The stepchild of labour law
The stepchild of labour law
The complex relationship between independent labour and social insurance
Inaugural lecture
delivered upon appointment to the chair of Professor of Social Insurance Law at the University of
Amsterdam on 2 December 2011
by
Mies Westerveld
This is inaugural lecture 423, published in this series by the University of Amsterdam.
Lay-out: JAPES, Amsterdam
© University of Amsterdam, 2011
All rights reserved. No part of this publication may be reproduced, stored in an automated data file, or
made public, in any form or by any means (electronic, mechanical, photocopying, recording or
otherwise), without the prior written permission of the publisher.
Inasmuch as the production of copies of this publication is permitted under Article 16B of the Copyright
Act 1912 in conjunction with the Decision of 20 June 1974, St.b. 351, as amended by the Decree of 23
August 1985, St.b. 471 and Article 17 of the Copyright Act 1912, the legally required payments must be
made to Stichting Reprorecht (PO Box 882, 1180 AW Amstelveen, The Netherlands). Any requests
regarding the inclusion of any part or parts of this publication in anthologies, readers and other
compilations (Article 16 of the Copyright Act 1912) should be directed to the publisher.
Madam Rector,
Honoured guests,
Carla Cantenaar was 35 years old and working in the healthcare sector when she developed cancer.
After three years and many rounds of chemotherapy, she was pronounced cured. Nevertheless, the
damage caused by the disease and aggressive medication had left her with only a limited capacity to
work. She had no hope of returning to her previous work. Under the Disability Insurance Act (WAO), the
law that was in force at the time that this story took place, she was still considered an 80-100 case, to
use the applicable jargon. Carla decided not to give up and instead to apply all her strength to find out
what was still possible for her. She soon learned that few employers are eager to hire an employee with
a history of illness and real constraints of the kind she had. She talked with her employment
specialist about the possibility of starting a small business, in which she would coach people like herself
as they try to return to a normal life. The employment specialist was amenable to the idea. Carla was
able to start within the framework of the Disability Insurance Act, with the requirement to report back
in a year about how she had fared. Carla applied all of her energy to her company. One year later, she
was able to announce with pride that she had actually realised a profit. Her joy was short-lived,
however, when she heard that she would have to repay almost twice as much as she had earned to the
Employee Insurance Agency (UWV). To ease the pain, she was informed that it was possible to work
out payment arrangements, of course.
Bertus Vuijk was 48 years old. He was drawing unemployment benefits (WW) after having been
declared redundant. Even though he had not read the report by the Bakker Commission, Bertus knew
that his chances of returning to permanent employment were low.1 He approached the Employee
Insurance Agency to ask whether he could start his own company while receiving unemployment
benefits. He already had a name: “Bertus Consultancy, for all your business transitions”. Bertus had
worked for years in a large company. From his experience, he knew that employers often use private
consultants to supply expertise that their own employees do not possess. Bertus received a green light
as well, and he was able to keep his benefits temporarily, even though he did not face any physical
restrictions (as had been the case with Carla). He was required to report the number of hours he
worked each month. In his case, the balance was calculated and settled each month, in order to
prevent the debt from building up. After one year Bertus, too, received the fright of his life: the
Employee Insurance Agency (UWV) had compared his timesheets to the hours that he had reported to
the tax authorities in order to claim the self-employment deduction and found that they did not match
up. Although Bertus was aware of this, he had assumed that this would not be a problem, as the
reports involved two different aspects of running a business. The UWV took a harder approach with
Bertus. Because he had submitted false information, he would be required to repay the excess benefits
he had received, in addition to facing a hefty fine and perhaps even criminal prosecution.
The nice thing about this chair, ladies and gentlemen, is that hardly any imagination is required to come
up with interesting examples. The practice is always more colourful than you could possibly imagine
behind your desk. I have selected these two cases as an opening for this public lecture about the
relationship between my field, social insurance, and self-employment. This relationship has always
been complicated, and it is complicated still. I would like to illustrate this with some examples from
recent history, as well as from the here and now. These cases will show that social insurance has never
really known what to do with the phenomenon of self-employment. I also hope that these cases will
make clear that is time for this topic to be put back on the agenda.
