Real-life examples

In March 2023, the Supreme Court rendered judgment in the case between Deliveroo and FNV. The case revolved around the question of whether Deliveroo’s delivery drivers who worked on the basis of an independent contractor agreement were ‘real’ self-employed workers. Or that they had a disguised employment contract and were employees with an employment contract. The Supreme Court ruled that the delivery drivers were in practice employees and had an employment contract, even though an independent contractor agreement had been concluded.

The Deliveroo ruling has far-reaching consequences. The requalification of the delivery drivers as employees means that they will be given more legal rights with retroactive effect (e.g. wages in the event of illness, holiday pay and holidays, transition payment, pension, collective labor agreement rights). It also has enormous consequences from a tax and social security point of view (no VAT but payroll tax, contribution obligations, entitlement to benefits).

The Deliveroo case is in line with a 2021 case between Uber and FNV, where Uber taxi drivers were also classified as employees instead of self-employed workers. Outside the domain of self-employed persons, other examples in which the qualification of agreements was central:

• In 2020, judges in Amsterdam ruled that rental platform Airbnb provided an ‘intermediary service’ and was therefore not allowed to charge costs to both the hosts and tenants of holiday homes (two-way commission). The Supreme Court ruled that although there was an intermediary agreement, Airbnb was still allowed to charge costs on both sides, because the two-sided brokerage ban would not be intended for short-term rental of holiday homes.
• In 2014, the Supreme Court ruled that a telephone subscription with a ‘free device’ is an agreement for purchase on instalments / consumer credit. The telephone companies did not comply with the legal requirements and the agreements could therefore be (partially) annulled.

Qualification of agreements

Dutch law distinguishes between ‘named agreements’ and ‘unnamed agreements’. Named agreements are agreements for which the law contains specific regulations. A well-known example is the employment contract. Unnamed agreements are agreements for which the law does not have specific regulations. These agreements are governed by the general rules for contracts and by the agreements made by the parties. Well-known examples of unnamed agreements are licensing contracts and distribution agreements.

Qualifying contracts is about named agreements. If an agreement meets the legal criteria of a named agreement, the specific legal regulation applies. If the specific legal regulations have not been taken into account when the agreements were drawn up, there is a high risk of unintended and far-reaching consequences. Below is a (non-exhaustive) overview of named agreements where the qualification sometimes leads to problems, with some points of attention:

• Employment contract: Characterized by personal labor for pay under direction and supervision. Many mandatory provisions that may not be deviated from. Self-employed contracts are regularly requalified as employment contracts.
• Purchase agreement: is characterized by the delivery of a good for payment. Also applies to less obvious things such as shares and (domestic) animals. Dutch law contains various provisions that are buyer-friendly. In the case of B2B contracts, it is possible to deviate from the law (and the Vienna Sales Convention in international agreements).
• Rental agreement: is characterized by the use of property for a fee. The use of commercially rented space determines the rental regime. In the case of a business rental agreement, a different rental regime applies if the space does or does not qualify as (publicly accessible) ‘business space’.
• Assignment agreement: is characterized by the provision of services outside a relationship of authority. According to the law, an assignment may always be terminated by the client, and often not by the professional contractor. This may be deviated from. There is a risk that an assignment qualifies as an employment contract in practice.
• Building contract: is characterized by the realization of work of a material nature outside a relationship of authority and in return for payment (e.g. building a house or making a piece of clothing). The law contains various rules on target prices and price increases. In practice, building contracts are sometimes confused with (general) assignment agreements.
• Agency agreement: is characterized by a party that mediates on a commission basis in the closing of agreements for another (the principal). Agency is often confused with distribution (the distributor buys and resells products on his own account and risk, the agent is a representative who does not sell for his own account and risk). In some situations, agents can claim a so-called customer compensation or goodwill compensation at the end of the agency relationship.

Moral of the story; When drawing up an agreement, check whether a specific legal regulation applies, and take this into account in the execution of the agreement.

For questions or advice on this subject, please contact Sander Pieroelie (+31-6-222 878 65) or Sabine Chan (+31-6-578 911 13).

This article was published in the Newsletter Vestius of April 2024