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Pay in different forms of labour relationships

Pay in different forms of labour relationships

By: Merel Keijzer, LLM: PhD Candidate Labour Law at Utrecht University Faculty of Law, Economics and Governance – Department of Law (International and European Law)
 
While there may be various reasons for doing one’s work, people work first and foremost to earn a wage; after all, they must have an income for meeting their daily expenses. Because of the importance of wage, Dutch labour law has several compulsory rules on wages of employees. To start, the salary must be at least the statutory minimum wage. Furthermore, Dutch labour law requires that the employer provides the employee with a specification in which, among others, the amount and the term of the salary are specified. This information has to be provided within the month the work has started. In case of piecework pay, the specification must contain the amount of salary per piece, the amount of available work per day and the time needed to get one piece of work done. These labour law provisions provide transparency for the employer and the employee and aim at protecting the employee, who is the ‘weaker party’ in the employment contract.
While most labour relationships in the Netherlands are still based on employment contracts, an increasing number of companies have chosen to outsource (parts) of their production process to other companies or to self-employed persons. Outsourcing is visible in the following forms: temporary agency work, secondments, payrolling, contracting and platform work.
Outsourcing of work establishes so-called atypical labour relationships. Often intermediaries are involved, who give the relationship a triangular dimension and ask fees for their role in the outsourcing-process. In such atypical labour relationships it is not always clear whether Dutch labour law provisions have to be applied and if so, whether these provisions can offer adequate protection to the pay of the workers. Currently a lot of these forms of outsourcing do not fall within the full scope of Dutch labour law. This causes and retains uncertainty as regards the salary, in particular its amount, the way in which the level of wage is determined or should be determined (moreover if algorithms are involved), the moment the wage has to be paid and who is responsible for the payment.
This lack of transparency in atypical labour relationships with regard to labour conditions in general, and pay in particular, is not only an issue in the Netherlands. All around Europe and even the world, stakeholders question what would be the best approach in offering adequate legal protection to workers in these atypical labour relationships. At EU level the European Commission recently adopted the ‘Directive on transparent and predictable working conditions in the European Union’. In contrast with the Commission’s former policy, the Commission added a definition of the term ‘worker’ to this directive in order to ensure that people working in a-typical labour relationships will fall within the scope of this directive when they meet certain criteria.
The aim of this research paper is to clarify the context with regard to how and by whom pay of the actual workers in a-typical labour relationships is currently established and eventually paid to the workers. For this reason, the paper will contain an analysis of two elements: the establishment and the actual payment of the pay. The analysis of these two elements will be carried out with regard to the traditional labour relationship and five forms of atypical labour relationships: temporary agency work, secondments, payrolling, contracting and platform work.
The analysis will result in schematic overviews of the transactions, concerning pay, between the parties in the different labour relationships. The overviews will also focus on possible fees, sums or percentages of the pay that are withheld by companies (e.g. as done by Helpling and Uber) in the outsourcing-process before paying the pay. The outcome of the analyses of the different labour relationships will be compared with each other. By looking at the forms of outsourcing in which no problems occur, this comparison will highlight the factors in the atypical labour relationships that possibly do cause problems with regard to pay. By doing so an appropriate approach can be found for reducing or solving problematic pay issues in a particular form of labour relationship. The paper will conclude with recommendations for such approaches.