The rise of the freelancers
Long ago, when the first social insurance was being designed, there was already a category of “nonworkers”: people who are quite similar to employees in terms of economic position but who are not
employees, as they do not work for an employer. At that time, this category referred primarily to
farmers, gardeners and small shopkeepers. Just like employees, they often worked long hours without
earning enough money to set aside a reserve for later. In the wake of the discussion on the Disability Act
(IW), this raised the issue whether some type of social insurance should be arranged for this group. This
took the form of the Old Age Pension Act, which came into force parallel to the Disability Act. In
contrast to the IW, the Old Age Pension Act was not a form of social insurance; the law provided access
to affordable old-age facilities on a voluntary basis. Very little use was ever made of this possibility.
Bosschenbroek and van den Berg attribute this to the fact that, because the government had already
extended free pensions twice in the past, those to whom the Act applied reasoned that this would also
be the case when their time came.2 This assumption resembles the grasshopper analogy recently
drawn by VARA Ombudsman Pieter Hilhorst. “Freelancers, including myself, are grasshoppers. They
prefer not to think about the winter. They often have scanty retirement funds and, in many cases, they
have made no provisions for the event that they should become unable to work due to illness. Or
perhaps they do think about the winter, but are unable to prepare themselves for it”.3 With this allusion
to the fable by De la Fontaine, we return to the present.
In recent decades, the phenomenon of small independent businesses has soared, not only in our
country, but in many Western welfare states. In 2007, Buschhoff and Schmidt identified the rebirth of
entrepreneurship as one of the most significant developments in contemporary European labour
markets. In this context, they referred to the rise of what they call the “new self-employed”.4 The
designation “new” should be considered relative, though. The term freelancer is derived from the “free
lances” of the Middle Ages – entrepreneurs who, before the term was coined, hired themselves out,
complete with horse and lance, to the lord who made the highest offer.5 The rise of the “new” small
businesses raises questions to which the existing employment arrangements do not always have a
good answer. The classic 1999 report by Supiot and colleagues refers to an expanding “grey area” of
workers who are neither clearly employed nor clearly independent.6 This category lacks the certainty
and stability of work that employees enjoy in exchange for their subordination to employing
organisations and their rules. Self-employed people make a trade-off in which they forego security in
favour of the opportunity to make profits supported by fiscal facilities.7 For those falling into the
category described by van der Heijden – “economically comparable with employees but with no legal
status” – neither condition applies.8 These workers fall through the cracks with regard to both
protective labour laws and opportunity-creating business laws. On the other hand, self-employed
people are not always victims of a business world that exchanges permanent staff for less-expensive
non-employees. The category of freelancers also includes well-qualified workers who prefer the
freedom of entrepreneurship to the subordination required by labour laws and the weak risks
associated with the solidarity generated by social insurance. Supiot and colleagues establish that the
labour supplied by freelancers has increased the quality of work in some situations, while lowering it in
others. A quality-enhancing effect occurs when the deployment of self-employed people allows more
space for the abilities of truly autonomous workers (most of whom are highly qualified), thus leading
to innovation in the employing organisation. The opposite occurs when self-employment is used to
divest workers at the bottom of the labour market of the protections that are provided by labour law.9
The report by Supiot and colleagues dates from the late 20th century. Ten years later, Houweling
establishes that labour law still does both too much and too little for the self-employed and that this
situation emphasises the need for a fundamental debate about the positioning of freelancers and the
future of labour law.10
Self-employment in the Netherlands: definition and figures
The advent of the “new” independent enterprise has also raised difficult questions with regard to
social insurance. Before I address this issue, allow me to frame the discussion with a few figures. In
2006, self-employed people accounted for approximately 15% of the total workforce in the 25 EU
Member States. Freelancers comprised two-thirds of this group (approximately 20 million). Although
most were active in the agricultural and retail sectors, sub-contracting and contracting out brought
increasing numbers of freelancers into the construction and personal services sectors. These numbers
were obtained from the 2006 Green Paper on Labour Law.11 I shall refer to this European Commission
document again later in my address.
