The Netherlands: Ban on side jobs to be prohibited?

As of August 1, 2022, it will be more difficult for employers in the Netherlands to prohibit employees from working for other employers. Employers will then be able to prohibit such work only if they have objective reasons that justify such a prohibition. This change does not mean that existing clauses regulating work for third parties will automatically become null and void, even if they state that the employee requires the prior written consent of the employer to carry out such work. However, if the employer has no objective reasons, then such clauses will be void. In that case, work for third parties will be allowed.

                Background: the EU Directive allows greater leeway for side jobs

The European Directive on transparent and predictable working conditions (the "Directive") was adopted in 2019. In addition to setting out a wide range of measures designed to provide employees with more secure and predictable working conditions, the Directive also contains new rules on working for other employers. For example, it requires EU Member States to ensure that an employer can no longer prohibit an employee from working for another employer or for themselves outside of agreed working hours. The goal is to lower the threshold for workers to engage in other work, on a payroll or as self-employed persons, in addition to their existing work. What will this actually mean for employers?

                No absolute ban on work for other employers

The Directive does not contain an outright ban on employees working for other employers. Nor does it entirely prohibit employers from imposing restrictions on “moonlighting.” Rather, it allows Member States to set conditions under which an employer can continue to place restrictions on an employee having multiple jobs. The employer must then have "objective reasons" that justify such restrictions.

                Such objective reasons can provide justification for imposing restrictions on side jobs

The Directive provides four examples of objective reasons that could provide such justification:

  • health and safety;
  • protecting business confidentiality;
  • integrity of public services; and
  • avoidance of conflicts of interest.

As we only have examples to go on, other justifications are also possible.

                Deadline for implementing the Directive: August 1, 2022

The EU Member States have until August 1, 2022 to transpose ("implement") the Directive into their own national laws. Consequently, the bill for the implementation of the Directive on transparent and predictable terms of employment is now before the House of Representatives. According to the bill, the law will include a clause under which an employer that prohibits or restricts the employee from performing work for other employers outside the times when work must be performed for that employer will be null and void unless there are objective reasons to justify that clause.

                Does this mean that clauses on working for other employers will be null and void?

Does this mean that existing clauses regulating work for third parties will become automatically null and void if the current bill makes it into law? No, fortunately that is not the case. The fact is that employers will not be required to include the objective reasons in the actual clause on other work. (That requirement, however, likely will apply to, for example, non-competition clauses in fixed-term employment contracts, for which there can be justification on the basis of compelling business or service interests.) Generally, the employer will therefore have to provide objective justification once it actually invokes the clause against an employee. If it is unable to do so, the clause will be null and void.

                Will it be possible to include a clause on other work to the effect that the employer's prior consent is required in that regard?

Many employers have already included in such clauses a provision stating that work for other employers is allowed only with the employer's prior written consent. That provision will not make the clause automatically null and void. If an employer wants to avoid the clause becoming null and void, it should an objective reason for refusing the requested permission.

                Conclusion and recommendations

If the bill is adopted, it will be more difficult for employers in the Netherlands to prohibit employees from carrying out work for other employers. In that event, employers should bear in mind the following issues:

  • When drafting new clauses on work for other employers, consider including a provision that the employer will withhold consent to carry out work for other parties only if it has an objective reason for doing so;
  • If it is quite clear to the employer what objective reason would justify prohibiting outside work, the employer should consider including that reason in the clause. The employee will then know where they stand;
  • If the objective reasons are included in the clause, employers might wish to add an escape clause providing that other justifications may arise in the future that require the employer to maintain the prohibition on work being carried out for other employers.
