Ancillary activities: allowed/not allowed

Ancillary activities: activities the employee carries out in addition to his job. Current practise is that these acitivities are often prohibited, but a new bill may provide for relaxation for the employee. What will change? Ronald Beltzer is happy to explain it to you.

About two and a half years ago, Directive 2019/1152 on transparent and predictable working conditions in the EU was published. It took some time, but on November 11, 2021, the bill to implement this directive in the Netherlands was submitted. The bill, which should become statutory law on August 1, 2022, entails some legislative changes and introduces a number of new provisions. An important amendment to the law concerns ancillary activities. These may, of course, not be competitive in relation to the employer’s activitities. If they are, a clause that prohibits ancillary activities is not even necessary because it is contrary to “good employeeship” to compete with one's own employer. There are, of course, many doubtful cases or other reasons for not allowing ancillary activities just like that.

In Dutch legal practice, it is quite common for an employment contract or a personnel scheme to contain a prohibition or restriction on ancillary activities. Collective agreements sometimes also contain such a provision. An example of this (for education) is given below:

1. The employee will notify the employer before accepting a position at other educational institutions or any other work for which the employee receives salary or other income.

2. The employee will also notify the employer of any change in the nature and scope of the of such activities.

3. If, in the employer's reasonable opinion, the activities referred to in the first paragraph conflict with the interests of the institution, they are not permitted.

4. Ancillary activities for which the employee does not receive a salary or other income, may no longer be performed by the employee, if these activities are in conflict with the interests of the employer.

If the provision is violated, the employee may receive a fine. A ban on ancillary activities is often based on the wish to keep control over the employee. For example, there are the risks that the employee will drop out due to a working week that is too long or, in case the employee would become (partially) incapacitated for work, recovery could be hindered if he has an extra job. In practice, therefore, a ban on ancillary activities applies to everything the employee does outside of working hours. Sometimes a total ban applies unless the employer has stated (in writing) that he does not object. An ancillary activities clause (to be distinguished from a non-competition clause, which concerns the activities after employment, so there is nothing 'additional' to it) is not regulated by law, except that the clause does not qualify for the general binding declaration of a collective labour agreement.

The proposed article (art. 7:653a of the Dutch Civil Code), which will necome part of our legislation from this year, will fill that void:

Art. 7:653a BW

1. A stipulation whereby the employer prohibits or restricts the employee from performing work for others outside the times when the work must be performed at that employer is null and void, unless this stipulation can be justified on the basis of an objective reason.

2. The employer may not disadvantage the employee because of the circumstance
that the employee exercises the rights granted to him in this article in or out
of court, has provided assistance in this regard or has submitted a complaint
about this.

This article only applies to ancillary activities performed outside one's own working hours. The crux lies in the last words of the first paragraph (“unless…”), the justification on the basis of an objective reason. The bill does not say much about this, other than that it is in line with what is stated in the directive: health and safety, the protection of the confidentiality of business information, the integrity of government services or the avoidance of conflicts of interest. These are clear examples of situations where ancillary activities are not desired.

What is now no longer possible and what is (now) possible? Despite the fact that some (in other blogs) have mentioned that it will all be different, reality is not that gloomy. An employer will have to be able to point at an objective reason, but that reason does not have to be in the clause itself: it can still be given as soon as there is discussion about it. This ensures that existing ancillary activities clauses will remain largely unchanged, although the employer will have to (re)consider the wording of the clause. Of course, a total ban is no longer possible (and probaby never was). A restriction based solely on the fear that the employee might end up in the employer's waters (without this demonstrably being the case), or because one simply wants exclusivity, is no longer allowed. The practice of having to obtain prior permission from the employer for ancillary activities is not under pressure as a result of the bill. However, in the event of a refusal by the employer, the employer must be able to demonstrate an objective reason. This bill does not therefore have to lead to a massive adjustment of ancillary activities clauses.

Questions about this topic? Please do not hesitate to contact Ronald Beltzer!