To some extent, we can only speculate as to how the Commission arrived at its assessment. As
observed by Aerts, freelancers do not lend themselves well to description, and they are difficult to trace
as a group. The concept does not exist in any legal sense, and its meaning is ambiguous even outside
the legal context. In an attempt to parse the notion, Houweling identifies the “classic” and “new” selfemployed, further distinguishing between “hybrid”, “true” and “involuntary” self-employed people.12
This sub-categorisation is problematic, as the concepts are neither mutually exclusive nor static.
The lack of clarity surrounding the designation of self-employment can explain why the 2007 estimates
concerning the number of freelancers in the Netherlands ranged from 150 to more than 500
thousand.13 Following a 2010 recommendation of the Social and Economic Council of the Netherlands
(SER), an unambiguous definition is now being applied. Based on this definition, the number of
freelancers exceeded 675 thousand in 2007, and it had increased to approximately 750 thousand by
the end of 2010.14 The table below shows the scope of this share of the Dutch labour market.
The Dutch labour market in figures (2010)
Self-employment as a component of the workforce
Total
Employees in large companies
2,000,000
Employees in the public and semi-public sectors
1,000,000
Employees in the SME sector
4,000,000
Business owners in the SME sector
480,000
Freelancers
750,000
Welfare recipients
1,200,000
In recent years, there has been an unmistakable increase in the share of freelancers. In the period
1996-2011, this share increased from 11.7% to 12.9%. These figures indicate that our country has
experienced one of the greatest relative increases in the share of freelancers in Europe in recent
years.15
The SER bases its definition on the criteria that the tax authorities apply when issuing a Declaration of
Employment Status (VAR), which will be discussed later. The SER describes a freelancer as an “a person
who is considered an entrepreneur for tax purposes without personnel”. Aside from the fact that this
definition says very little of substance – even worse, it tends towards circular argumentation – it is so
restricted as to exclude freelancers that are registered as limited partnerships. One of the major
advocates for self-employed workers, the platform for independent entrepreneurs PZO (Platform
Zelfstandig Ondernemers) estimates the share of such “directors/major shareholders” to comprise 10%
of its membership, amounting to about 2000 self-employed people.16 Van Westing, the spokesperson
for the PZO, adds to this the question what is the relevance of the criterion “without personnel”. Is a
self-employed person who experiences modest growth and who hires a single employee no longer
eligible for protection? This question further illustrates the complexity of the criterion for freelancers
within the context of social protection law.
Self-employment and income
Another factor that is at least as important as the proportion of freelancers involves the income that
self-employed workers realise from their freelance activities. These figures do not paint a rosy picture.
More than 40% earn no more than € 10,000 per year, while about 30% earn an average income (or
slightly more). Profits amounting to twice the average income are reserved for the top 10%.17 It is
important to note that these somewhat depressing figures do not reflect the fact that many
entrepreneurs have several irons in the fire in addition to their own companies. Approximately 45%
combine their entrepreneurial activities with paid employment or a pension. These types of
entrepreneurs are known as “hybrids” – partial employees or retirees who are partial freelancers.
The effects of the economic crisis have been particularly harsh for freelancers. Many have had to close
or temporarily discontinue their businesses, waiting to resume them once the economic tide becomes
more favourable. The figures from 2009 reflect this as well. In 2009, the share of freelancers declined
for the first time since 2001, returning to a gradual increase at the end of 2010.18 Director Teulings of
the Netherlands Bureau for Economic Policy Analysis (CPB) referred to “great hidden suffering” among
freelancers. Their income decreased by an average of 12% in the third quarter of 2009. The loss of
income over all of 2009 amounted to approximately 5%. At the same time, they continued to work the
same number of hours, with the losses largely reflecting a decrease in fees.19 In other words,
freelancers went below the market price in order to avoid going out of business, accepting a temporary
(or not so temporary) loss of income.
