Many employment contracts include an “ancillary employment clause”. In such a clause, the employee is (in short) prohibited from performing work outside the employment contract. The bill implementing the European Transparent and Predictable Employment Conditions Directive (Directive 2019/1152) proposes the introduction of article 7:653 a of the Dutch Civil Code. This proposal, which is expected to enter into force on August 1, 2022, includes important restrictions on the ancillary activities clause. This blog explains these restrictions in more detail.
At the moment, the ancillary activities clause is not regulated by law. The bill proposes the introduction of article 7:653 a of the Dutch Civil Code. The future article 7:653 a of the Dutch Civil Code reads as follows:
”A clause where the employer prohibits or restricts the employee from working for others outside the times at which the work must be performed at that employer is null and void unless this clause can be justified on an objective reason.”
Due to the change in the law, a ban on ancillary activities will no longer be legally negotiable as a main rule. After all, exceptions are then only possible and for objective reasons. Objective reasons then mean: reasons on the basis of which it is clear to everyone that, in a given situation, it is justified to restrict the employee from his ancillary activities. In doing so, it is not necessary that the justification is included in the clause itself.
In line with the EU directive, the bill did not include an exhaustive list of the objective justification grounds. The EU directive itself does include examples of objective justification, such as employee health and safety, protecting the confidentiality of business information, the integrity of public services, avoiding conflicts of interest or breaching legal requirements.
The introduction of article 7:653 a of the Dutch Civil Code has made it less easy for employers to prohibit ancillary activities. The employer can still include an ancillary employment clause in the employee's employment contract, but can only invoke it if he has an objective justification for doing so. In addition, it is not necessary that the justification is also included in the clause itself (and therefore in the employment contract). Indeed, the employer only has to prove the justification when he invokes the ancillary employment clause. Existing clauses, included in employment contracts that were entered into before 1 August 2022, can therefore remain in place when the bill comes into force. However, when invoking the ancillary employment clause, the employer must therefore have an objective reason.
In short, if the employment contract states that working for another employer is completely prohibited and no objective reason exists or can be demonstrated, the ancillary employment clause is null and void.
Martin Bax
lawyer
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