Can an employee be restricted in performing ancillary activities outside of working hours?
With effect from 1 August 2022, the new article 7:653a of the Dutch Civil Code has entered into force. According to that article, employers can only prohibit employees from ancillary activities outside of working hours for an objective reason. Any such provision in the employment contract is otherwise null and void.
The provision itself doesn't need to contain the justification. In any case, the objective justification must be present when an employer invokes that clause, refuses permission for specific ancillary activities, or imposes conditions on it. Working as a self-employed entrepreneur also falls under ancillary activities.
In the case before the District court Noord-Holland, the employer, the Municipality of Zaanstad, had restricted the employee from performing his ancillary activities outside of working hours.
The facts of the case
The employee worked as an arborist for the Municipality of Zaanstad. In addition to this position, the employee performed additional work as a self-employed arborist for companies and private individuals inside and outside the municipality.
In 2017, the municipality gave the employee written permission to perform these ancillary activities for two years. In 2021, the employee's position with the municipality changed to supervisor. In 2022, the municipality again gave the employee permission for his ancillary work but restricted this to be performed outside of the municipality.
The employee objected to this restriction, claiming that there was no objective justification on which the municipality could restrict his ancillary activities.
The legal framework
The court starts by citing the employee's fundamental right to free choice of employment, laid down in the Dutch Constitution and following from the Charter of Fundamental Rights of the European Union. This constitutional right can only be restricted by law, which is laid down in the Civil Service Act of 2017.
Section 8(1)(a) of the Civil Service Act 2017 provides that the civil servant is not permitted to perform ancillary activities which would not reasonably ensure the proper performance of the function or the proper functioning of the public service insofar as it is related to the performance of his duties. It is also stipulated that restrictions or conditions may be attached to the consent. The provision states that the civil servant has to request permission for ancillary activities, which the employee did.
On 1 August 2022, Article 7:653a of the Dutch Civil Code entered into force. According to that article, a clause that prohibits or restricts the employee from performing work for others outside the work hours is null and void unless that clause can be justified based on an objective reason.
An objective justification
The court reiterates that an objective justification does not always have to be in the employment contract or the ancillary work clause itself but must, in any case, be present when an employer invokes that clause, refuses permission for specific ancillary activities or imposes conditions on it.
The court continues that it is also necessary to assess whether the prohibition of ancillary activities is appropriate, suitable and necessary to protect the employer's interests since this is a restriction on a fundamental right. The interests of the employee must also be taken into account.
Integrity of public services
The municipality justified the restriction on the integrity of public services. It argued that the employee's ancillary activities were incompatible with his position as supervisor for the municipality. As a civil servant, it is crucial to avoid an appearance of conflict of interest in their work. Furthermore, the restriction does not unreasonably harm the employee's interest because he can perform them outside the municipality.
The court agrees with these arguments and states that the municipality has sufficiently justified and demonstrated an objective justification to prohibit the employee from performing his ancillary activities within the municipality of Zaanstad.
Integrity of public services can provide an objective justification as referred to in Article 7:653a(1) of the Dutch Civil Code and the Transparent Working Conditions Directive. The integrity of public services is mentioned explicitly in Article 9(1) of the Transparent Working Conditions Directive as objective reasons for restricting certain ancillary activities. Furthermore, the legislative history of Article 7:653a of the Dutch Civil Code also mentions the integrity of public services as an objective reason for prohibiting ancillary activities.
The court concurs with the municipality's reasoning that the performance of ancillary activities by the employee within the municipality may give the appearance of a conflict of interest, or at least the risk thereof is real. After all, individuals and companies, including other landscaping companies and possible competitors of employees, may get the impression that he can obtain contracts for his own company earlier and more easily because of his work for the Municipality of Zaanstad. It does not matter that the employee does not use his position as such because preventing any appearance of conflict of interest and limiting the risk of conflicts of interest is also essential in safeguarding the integrity of public services.
The court's decision
The prohibition on performing ancillary activities within the municipality of Zaanstad is also appropriate, suitable and necessary to protect the municipality's interest. The employee's interests do not carry sufficient weight because he can continue to carry out and expand his ancillary activities outside the municipality.
Can an employee be restricted in performing ancillary activities outside of working hours? In this case, the ancillary work clause and posed restrictions to the employee were valid.