These workers should not expect any support from the government in their hidden suffering. They
should not count on such bailout measures as the part-time unemployment insurance that allows
struggling companies to retain their employees in anticipation of better times. On the contrary,
Minister Kamp informed Klaver, a Member of Parliament for GroenLinks, that it is an inherent
characteristic of entrepreneurship that income “breathes along” with the economic climate and that
self-employed people bear primary responsibility for finding solutions to any financial problems
experienced by their businesses.20
Freelancers versus employees
Self-employed people have also penetrated that bastion of organised discussion, the SER. Employers
and employees each relinquished one seat; the employers’ seat was assumed by the PZO, and the
employees’ seat was assumed by the freelancers’ association FNV Zelfstandigen. This did not proceed
in a cordial manner. On the contrary, the advancement of self-employment posed dilemmas for labour
jurisprudence and policymakers as well as for social partners, especially employees’ organisations. The
interests of employees do not always run parallel to those of self-employed people, after all, even if
they are both workers. This became obvious for the first time in the mid-1990s. At that time, the
unions tried to block what they considered unfair competition by including clauses about the pricing of
work performed by freelancers in collective labour agreements. In this way, freelancers lost an
important tool with which to enter as a more attractive source of labour. The Netherlands Competition
Authority (NMA) (and later, the judge) made short work of these determinations. FNV was unable to
provide plausible evidence that these agreements served the interests of employees to such an extent
as to warrant a deviation from the interest of free competition.21 The unions do have a certain amount
of leeway to try to reach agreements regarding situations in which “the deployment of freelancers
could lead to underbidding”, although the extent of this authority is far from clear. I shall set this issue
aside with a brief reference to the SER’s recommendations (Chapter 11) and the Cabinet’s reaction to
these recommendations, which add a degree of nuance to the SER’s standpoint on this component.22
Other collective labour agreements are also being made in which the interests of freelancers were
either exchanged for or subordinated to those of employees. As an example, Linde Gonggrijp, the
spokesperson for FNF-Z (the association for self-employed people), mentions the clause in the
collective labour agreement for the cleaning sector – which has been declared generally binding –
according to which employees are taken over when an object is transferred to another customer.23 For
self-employed people acquiring new projects, either on their own or with a partner spouse, this clause
could mean that they would be forced to take on personnel, thus eliminating the qualification of
“without personnel”. According to Gonggrijp, FNV-Z was taken aback by this regulation, and the union
that had drafted the agreement was apparently unaware of the problems.24 She also considers the
prohibition against re-hiring employees as freelancers within one year of termination as a hindrance
for FNV-Z’s target group, regardless of the relative legitimacy of such conditions from the perspective
of employees. These examples demonstrate the complexity of the relationship between freelancers
and employees. This calls to mind the analogy of a stepdaughter who is made to do all of the work
without receiving any rights in exchange for her efforts.
The social risks of self-employed labour
I shall now return to the social risks of freelancers. The statement that I quoted regarding “breathing
along” with the economic climate illustrates the fact that freelancers run social risks in the operation of
their businesses, in addition to the usual risks assumed by employees. In this regard, van Westing
refers to the risks of entrepreneurs and enterprise. The risk of a recession, as described above, is an
example of an enterprise risk. Other examples include the risk of default (customers paying late or not
at all), solvency risk (expected credit not being extended) and the investment risk (investments yielding
insufficient or no returns). With regard to the first risk, Van Westing notes that governmental
authorities (national and local) especially tend to pay their bills late (or extremely late), thus pushing
small entrepreneurs even closer to the brink. In the US, this risk was one of the driving forces behind
the rise of alternative unions for self-employed people. In our country, the introduction of costcovering notary fees will increase the risk of default for freelancers even further.
