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The Dutch law on allocation of workers by intermediaries (Waadi) explained

Updated: Aug 9, 2023

There are many misunderstandings about the applicability of the Waadi. Many think that the Waadi only applies to temporary employment agencies and payroll companies. People are therefore surprised when it turns out that the scope of the Waadi is broader than often thought and is not limited to the regular players in the temporary employment market. Time, therefore, to once again clearly explain what the Waadi entails, to whom the Waadi applies and what (often unforeseen) obstacles are encountered.


The Waadi


The Waadi is an abbreviation that stands for the law on allocation of workers by intermediaries. This law comes from the Ministry of Social Affairs and Employment (the Ministry "SZW ' in short) and was introduced in 1998 to better safeguard the rights of employees. Among other things, the law stipulates that outsourced personnel are entitled to the same working conditions as the client's "own" personnel. Compliance with the Waadi is monitored by the Ministry SZW. Failure to comply with the Waadi can result in high fines. I have seen fines of as much as € 12.000,- per employee pass by. The Waadi distinguishes between the mediation of labor and the provision of labor. In this article I will focus on the latter aspect in particular, i.e. the provision of labor. The provision of labor is defined in the Waadi as follows: the provision of labor against remuneration to another person for the performance of work under that person's supervision and management, other than pursuant to an employment contract concluded with that person.


Taking a closer look at the concept of " provision "


When we consider this legal definition more closely, it must therefore involve:

  • Two companies, whereby one company places a labor force at the disposal of the other company;

  • For this posting, the company that provides the labor force receives compensation from the hiring company;

  • The hiring company is the supervisor of the posted worker.


In other words, if a company makes one or more workers available to a third party for remuneration, the Waadi applies. Whether the company provides labor force structurally or incidentally is irrelevant, as it is not a criterion. Already in the situation of a one-time provision of a labor force to a third party for remuneration, the Waadi applies.


However, the Waadi excludes three situations (read: then the Waadi does not apply). The Waadi does not apply to the provision of services in the above-mentioned sense:


a. for the benefit of a delivered good or a created work (e.g. the landscaping company that, by order of a customer, deploys its employees to create a garden);

b. in the case of collegiate lending on a temporary, non-profit basis;

c. the hiring and lending of labor on a group basis (for example, between parent and subsidiary companies or between sister companies maintained by the same entrepreneur).


The Waadi is not only for employment agencies


It is therefore clear from the above that the Waadi does not only apply to employment agencies, but that its scope of application is much broader. The Waadi applies to any company/legal entity that provides labor for remuneration. Even companies that have salaried employees and for whatever reason (with the exception of the three exceptions discussed) place them with a third party for remuneration in order to perform work there under the third party's supervision fall within the scope of the Waadi. And that already starts with a one-time incidental posting.


Important legal consequences


The wide scope (or perhaps better said: the rapid applicability) of the Waadi leads to a number of obligations that were perhaps not immediately foreseen in advance. I will elaborate on two obligations below, namely the Registration Obligation (Section 7a) and the Ban on Obstruction (Section 9a).


Previously, I cited the example of the landscaping company that deploys its employees to carry out a customer's order to build a garden. In that situation, the Waadi does not apply. But then the ICT company that makes its own employees available to a customer to create or implement and roll out new software under the direction and supervision of the customer's Head of ICT. Then the Waadi does apply, because the definition of the provision of labor is met. And then, in principle, the ban on hindrance also applies if the client wishes to take over one or more employees at the end of the project.


Is there nothing to object to? Yes, the second paragraph of Section 9a of the Waadi offers the possibility to include in the hiring contract (i.e. to stipulate in advance) that the hirer will owe a reasonable fee for the services provided in connection with the posting, recruitment, selection and training of the temporary worker/detached worker when the temporary worker/seconded worker commences employment. Furthermore, it can be considered that the situation of working under the direction and supervision of the hirer does not occur as much as possible. In practice, this means as much as possible giving your own interpretation to the assignment and direction from your "own" employer. One can also think of closing long-term assignments since the ban on hindrance applies after the end of the posting (and not during a posting).


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