The fight against social fraud: beware of staff loans
In principle, it is prohibited to lend staff to users that exercise employer authority over the workers.
This rigid principle was relaxed in 2000, since when it has been allowed to lend staff under service agreements to users that do nonetheless exercise a portion of the employer’s authority over the workers. For example, obligations complied with by the user in relation to welfare at work, or instructions given by the user in performance of the service agreement in relation to working time and rest periods and regarding performance of the contracted work are deemed not to count as a prohibited transfer of authority.
With a properly drafted service agreement, it is therefore possible to lend workers to third parties for certain assignments, even with a limited transfer of authority.
The government has retightened these rules in its Programme Act.
It continues to be possible to lend workers to users with a transfer of authority. Compliance with welfare obligations by the user continues to be permitted in all events, without that creating a prohibited loan of staff. Other instructions are only possible, however, provided that:
an underlying written contract has been signed between the third party and the employer;
the contract expressly provides in detail what instructions the third party can give to the workers;
the third party’s right to give instructions does not render the employer’s authority bereft of content; and
actual performance of the contract is in full accordance with the express terms of the contract.
Immediately any of the four conditions is not met, there will be deemed to be a proscribed transfer of authority and a prohibited loan of staff. The penalties remain unchanged: the user and the employer are liable to criminal penalties and administrative fines, plus the user is deemed to be in an open-ended employment relationship with the employee. User and employer are both jointly and severally liable for social security contributions, wages and other benefits.
An important new provision is that the user’s employee organisations (works council, failing which health and safety at work committee, failing which trade union delegation) have to be informed immediately of the existence of the agreement between the employer and the user. If the works committee members ask, the user also has to provide them with a copy of that part of the contract setting out what instructions the user might be able to give the employee. If the user refuses, there is deemed not to be any written agreement. How the duty of information is exercised in practice still has to be set down in secondary legislation (a royal decree).
Lending staff to third parties is thus made more difficult again, though not impossible. Above all, a properly drafted agreement is needed between user and employer clearly setting out the bounds to the exercise of employer authority and listing the instructions that can be given by the third party. It is best to make necessary arrangements regarding instructions on working methods and organisation, working time, etc. In so doing, you have to ensure that the employer’s actual authority is not denuded of content: disciplinary matters, dismissals and fixing wages go too far, but how far you can go is not stated precisely by the new rules. In all events, we advise you to check both new and existing arrangements in terms of the new rules.
What poses more danger is the fact that you also have to stick closely to the agreement when actually performing it. Proper monitoring is therefore needed, especially for long loan periods. Finally, the duty of information vis-à-vis employee organisations can result in bothersome disagreements regarding the need for outsourcing or for deploying outside personnel.
The rules came into force on 10 January 2013.
A social bazooka, or much ado about nothing: the social anti-abuse provision?
By analogy with the tax anti-abuse provision, the Programme Act has instituted a social anti-abuse provision in the fight against evasion and avoidance of the social (security) laws.
If inspectors can produce evidence (using any means allowed by law) deeming there to be social (security) law abuse, they can regard the transaction constituting that abuse as non-binding against them. There is deemed to be abuse of social (security) law when any person cites (classification of) a legal transaction to place himself either under or outside the ambit of social (security) law. If the manpower inspectorate can show the existence of abuse, you can only render the transaction binding on it if you can prove that you had no intention to avoid or evade the law.
The provision is particularly broad and, according to the legislative history, is aimed at abuse as regards both social security contributions and benefits. In other words, if you set up a construction aimed at evading social security contributions, the manpower inspectors can cite the new rule to ignore the construction and still demand payment of the social security contributions. The construction itself is not deemed void, and continues to apply between the parties or vis-à-vis any other party.
Whether this really becomes a social (security) inspector’s bazooka remains to be seen. In any event, it is clear that the fight against social (security) fraud is one of the government’s top priorities and that it would seem to be getting easier for inspectors to prove and penalise social (security) abuse.
In principle, the rule came into force on 10 January 2013, but a royal decree and a recommendation from the National Labour Council are still needed before it is fixed what forms of abuse the rule strikes at in particular. Until then, the anti-abuse provision is of no effect and inspectors cannot yet rely on it in practice.
Non-recurring results-related benefits
Non-recurring results-related benefits are benefits linked to the collective results of a business on the basis of objective criteria. It is worth noting that these benefits qualify for favourable social security and tax treatment, both for the employer and the employee.
The government has decided to (partly) put an end to this beneficial scheme, thus reducing its attractiveness.
Whereas gross equalled net in the past, the employee will now still have to pay a solidarity contribution of 13.07%. In addition, the special 33% employer contribution continues to be due.
The favourable tax treatment continues to apply.
That said, the maximum figure is raised to EUR 3,100 per calendar year (instead of EUR 2,488 for 2013).
The measure came into effect on 1 January 2013. According to the social security administration and the parliamentary proceedings of the law, this measure also applies to benefits referring to 2012 and payable in 2013.