Personal risks for entrepreneurs include the risk of poverty in old age (the company not generating
sufficient reserves in order to save for the future), the risk of disability and the risk of death. To a
certain extent, these risks are comparable to the social risks of employees, but this applies only to
some degree, as further consideration makes it clear that the circumstances faced by freelancers are
often more difficult. Lastly, Heeger-Hertter and Koopmans distinguish the transition risk (for
freelancers attempting to go into entrepreneurship after drawing unemployment benefits), the risk of
income shifts, the risk of failure or bankruptcy, and the risk of losing social security rights.25
To address all of these risks in detail would exceed the scope of this lecture. Instead, I would like to
consider two entrepreneurial risks that deserve particular attention: the risks associated with
Declarations of Employment Status and the risk of disability.
Ostensible Self-Employment and the risks associated with Declarations of Employment Status
The risks associated with Declarations of Employment Status affect freelancers operating at the
boundaries between self-employment and employment. This type of worker is known as “ostensibly
self-employed” or a “quasi-employee”. To understand the nature of this risk, we must refer back to the
1990s, when the playing field for social insurance was still reasonably simple. People were either
employed (i.e. working for an employer) or self-employed (i.e. working for multiple customers). In the
first case, the customer was an employer and, in that capacity, obligated to pay employee-insurance
premiums and wage taxes. In the other case, there was no insurance and thus no obligation to pay
premiums, and the worker could claim fiscal facilities for the self-employed. Workers were assigned to
one of these two categories by the tax authorities (for income/wage taxes) and by the Employee
Insurance Agency (UWV) for the employee-insurance premiums.
The expansion of the grey area between entrepreneurship and employment highlighted the need for
rules that would define the relationship between the two more clearly. One such arrangement was the
previously mentioned Declaration of Employment Status (Verklaring Arbeidsrelatie, VAR), which was
introduced in 2001. A Declaration of Employment Status is a prior determination made by the tax
authority concerning the legal status of a person who wishes to offer services as a self-employed
worker. This declaration lets potential customers know that the worker is self-employed and that no
wage taxes or employee-insurance premiums are due. Although this appeared to be a perfect solution,
experience proved otherwise. The legislature failed to state what should occur if the two authorities
were to issue conflicting decisions. For this reason, it was possible for a customer of someone holding
such a declaration to hear from the UWV that employee-insurance premiums were nevertheless due
for the labour that had been purchased. The UWV took such action if its investigation had shown that
the person claiming to be self-employed had worked primarily for a single customer, such that the
customer had “actually” been the person’s employer. In addition to the fact that this was inappropriate
in administrative terms, it was deadly for the self-employed entrepreneur’s market: customers who
experienced such situations were likely to think twice before doing business with someone else holding
such a declaration. The 2004 legislation that extended the legal consequences of the Declaration of
Employment Status brought an end to such legal uncertainty by assigning primacy to the tax
authorities. Once they had issued a Declaration of Employment Status, the UWV was prevented from
imposing its own assessment, and the labour was classified as having taken place outside an
employment relationship.
So, all’s well that ends well? Not exactly. The legal uncertainty that was eliminated concerned only the
customer. The tax authority could rule — up to five years later — that a freelancer’s work history had
nevertheless failed to meet the criteria for self-employment, thus resulting in an obligation to repay
the self-employment deduction. The frequency with which this actually occurs is unknown, as it is
never registered anywhere. The government does not consider this necessary. The Declaration of
Employment Status and the self-employment statement were intended to provide additional certainty
to customers.26 State Secretary Weekers recently informed the Members of Parliament Smeets and
Groot (both of the Dutch Labour Party, PvdA) that the enterprise facilities that could be claimed for
income-tax purposes may be “corrected” if investigation proves that they have been claimed
inappropriately. “The frequency with which this happens to freelancers is not known, as they are
fiscally undefined and usually assumed to go along with entrepreneurship”.27
In his reaction to the SER report ZZP’ers in beeld (“An overview of freelancers”), Minister Kamp notes
that it is up to the freelancers in question to estimate the number of customers they expect to have
and that people holding a Declaration of Employment Status are responsible for reporting any changes
in their situations. The minister acknowledges that, in practice, the Declaration of Employment Status
“is sometimes perceived as definitive”, thus leading to negligence in reporting such changes. Such risks,
however, are the responsibility of the party that appeared to be self-employed but later proved not to
be. The only contribution that these workers can expect from the government in this regard is additional
information.28
ZZP Nederland Spokesperson Marrink feels therefore that the Declaration of Employment Status should
be eliminated. The regulation sends a false signal of legal certainty, which has already duped many
workers who are active in the grey areas.29 This conclusion goes too far for the PZO and the FNV- Z,
although they also acknowledge the tricky character of the regulation.30 For self-employed people who
are active at the boundary between self-employment and employment, the regulation might better be
referred to as the Deception of Employment Status.
