What is the hirer’s remuneration?

Hirer’s remuneration is a term from the ABU collective bargaining agreement for temporary workers (referred to as the “wage parity provision” in the NBBU collective bargaining agreement ). Under the Act on the Allocation of Workers by Intermediaries (WAADI), the temporary employment agency must apply the wage parity provision. This means that the employee is entitled to the same wages and allowances that the client pays to its own employees in the same or equivalent positions. In the WAADI, this is set forth in Article 8, which concerns the equal treatment of employees.

According to the SNCU, the application of the client-provider wage is based on information provided by the client regarding:

job category;
wage amount;
application of reduced working hours;
the amount of the periodic raise;
the amount and timing of the initial wage increase;
expense reimbursements;
The Court of Appeal in The Hague finds that the inconvenience allowance is also included in this, but the NBBU disagrees.

What was the issue?

The case was filed by a former employee of Arrow, Ms. X. Arrow is engaged in providing (primarily Eastern European) temporary workers to third parties (including) in the meat-processing industry. On July 23, 2014, Ms. X was hired by Arrow as a temporary worker for a period of 26 weeks in the position of general staff member. The NBBU collective bargaining agreement for temporary workers (hereinafter the “NBBU CBA”) was declared applicable to the temporary employment contract (Phase 1). On January 19, 2015, the parties entered into another temporary employment contract (Phase 2) with a term of 104 weeks. On June 27, 2016, the parties entered into a temporary employment contract for a term of 12 months (Phase 3). Ms. X was alternately assigned by Arrow to various client companies as a general employee or as a meat production worker. At the time, these client companies were members of the Central Organization for the Meat Sector, which is a party to the Collective Bargaining Agreement for the Meat Sector. The Collective Bargaining Agreement for the Meat Sector was declared generally binding for the periods from November 11, 2014, to March 1, 2016, and from March 3, 2017, to November 1, 2017. When the employment relationship was terminated due to disability, Ms. X claimed, among other things, retroactive payment of a transition allowance, calculated based on the wages specified in the NBBU collective bargaining agreement and the Collective Bargaining Agreement for the Meat Sector, and underpaid wages (which also affects sick pay, vacation days, and the calculation of the vacation allowance), because Arrow wrongfully failed to comply with the Collective Bargaining Agreement for the Meat Sector.

What did the court of appeals rule?

Article 22 of the NBBU collective bargaining agreement provides as follows:

Paragraph 1. The wages and allowances of the temporary agency worker shall be equal to the wages and allowances granted to employees working in equivalent positions in the service of the user company. This wage parity provision serves to protect stability in the labor market and is included in Article 8 of the Act on the Allocation of Workers by Intermediaries (WAADI).

Paragraph 2. The wage parity requirement covers the following components:

Exclusively the applicable period wage within the pay scale;
The applicable reduction in working hours. This may—at the discretion of the temporary employment agency—be compensated in time and/or money;
Premiums for overtime, shifted hours, irregular working hours (including public holiday premiums), and shift work;
Initial wage increase;
Tax-exempt expense reimbursements: travel expenses, lodging expenses, and other expenses necessary for the performance of the job;

The collective bargaining agreement (CBA) for the Meat Sector includes a scope of application provision. Such a provision means that if your company falls under one of these definitions, you are required to apply the CBA.

The scope of application provision in the collective bargaining agreement for the Meat Sector states the following:

“Temporary staffing agency in the sector” means:

the legal entity or natural person that, as a rule, makes temporary workers available to companies as described in paragraph 1 of this article for more than 50% of the total payroll, based on temporary employment agreements within the meaning of Article 7:690 of the Civil Code.
However, a temporary employment agency in the sector does not include a temporary employment agency that meets all of the following cumulative requirements:
The business activities of the temporary employment agency consist exclusively of the provision of workers as referred to in Article 7:690 of the Civil Code, and
25% or more of the total wage bill for that employer’s workers (temporary workers) is attributable to work performed in any branch of business other than those defined within the scope of this collective bargaining agreement, and
The employer assigns at least 15% of the total annual wage subject to social security contributions on the basis of temporary employment contracts containing a temporary employment clause as referred to in Article 7:691(2) of the Civil Code, and
The temporary employment agency is not part of a corporate group that is bound, either directly or by a declaration of general applicability, by the Collective Bargaining Agreement for the Meat Sector; and
The temporary employment agency is not a jointly agreed labor pool.

Based on this definition, the Court of Appeal held that Arrow fell within the scope of the collective bargaining agreement for the meat sector. This is because Arrow is primarily engaged in providing, for the most part, Eastern European butchers and slaughterers to third parties in the meat-processing industry and slaughterhouses.

In addition, the Court further states:

The fact that Article 22(2) of the NBBU Collective Bargaining Agreement does not explicitly mention allowances for inconveniences other than shifted hours and irregular working hours does not alter this conclusion, because this allowance (like the other allowances) can be considered part of the periodic wage. The provision in question does not contain an exhaustive list.

Because Arrow operates primarily in the meat sector, the Court found that it must have known, or could reasonably have known, that it was required to comply with the agreements set forth in the collective bargaining agreement for the meat sector. The Court does not believe that Arrow acted intentionally, but it did conclude that Ms. X was found to be in the right in this case.

What happens next?

The NBBU indicated during the proceedings that it disagrees with this interpretation. It argues that Article 22 of the collective bargaining agreement, as well as Article 8 of the WAADI, are intended to be exhaustive. It is possible that it will join Arrow in appealing this ruling to the Supreme Court.

This ruling proves once again that collective bargaining law is complex. As an intermediary, it is therefore virtually impossible to always be fully informed about the correct remuneration owed by the hiring company. Good communication and clear agreements with the hirer are therefore very important. The question in these types of cases is also whether a party, such as Arrow, can claim this back pay in the form of damages from the hirer. This will depend on the agreements made with the hirer.