Temporary Agency Employee Seeks Redress for Agency’s Outstanding Wages

A temporary agency employee tried to hold the hirer liable for payment of the outstanding remuneration the temporary employment agency had failed to pay, but only a small part of the claim was granted.
In three different periods between 2014 and 2018, a hotel and congress location used the services of a temporary agency employee through three different temporary employment agencies. The agency with the employment contract for the first period (July 17, 2014 to July 28, 2015) had underpaid the employee. That was the reason why the Sub-district Court in Leeuwarden had ordered the temporary employment agency to pay various amounts of outstanding wages. Including the statutory increase due to late payment, the statutory interest, the extrajudicial collection costs and the legal costs, it amounted to over €10,000.
The temporary agency employee did not succeed, however, in recovering the wages from the temporary employment agency, since the latter had ceased its business activities.
For that reason, the temporary agency worker sought redress from the hotel/congress location as the hirer. He did so on four different grounds.
First, the temporary agency employee argued that there had been a wrongful act on the part of the hirer, because the hirer had allegedly provoked or facilitated the underpayment. The temporary agency employee stated that the hirer could have foreseen that the all-in rate would not be sufficient for both the payment of wages in accordance with the catering CLA and for the profit for the temporary employment agency.
The Sub-district Court rejected this claim, however, referring to a judgment of the Court of Appeal of Arnhem-Leeuwarden in another case, in which the Court had ruled that, if there is a larger difference between the hourly wage and the compensation paid, the conclusion cannot be that the hirer unlawfully benefited from the temporary employment agency's default, because there was no reason for the hirer to assume or suspect any underpayment. According to the Court, the hirer is not required to calculate it "to the decimal point".
Second, the temporary agency employee stated that the requirements of good employment practices have a consequential effect, meaning that they also apply to the hirer. The employee referred to a judgment of the Court of Appeal of Leeuwarden from 2006, but it did not convince the Sub-district Court because the Court of Appeal had also considered that this reflex effect does not go so far as forcing the hirer to consider the interests of the temporary agency employee when entering into an agreement with the employment agency, since in temporary employment the flexibility for the hirer is an essential characteristic that allows the hirer to be prepared to pay the temporary employment agency a higher compensation than the wage he would have to pay if he had employed the employee himself.
Third, the temporary agency employee stated that the hirer had unjustifiably been enriched whereas he has been unjustifiably impoverished. The Sub-district Court, however, was of the opinion that the hirer had not unjustly been enriched because it paid the temporary employment agency a compensation which was higher than the CLA wage.
For the fourth and final ground: the temporary agency employee relied on the client's legal liability for payment of the wages that the temporary employment agency failed to pay.
On this ground, the temporary agency employee's claim was granted, but only insofar as it concerned the wages as of 1 July 2015, since the hirer's legal liability had not been included in the law until that date.
Since only a small part of the temporary agency employee's entire claim was granted, whereas the hirer had undisputedly declared that it had repeatedly offered to pay this part of the claim, the temporary agency employee was sentenced to pay the legal costs. The claim for payment of the statutory interest was also rejected, since the employer had offered to pay this part.

Under the Sham Employment Arrangements Act, the client is liable for payment of the wages that a contractor/employer wrongfully failed to pay to the employee, e.g. if the contractor/employer is bankrupt or if an irrevocable Court decision has sentenced the contractor/employer to pay that wage, and if foreclosure of this ruling is not possible.
This liability did not apply, however, until this new Act entered into force on July 1, 2015 and, therefore, it could offer the temporary agency employee in the above case only very limited relief.
Has the claim been successful on one of the other grounds, the temporary agency employee would have taken redress to the hirer over the full period and, in addition, would also have been able to not only recover the wages, but the costs incurred by him as well.