Self-employment and disability
One entrepreneurial risk that has been the focus of recent attention is that of long-term disability. The
interest focuses on the private disability insurance (AOV), which is associated with quite a few
problems, according to research by the Financial Markets Authority (AFM). Based on its dossier study,
the AFM concludes that “insurers must still take major steps in order to gain a better focus on the
interests of the customer”. In somewhat less diplomatic terns, Hilhorst states: “The AOV policies are
expensive, and they offer a false sense of security. They are full of fine print and exclusionary clauses.
This amounts to deception for self-employed people who become ill”.31 For the purposes of this lecture,
it is relevant to note that, in the past, social insurance also covered this risk for self-employed people
and that such coverage was discontinued at some point. Why did this occur? And, more importantly,
was it wise? The answer to the first question lies in the parliamentary history, which has been
particularly colourful in this regard.
As you probably know, we have both employee and national insurance. For self-employed people, the
national insurance instrument means that the social risk addressed by the scheme is covered
collectively and according to solidarity of the strong with the weak. This is the case with the AOW (risk
of poverty in old age) and the AWBZ (uninsurable medical risks). For a long time, from 1976 to 1998,
disability was also included in a national insurance scheme under the General Disability Act. At that
time, long-term disability was regarded as a social risk, and not as an individual risk for workers.32 It
was noted of self-employed people in particular that they had covered this risk with private insurance
insufficiently, “although few figures are available on this point”. Moreover, a report by the Council for
Small and Medium Enterprise had shown that the risk of disability was not sufficiently covered by
private insurance.33 The choice for a national insurance scheme instead of, say, an insurance for the
self-employed as advocated by the SER, was motivated by the “red tape and costs” associated with
such separate insurance schemes and the impossibility of achieving a complete system for those who
were already disabled at the time when the scheme would take effect.34
Another arrangement was introduced that occupied the middle ground between the AOW (basic
allowance for residents) and the WAO (calculation of disability payments according to former earning
power). Only married women were excluded from entitlement to benefits, as “the position of married
women in the social security system is arranged in a manner that is quite different from employee
insurance”. This fact was “obviously due to (...) the structure of the first national insurance schemes
from the 1950s”.35 The transitional legislation for the AAW in 1976 was generous, if not limitless. All
residents who had been disabled longer than 52 weeks at the time when the legislation was adopted
were eligible for AAW. Municipalities were subsequently eager to take advantage of the opportunity to
bring their problematic public-assistance cases under this arrangement. It is for this reason that the
AAW became just as much a “success story” as the WAO had been in the 1990s. It was not, however,
the primary reason why the concept of national insurance was ultimately eliminated ten years later. The
AAW stumbled over a combination of the political desire to introduce greater market forces into the
WAO and the fact that the law was based on faulty premises, if not on quicksand.36 I could devote an
entire lecture to this ten-year history of ping-ponging between legislator and judge, but I shall resist this
temptation.37
In 1998, the law was replaced by two categorical arrangements, one of which, the WAZ, is relevant to
our topic. In full, the WAZ provides insurance against the financial consequences of long-term disability
and a benefit scheme in connection with childbirth for self-employed people, partner spouses and other
non-employees with earned income. Several arguments were advanced for sustaining a social
insurance scheme for self-employed people, closely resembling the arguments that had been advanced
some twenty years earlier with the introduction of the AAW. If left to their own devices, self-employed
people would waive their insurance due to considerations related to cost or to an optimistic estimate
of their own risk. Should disability occur in such a situation, its effect would be to shift the costs to the
