about labor law and transport law in general? Feel free to contact one of our lawyers.

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