Netherlands – agediscrimination.info

Bronsgeest Deur Advocaten

www.bd-advocaten.nl

Overview

The constitution of The Netherlands (article 1) contains a general prohibition on discrimination. This article forms the basis of all Equal treatment legislation in The Netherlands. As per 1 May, 2004, The Netherlands has implemented the 2000/78/EG directive by means of the “Equal Treatment in Employment (Age Discrimination) Act” (ETEA) (”Wet gelijke behandeling op grond van leeftijd bij de arbeid”). This act prohibits direct and indirect distinction in employment relations on the basis of age, which distinction also covers intimidation. The scope of the ETEA encompasses: recruitment, selection and appointment of personnel, employment-finding, employment conditions, promotion and dismissal. The ETEA is also applicable to vocational secondary education (beroepsvoorlichting), career guidance, career orientation and the membership of employers- or employees’ organizations and/or occupational group(s).

In the Netherlands there are two specific situations in which age discrimination is allowed. The first one is a positive discrimination policy in order to stimulate the employability in certain age groups. The second one is the possibility for employers to terminate the employment contract of an employee as from the month he/she turns 65. Other exceptions to the ETEA are only allowed if based on an objective justification. This objective justification must comply with the requirements of legitimacy, efficiency and proportionality. This means that the purpose of the age discrimination has to be legit. By reaching this purpose a strong need of the company has to be fulfilled and this purpose may not be in conflict with other legislation. The measures for reaching the purpose should be efficient proportional and condition is that this purpose cannot be reached by means of another, non discriminating measure.

Who’s covered?

The ETEA covers all employees as well as public servants and professional practitioners. There is no specific group excepted from the scope of the ETEA. It is possible to deviate from the ETEA for a specific group of employees, however again only if this deviation is based on a objective justification.

What enforcement/remedies exist?

Provisions in e.g. an employment contract or a Collective Labour Agreement conflicting with the ETEA are void, to the effect that the employee does not have to invoke the voidableness but the provision will be void by operation of law.

If the employer makes a prohibited distinction on the basis of age in an employment situation, the employee or a representative of the employee, e.g. the Works Council, may file a complaint against the employer at the Commission for Equal Treatment. This Commission is an independent organ which operates nation wide. The Commission will determine whether there is a distinction on the basis of age being made and -if this is the case- whether this distinction is based on an objective justification.

The employer is also free to ask the Commission’s opinion about a policy in advance in order to check if the policy is not in conflict with the ETEA.

The judgements of the Commission for Equal Treatment are not binding. In most cases however, these judgements will be followed by the employer because of the Commission’s strong reputation.

Besides filing a complaint at the Commission for Equal Treatment, the parties can go to Court. The Court is not bounded by the judgement of the Commission. There are no criminal sanctions applicable.

How common are claims?

As of the implementation of the ETEA in May 2004, there have been more than 300 claims filed against employers on the basis of age discrimination at the Commission for Equal Treatment. In total the Commission dealt with over 1000 claims. In comparison with the other forms of discrimination, age discrimination represents one of the largest amounts of claims before the Commission.

In Court the claims on basis of age discrimination in employment relationships are significantly less common. Most employees find their way to the Commission for Equal Treatment, also because this procedure is free of charge.

What claims are most common and what are trickiest issues for employers?

There are being filed multiple claims brought by employees stating that the Social Plan and/or Collective Labour Agreements contains a discrimination for older employees. For example most Social Plans contain arrangements for severance payments for the employees. For older employees (mostly 55+) there are usually different arrangements containing that they will not be entitled to a severance payment but will receive a supplementary payment on their Social Security benefit for the period up to their pension date. The Commission for Equal Treatment has already determined that these arrangements discriminate older employees on the basis of age and in most cases there is no objective justification applicable.

Also common are claims brought by employees on the basis of age limits in job vacancies. For example a supermarket which had a policy to only hire employees under the age of 20 because they are entitled to lower wages. This is directly in conflict with the ETEA and –according to the Commission- has no objective justification. The policy is of course effective, however does not comply with the conditions legitimacy and proportionality. Also asking for experience can be considered as (in)direct age discrimination.

Are there any specific exceptions in your laws?

There are two specific exceptions allowed in the ETEA. The first one is that the prohibition on distinction on the basis of age is not applicable if the distinction provides in an employment policy which stimulates the employment of certain age categories. This policy must be determined by law.

The second one is that the employer is allowed to terminate the employment contract as from the month the employee reaches the age of 65. The objective justification in these cases is considered implied.

Retirement ages

Dismissal on the basis of age is only specifically allowed in the situation the employee turns 65. If the pension-age is set before the age of 65, this has to be based on an objective justification and thus comply with the requirements of legitimacy, efficiency and proportionality. The objective justification is being applied very strict and there are very few examples in which an earlier pension-age is allowed. For example, circulation of personnel and decrease of motivation when getting older, do not count as reasons for objective justification.

Interesting cases

Recently the Union AVV (”Alternatief voor Vakbond”) has filed a request at the Commission of Equal Treatment to judge wheter the so called “Cantonal Judge Formula” is in accordance with the ETEA.

The Cantonal Judge Formula is the formula which the Cantonal Court in The Netherlands applies -when dissolving an employment contract- to determine the amount of severance payment. The formula is as follows:

A x B x C, for which:

A = number of years of service

B = employee’s monthly gross salary

C = correction factor

For determining the number of years of service, the employee’s age is relevant: if the employee is 40 years or younger, then the years of service are to be multiplied by 1. If the employee is between 40 and 49 years of age, the years of service are to be multiplied by 1.5. Years of service since the age of 50 are to be multiplied by 2. These factors are applied cumulatively.

The Union states that the formula directly and indirectly discriminates on the basis of age. Direct because dependent on his age the employee is entitled – due to the multiplying factors – have right to a higher severance payment. Indirectly because the amount of severance depends on the number of years of service and older employees usually have more years of service.

According to the Union this Cantonal Judge Formula contributes – together with discriminating arrangements for older employees in Social Plans and Collective Labour Agreements as described above under “most common claims”- to a negative image of older employees. The prejudices on older employees, more expensive, less flexible and unhealthy, are being maintained.

So far, the Commission of Equal Treatment has not reached a verdict on this issue. Possibly the indirect discrimination will be allowed as rewarding loyal service may be a ground for objective justification. It is however very likely that the direct discrimination will be considered in conflict with the ETEA. It could also be possible that the Commission declares itself unauthorized to review the Cantonal Judge Formula because this does not fall under the scope of the ETEA.

If the formula will be judged in conflict with the ETEA and no objective justification applies, this could have a serious impact for the labour law practice in The Netherlands.