General Assistance Act. Insurers cannot guarantee that they will be able to offer accessible and
affordable private insurance to all self-employed people. This is because such a plan would involve
individual contracts, the acceptance and premiums for which would be determined largely according to
the insurer’s assessment of individual risk.38
It is also worth noting that the legislature has made every possible effort to prevent groups of nonemployees from falling through the cracks. Directors and major shareholders would fall under the
scope of the WAO, while groups of “non-employees with other earned income” (e.g. home-care
workers, clergy and freelancers without employment contracts) were insured under the WAZ.39 A
government subsidy was provided for the costs of insuring these non-employees, as the Cabinet did
not consider it desirable for self-employed people to be burdened with the additional expenses
associated with this expansion.40 Such considerations were absent from discussions concerning the
transitional law. The point in this context was that people who had previously fallen under the AAW
cases would retain their rights under the old conditions and that these existing cases would also be
funded by the Disability Fund for the self-employed.41
Six years later, another source was tapped. The coalition agreement for the Balkenende II government
announced the elimination of the WAZ “in order to improve the scope of social insurance schemes”.
This improvement was once again dominated by the structural promotion of participation in the labour
market. The measure was legitimised with the observation that it was “essentially possible” to cover the
risks of disability for self-employed people “with private insurance”. Moreover, self-employed people
make a conscious choice for entrepreneurship, along with all of opportunities and risks that it entails.42
Hilhorst’s “grasshopper” argument (note 3 above) was apparently no longer a point for
consideration.
The government was able to get away with this about-face because the WAZ had already become quite
unpopular.43 MKB Nederland (the largest entrepreneurs’ organisation in the Netherlands) felt that the
level of benefits were out of proportion to the premiums to be paid. Moreover, and to the great
irritation of the organisation, the sharp increase in the WAZ fund – which amounted to approximately
€1 billion at the end of 2004 – had not resulted in premium reductions. They had further determined
that the conditions of private insurance policies were often more favourable and that, in some cases,
they were also less expensive.44 The WAZ was attractive, though, to freelancers with below-average
earnings; for self-employed people with annual income of less than € 13,000, the insurance was even
free. The various unions affiliated with the FNV also did not oppose the elimination of the WAZ. They
would nevertheless have preferred to see some discussion of alternatives, such as collective basic
health insurance or public disability insurance without a “tail burden”, which is another term for the
cost of benefits to those previously eligible for the AAW.45
These alternatives received no serious consideration. The government compiled all of the various
objections to the WAZ – no need for compulsory insurance amongst the target group, excessive income
solidarity, disproportionate premium pressure in relation to coverage – into a single argument for
abandoning the principle of social insurance for the self-employed. It was acknowledged, however, that
the elimination of this arrangement could be problematic for certain groups. For this reason,
agreements were made with the Dutch Association of Insurers for a guarantee scheme for selfemployed people who had been denied by an insurer or who were able to obtain insurance only with
medical exclusions or additional premiums. This arrangement appeared simultaneously with legislation
that terminated access to the WAZ. It was amended in 2008, in consultation with the various selfemployment interest groups, the Ministry of Financial Affairs and the Ministry of Social Affairs and
Employment. According to the 2009 legislative evaluation, however, very little use was made of this
scheme.46 To the best of my knowledge, the quality of the guarantee scheme has never been
investigated. For this reason, we can never be certain whether the group for which this product was
intended is acting irresponsibly or whether it is perfectly justified in avoiding it.
