Hoge Raad rules entrepreneurship critical in determining employment status
The Hoge Raad, the Dutch Supreme Court, issued a significant ruling Friday on the Uber case that could reportedly reshape how gig economy workers are classified in the Netherlands. The case revolves around whether Uber drivers should be classified as employees, entitled to benefits and protections, or independent contractors. The FNV labor union argues that Uber drivers are employees and should be covered by the Dutch Taxi Collective Labor Agreement (CAO), while Uber and several drivers participating in the case maintain that the drivers are independent contractors.
In its ruling, the Hoge Raad emphasized that determining whether an agreement constitutes an employment contract depends on the specific circumstances of each case. In the 2023 Deliveroo decision, the Hoge Raad identified nine factors to assess when classifying a work relationship. One of those factors is whether the worker behaves like an entrepreneur in the economic market.
The court clarified that entrepreneurship refers to the worker’s broader business activities, which may include factors beyond the specific working relationship with the client. This includes external entrepreneurial activities such as client acquisition, investment, and working with multiple clients.
The Court of Appeal in Amsterdam had referred several key questions to the Hoge Raad, seeking clarification on the role of entrepreneurship in classifying workers. The court asked whether entrepreneurship should be a decisive factor and whether the same work, performed for the same client, could be classified differently depending on whether the worker exhibits entrepreneurial behavior.
The Hoge Raad addressed these questions, confirming that entrepreneurship is an important factor in classification. The court stated that entrepreneurship is not secondary to the other factors and could indeed be decisive in classifying a work relationship. In some instances, a worker who demonstrates entrepreneurial behavior may not be considered an employee, even if the same work for the same client could be classified as an employment contract for a worker who does not display such behavior.
Additionally, the Hoge Raad noted that the Dutch government is currently drafting new legislation to address issues surrounding the classification of workers in the gig economy. Because of this, the court refrained from establishing a ranking system for the nine factors, as it did in the 2023 Deliveroo case. However, a draft bill being considered by the government does propose a ranking system. Under this proposal, external entrepreneurship would only be evaluated if the terms of the working relationship do not clearly indicate whether the worker is independent or an employee.
