The dis­trict court in Assen ruled on 11 July 2023 (ECLI:NL:RBNNE:2023:2863), that the con­tract of a pack­age deliver­er who owned 10% of the shares in the com­pany he worked for was not a con­tract for ser­vices, but qual­i­fied as an employ­ment con­tract.

 

What happened?
On 1 June 2016, the employ­ee entered into a fixed-term employ­ment con­tract for 1 year with a trans­port com­pany in the role of driver. It was not form­ally noti­fied that this fixed-term employ­ment con­tract would not be exten­ded. Since the begin­ning of 2017, the work­er has owned 10% of the shares in the hold­ing (sole share­hold­er of) the trans­port com­pany. How­ever, the under­ly­ing share­hold­ers’ agree­ment was not signed. Sub­sequently, until 1 June 2018, the work­er received monthly pay­ments under vary­ing descrip­tions to his bank account: salary, expense allow­ance, advance (profit) dis­tri­bu­tion, admin­is­trat­ive com­pens­a­tion and dividend. In June 2018, at the workers’s request, the share­hold­ers’ agree­ment was ter­min­ated. Accord­ing to the trans­port com­pany, the leg­al rela­tion­ship also ter­min­ated at that time, as he had become an entre­pren­eur (inde­pend­ent con­tract­or) since the begin­ning of 2017. How­ever, the work­er con­tends that his employ­ment rela­tion­ship still exists.

 

Core of the dis­pute
The dis­pute between the parties is wheth­er the work­er has been work­ing as an inde­pend­ent con­tract­or since the begin­ning of June 2017 (upon acquir­ing the shares) or wheth­er his pre­vi­ous employ­ment con­tract was (impli­citly) con­tin­ued.

 

Judg­ment of the dis­trict court
The dis­trict court assessed accord­ing to the cri­ter­ia of the Deliv­eroo judg­ment of the Supreme Court (ECLI:NL:HR:2023:443) and ruled based on that, all cri­ter­ia were met. Hence, there was an employ­ment con­tract. The reas­on­ing of the Dis­trict Court is as fol­lows.

 

Was the “labor” cri­terion met?
Yes, because the work remained the same after acquir­ing the shares, namely: driv­ing and trans­port­a­tion work primar­ily for DHL. DHL arranged the trips itself. The work­er had little to no influ­ence on the nature and extent of these trips. It also seems that the work­er could not (per­man­ently) be replaced by someone else. There­fore, the work had to be per­son­ally per­formed by the work­er. The abil­ity to refuse trips also appears lim­ited, espe­cially since the worker’s income depended on these trips. Some trips for PostNL, how­ever, were arranged by the trans­port com­pany, but this was lim­ited in num­ber.

 

Was the “wage” cri­terion met?
Yes. It is estab­lished that the trans­port com­pany paid the work­er for his work. Pay­ments were not made on an invoice basis and VAT was not charged. The work­er was also not registered as a inde­pend­ent con­tract­or in the Trade Register of the Cham­ber of Com­merce. The trans­port com­pany determ­ined the amount of the pay­ments, in mutu­al con­sulta­tion with the share­hold­ers. It has not been shown that the work­er had influ­ence over the amount of com­pens­a­tion.

The amount of the wage was only affected by vaca­tion days if the work­er took them, as he would not be entitled to wages then. How­ever, the share­hold­ers’ agree­ment stated that the work­er was entitled to 14 days of paid vaca­tion.

 

Was the “in ser­vice of” (author­ity) cri­terion met?
Accord­ing to the dis­trict court, the cri­terion was met. The work­er worked as a driver and pack­age deliver­er. He also per­formed this work dur­ing his ini­tial fixed-term employ­ment con­tract. Hence, the nature of the work had not changed after receiv­ing the shares. Few instruc­tions from the trans­port com­pany are needed to per­form the work as a driver, which says rel­at­ively little about the exist­ence or absence of an employ­ment rela­tion­ship. In prac­tice, the work­er worked full-time primar­ily for DHL and could sched­ule the DHL trips him­self in con­sulta­tion with DHL. The trans­port­a­tion and driv­ing work per­formed fit with­in the organ­iz­a­tion and com­pany struc­ture of the trans­port com­pany. Hence, the work was embed­ded in the organ­iz­a­tion, which is an ele­ment indic­at­ing the pres­ence of an employ­ment con­tract. Addi­tion­ally, the truck with which the work­er per­formed his work was provided by the trans­port com­pany and thus did not form part of the worker’s busi­ness assets.

 

Was there “entre­pren­eur­ship”?
Lastly, the dis­trict court ruled that there was no real entre­pren­eur­ship by the work­er as a co-share­hold­er. Being a co-share­hold­er only does not make an employ­ee an entrepreneur/independent con­tract­or. The lack of entre­pren­eur­ship can indic­ate an employ­ment con­tract. Fur­ther­more, an employ­ment con­tract and co-share­hold­ing can coex­ist per­fectly well. The work­er primar­ily drove for one cli­ent, DHL, which was essen­tially a cli­ent of the trans­port com­pany. The fact that the work­er received his trips dir­ectly from DHL does not change this. The work­er took no entre­pren­eur­i­al risk. He received a fixed amount per month. His work was embed­ded in the organ­iz­a­tion, he was provided a truck by the trans­port com­pany, and his reg­u­lar duties fit with­in the organ­iz­a­tion and com­pany struc­ture of the trans­port com­pany. The fact that he had to keep costs low and there­fore did as much main­ten­ance on the truck him­self does not make him an inde­pend­ent con­tract­or; this can also be expec­ted of an employ­ee. Hence, the dis­trict court con­cluded that the work­er had an employ­ment con­tract with the trans­port com­pany even after acquir­ing the shares.

 

Con­clu­sion

This rul­ing clearly shows that only hav­ing shares does not neces­sar­ily entail entre­pren­eur­ship. This as a jus­ti­fic­a­tion for trans­form­ing an employ­ment con­tract into a con­tract for ser­vices. To determ­ine wheth­er there is an employ­ment rela­tion­ship or an inde­pend­ent con­tract­or rela­tion­ship, all cir­cum­stances of the case are weighed. Not one of the ele­ments is defin­it­ively more sig­ni­fic­ant. If the parties intend to trans­form an employ­ment rela­tion­ship into an inde­pend­ent con­tract­or rela­tion­ship, this should be con­trac­tu­ally estab­lished and ensure that the agree­ments (both in writ­ing and in prac­tice) align with the require­ments for a con­tract for ser­vices. Spe­cific­ally, in the afore­men­tioned case, the agree­ments and the trans­ition from an employ­ment rela­tion­ship to inde­pend­ent con­tract­or were inad­equately doc­u­mented. Moreover, it appeared from the cir­cum­stances that the employ­ee was not suf­fi­ciently aware of his new role as an entre­pren­eur. This case also involved shares held privately. The court, there­fore, did not rule on com­mon situ­ations where shares are held in a private hold­ing, and the employ­ee has entered into ser­vice with his own hold­ing while con­tinu­ing to work for his old employ­er.

 

All in all, sig­ni­fic­ant dif­fer­ences can still exist, and it is import­ant to care­fully weigh the interests and cir­cum­stances. We are happy to think along with you!

 

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