10 March 2016

The artificial constructions law (Wet Aanpak Schijnconstructies - WAS)

HJF Lawyers

The artificial constructions law (WAS) has received a lot less publicity, but it is certainly no less relevant.

Chain liability

The most important change introduced by the WAS is intended to combat misuse of chain constructions. Since 1 July 2015 an employee can call upon not just his employer, but also the direct client of his employer, to pay wages that are owed in accordance with the law or collective employment agreement

Avoiding liability

A client can avoid liability by establishing that it is not his fault that the wages owed were not paid. In order to do this the client needs to have taken measures both in advance and after the event, to ensure that the correct wages were paid. In advance, the client can be expected to make sure that the price offered to the contractor is realistic to support the correct payment of the wages owed. In addition he can include provisions in the contract which oblige those performing an assignment or contractors to adhere to the ruling employment conditions, and he should only do business with companies that are registered in the businesses registry. Finally it can be important for the client, where possible, to choose certified contractors.   After the event the client may be expected to make an effort to put right any malpractices, for example by carrying out checks on compliance with employment conditions and ensuring that the lower link in the chain is in compliance, or by acting as a mediator.

Practical advice

The WAS has consequences that go beyond complicated chain constructions and underpayment by foreign employment agencies. The scope of the law is much wider. For example if your company were to engage an IT company to construct a new website, but halfway through the project the company went bankrupt, the employees of the bankrupt business could look to you, as client, for the payment of their arrears of wages.

 

The law requires businesses to take a proactive stance and to ensure that the correct salary is paid. In particular caution is required if the work or projects are offered for very low prices.

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