Insurance Obligation for Parent and Child Employment Contract?

Year of publication

2016


Edition number

264


Reference

Central Court of Appeal, November 11th, 2015, www.rechtspraak.nl , ECLI:NL:CRvB:2015:4328


Decision

In the case of an employment relationship between a parent and child, the existence of an em-ployment contract, and therefore of an insurance obligation for the employee insurance scheme, is no longer an exception to the rule.

It is clear from a letter of November 30th, 2011, that a florist had appointed his son as a man-ager/florist per January 1st, 2012. In the letter the tasks of the son were described and a net salary of € 2,000 was agreed. When, on November 19th, 2012, the son applies for an unem-ployment benefit, the UWV refuses to grant this benefit, arguing that the son was not insured for unemployment benefits since, in the absence of a clear supervisory relationship, he could not be considered as an employee. When an attempt to object to the UWV decision fails, the next step is an appeal to the Court of Appeal. The Court declares the appeal unfounded, refer-ring to case law of the Central Appeals Tribunal, according to which, as a general rule, private law employment between a father and a son is not plausible since the required supervisory relationship will be lacking. An exception to this rule is possible, but the Court sees no justifi-cation for it.

When the son appeals the decision of the Court of Appeal, the Central Appeals Tribunal shows a different opinion. The Central Appeals Tribunal indicates that it reconsiders its pre-vious case law. Just like before, according to the Tribunal, all circumstances of the case in their mutual context should be weighed and not only the intention of the parties, when enter-ing into the contract, should be noted, but also the way the agreement was realized. Different from before, the Tribunal now believes that one can not assume that, as a general rule, a par-ent-child supervisory relationship is lacking. The existence of a supervisory relationship needs to be assessed by reference to all relevant circumstances of the case, based on the question whether one party is subject to the authority of the other party and whether the other party is authorized to give orders and instructions and to carry out checks on the progress and results of the work.

The son involved, however, does not benefit from this change in the case law of the Central Appeals Tribunal. Based on the following circumstances, the Central Appeals Tribunal still decides that a supervisory relationship is not the case here:

• It has not been covered how many hours the son will work.

• There are no arrangements for holidays and holiday allowance.

• There is no overtime working regulation.

• The notice period has not been agreed.

• There are no provisions regarding sick pay, reporting ill or guidance by the Health and Safety service.

• No payslips have been issued and no annual statement has been provided.

• Payments are not described as wages and the bank statements don’t describe the payer as being the employer.

• No employee insurance premiums have been paid.

• In his own words, the son worked sixty hours a week spread over six days and did not have any holiday.

• Different from the task described in the contract, it was the father who purchased the flowers.

Since the son also failed to bring in any evidence of authority, the Central Appeal Tribunal decided that there was no supervisory relationship.


Comments

Earlier, the Central Appeals Tribunal had already demonstrated its change of strategy in a ruling dated October 14th, 2015 (ECLI:NL:CRvB:2015:3634). But then it was about the spe-cific situation of a son who, on the basis of a personal budget as referred to in the Social Sup-port Act, and against payment, took care of his disabled mother. When the son became ill, the Social Insurance Bank had paid the wages for 104 weeks, after which the son had applied for a WIA-benefit (work and income according to work capacity). Then this application was also rejected by the UWV. But in that case the Central Appeals Tribunal assumed a supervisory relationship. For as far as the impression may have been created that the relevant statement would be related to the specific situation of working on the basis of a personal budget, the current ruling makes it clear that the amended case law of the Central Appeals Tribunal has a far broader scope.



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