The most important points to consider when seconding employees.

Introduction to secondment

Secondment is the temporary assignment of an employee who remains employed by their own employer, the lender, to perform work at or for a third party, the hirer, under the direction and supervision of that hirer. Secondment offers companies flexibility, access to scarce expertise and the ability to scale up and down.

At the same time, it entails clear legal and practical obligations for both the lender and the hirer. This blog provides an overview of each topic.

Waadi and secondment

The Labour Allocation by Intermediaries Act (Waadi) applies to the provision of workers, including secondment. The basic principle is equal treatment between workers and the prevention of abuses. Important themes are registration, hirer’s remuneration, information obligations, prohibition of obstruction and prohibition of strike replacement labour.

Registration requirement with the Chamber of Commerce

If you provide workers as a lender, this activity must be explicitly stated on your extract from the Chamber of Commerce (KvK). Hiring from unregistered lenders is prohibited. Register this and ensure that you can demonstrate it. More information can be found on the KvK website.

Hiring remuneration (equal treatment)

Seconded workers are entitled to at least the same remuneration, including essential terms and conditions of employment, as employees of the hirer in a comparable position. This may be interpreted broadly and includes, among other things, wages, bonuses, holiday pay, overtime pay, pension, working hours and holiday leave. Does the hirer have a collective labour agreement (CLA) in place? If so, the essential terms and conditions of employment are laid down in that agreement and you must follow the wage scale set out in the CLA. As the lender, you must ensure that the seconded employee receives at least the hirer’s remuneration. The lender is obliged to provide this information to the hirer.

The risk of underpayment is a wage claim from the seconded employee and possibly an additional tax assessment from the tax authorities.

In practice, secondment often involves highly educated specialists who earn more than the hirer’s permanent staff. Always enquire in advance about the applicable terms and conditions of employment at the hirer.

Information obligations

In order to apply the correct conditions, the hirer must provide all relevant information in good time (job title, collective labour agreement, salary scale, allowances, working hours, etc.). As a supplier, you are obliged to request and process this information.

As a supplier, you are obliged to confirm the identity of the seconded employee to the hirer. When deploying non-Dutch seconded workers, you must also check the validity of work permits. Both parties, the hirer and the lender, can be checked by the labour inspectorate. As a lender, you must then also inform the seconded worker of the identity of the lender.

Prohibition of obstruction

You may not prevent the seconded employee from entering into employment with the hirer after the end of the secondment. This is known as the prohibition of obstruction. The prohibition of obstruction does not apply during the assignment and does not apply to other lenders. During the secondment, you may therefore make agreements with the seconded employee about competition, including with regard to other lenders.

You may agree on reasonable compensation with the hirer in the event that the seconded employee enters into direct employment with the hirer after the secondment. What is reasonable depends, among other things, on the costs incurred by the hirer, such as training or recruitment costs, and the duration of the assignment. The longer the assignment lasted, the more the hirer was able to earn from it.

Prohibition on strike replacement work

It does not happen often, but it is explicitly stated in the law: you may not make workers available to replace employees who are involved in a strike or occupation at the hirer’s premises.

Possible future bottlenecks

Are you starting to second staff and want to draw up a contract with the hirer? Then consider the following topics. A contract does not prevent all disputes, but it does offer transparency and guidance for dealing with them. Clearly state in your secondment agreement how you will deal with the following situations:

• the seconded employee falls ill: who arranges a replacement and when?
• a labour dispute arises between the seconded employee and the hirer, as a result of which the secondment cannot continue: can the seconded employee remain in the employment of the lender and is there suitable work available?
• The hirer wants to take over the seconded employee: under what conditions is this permitted?
• The hirer requires the seconded employee to follow a training course: who bears the costs?
• The seconded employee suffers an accident at work at the hirer’s premises, or causes damage to the hirer or a third party: who is liable?

The division of liability in the case of secondment is legally complex.

In principle, formal employer liability remains with the lender. The hirer has a duty of care towards the seconded employee, because the actual management and supervision during the work at the hirer’s premises lies with the hirer. This duty of care includes, for example, ensuring a safe workplace and clear work instructions. In the event of damage or an accident, liability may be shared, depending on the circumstances. In practice, the hirer, as the material employer, is often successfully held liable because the hirer has influence over the daily work. Exceptions occur, for example, when the lender demonstrably fails to fulfil its own obligations (such as not checking the required certificates), or when there is intent or deliberate recklessness on the part of the seconded employee.

Contractually, liability can be (partially) excluded or limited. Complete exclusion is not possible; a reasonableness test still applies. Insurance for corporate liability and/or professional liability is recommended.

Points of attention for lenders

Regularly evaluate whether the seconded employee is working under safe conditions and whether risks and safety protocols are known. Ensure good administrative processes: time registration, expense claim processing, relevant certifications and training, legal identification requirements and work permits, and file creation in accordance with the GDPR.

Points of attention for the hirer

As a hirer, you have your own obligations and risks. Below are the most important points and practical mitigations. Employer’s liability also applies to the hirer. Make sure you are insured for this. Have the hirer confirm that the seconded employee is being paid correctly. Ensure that the lender pays the correct taxes and social security contributions. Find out whether the seconded employee has the required certificates and any training requirements. Check whether the lender has registered the secondment as an activity with the Chamber of Commerce.

When deploying non-Dutch seconded employees: ensure that the lender provides identity documents to the extent permitted and that you check the work permits. Both the hirer and the lender can be inspected by the Labour Inspectorate and cannot hide behind each other. Everyone in the chain is liable for non-compliance with legal obligations.

Conclusion

If you start seconding or hiring out staff, you as the lender or borrower have clear obligations regarding registration, equal pay, information requirements, the prohibition of obstruction and identification requirements. Lay down contractually how you deal with common bottlenecks, limit and distribute liability carefully and insure yourself against remaining risks. This will reduce legal uncertainty and create peace of mind for all parties involved.