An employee who is seconded does not have an employment agreement with the company for which he actually works. However, when there is an employment relationship, the protective provisions of the Dutch Transfer of Undertakings Act (Wet overgang van onderneming) may still apply.

Personnel company and operating companies

Particularly in the case of larger groups, it has been common practice for years to have employees employed by a so-called personnel company (personeelsvennootschap). Often, this company does not carry out any other activities.

These employees within the group actually work for one of the operating companies within the group, on a secondment basis.

Transfer of undertaking

In the event of a transfer of undertaking, the rights of the employee are protected.

In case of a transfer of undertaking, the rights and obligations arising from an employment agreement between an employer (the transferor) and an employee working there, will transfer automatically to the transferee of the undertaking.

In the event of a transfer of undertaking, the European Directive, on which the provisions of the Dutch Civil Code (articles 7:662-7:666) (Transfer of Undertakings Act) are based, is aimed at protecting the employees with an employment agreement or an employment relationship with the transferred undertaking.

The provisions in the Dutch legislation seem to have a more limited scope. On the basis of the Dutch legislative text (article 7:663 of the Dutch Civil Code), only employees who have an employment agreement with the transferred undertaking, seem to be entitled to legal protection.

This would be an incorrect implementation of the Directive, since a limitation of the scope of the Directive by the national legislator is not allowed.

Supreme Court 5 April 2013

On 5 April 2013, the Dutch Supreme Court ruled as follows (LJN BZ1780).

From the legislative history of the Dutch Transfer of Undertakings Act, it is clear that the legislator has tried to correctly implement the Directive. By not including the term employment relationship in addition to the term employment agreement, the Dutch legislator did not have the intention to limit the scope of the Directive.

The fact that an employee does not have an employment agreement with the company for which he was actually working, does not exclude the applicability of the protective provisions of the Dutch Transfer of Undertakings Act.

This means that a seconded employee, in the event of a transfer of an undertaking where he actually performs his activities, can be covered by the protective provisions of the Transfer of Undertakings Ac.

source: rechtspraak.nl