The legislation that terminated access to the WAZ also eliminated the public facilities for covering the
risks of pregnancy and childbirth for the self-employed. This measure was reversed several years later,
as the risks of pregnancy and childbirth proved less easily covered by private insurance than had been
estimated before the scheme had been eliminated. Moreover, according to the explanation
accompanying the legislation on pregnancy and childbirth benefits for the self-employed, the absence
of such arrangements would increase the risk that too many women would continue to work up to
delivery and resume working too soon thereafter. This could endanger their own health, as well as that
of their children.47 With respect to this measure the government’s action was perfectly timed. Two
years later, the EC issued a directive requiring Member States to provide at least a certain degree of
social protection for self-employed people with regard to pregnancy and childbirth.48
Attention from the European Union
The latter example brings us to the European Union’s approach to self-employment. Earlier in this
address, I mentioned the 1999 Supiot report that had been commissioned by the European Commission.
The Commission had invited a group of experts to outline the contours of the changing labour
relationships in the various Member States, and to examine the manner in which national and
European labour law should respond to these developments. Seven years after publication of this
report, the theme “Labour and Europe” appeared on the Commission’s agenda once again, this time in
the form of a Green Paper, which is a policy document that could serve as a prelude to legislation. This
document contained an analysis of the challenges facing labour law in the 21st century, and it invited
the Member States and all stakeholders to consider the analysis and some practical issues that were
related to it. The document identified the issue of how labour law could evolve to support the
objectives of the Lisbon Strategy regarding sustainable growth to achieve more and better jobs as the
“central challenge for Europe”. Flexicurity can play an important role in this regard, not as an end in
itself, but a means towards a “fairer, opener and more integration-oriented labour market that
contributes to improved European competitiveness”. A footnote adds that labour law is not the only
relevant factor. A revision of the tax burden may also be necessary in order to create jobs, particularly
low-paid jobs. Further contributions could be achieved by shifting the emphasis from labour taxes to
consumption or pollution.49
In this document, self-employment was approached primarily from the demand side. The Green Paper
described self-employment as an “opportunity to respond flexibly to the need for restructuring, to
reduce the direct and indirect costs of labour and to apply resources more flexibly in response to
unforeseen economic circumstances”. “In many cases”, states the Green Paper, self-employment is a
free choice for suppliers. In exchange for the lesser degree of social protection, self-employed people
gain more direct control over their pay and working conditions.50 The source of this claim is unclear; no
reference is made to statistical support or evidence from research in this regard.
After mentioning the benefits of the various forms of working, the document addresses their social and
societal risks. The Commission addresses these risks only with regard to employment, unless the term
“employee” can be understood to include freelancers and the term “employment” to include project
agreements with self-employed contractors. The Green Paper refers to “an increasing variety of
employment relationships”, ranging from workers who “have become trapped in a succession of shortterm, low-quality jobs” to “atypical contracts that do not result in better-protected employment, even
in the long term”. The analytical portion of the document concludes by noting that the Commission
intends to initiate a debate on the necessity of more flexible regulations in order to “help workers
anticipate and manage change, regardless of whether their contracts are permanent or of an atypical,
temporary nature”.51
Self-employment does re-appear in the concrete questions. Questions 7 and 8 concern the desirability
of clarifying the legal definitions of employment and self-employment (7),52 and the need for a floor of
rights to regulate the working conditions of all workers, regardless of the form of their employment
contracts (8).53
Almost immediately, the Green Paper generated a deluge of criticism from both academics and the
various stakeholders. Professor Silvana Sciarra, who holds the Jean Monet Chair, notes that the Green
Paper “rotates around ‘modernization’, a non-legal concept which leaves space to different approaches
and proposals. The ambivalence of this terminology (…) may cause some interpretative doubts”.54 The
employers’ organisation UNICE expressed its “deep concern” about the message of this document,
which paints an unjustified negative picture of flexible forms of employment and self- employment.
Moreover, it suggests an implicit agenda for the harmonisation of labour law that would come at the
expense of growth and employment and that is at odds with the flexicurity approach.55
The representative body of private employers with a public purpose, CEEP,56 was of the opinion that
the Green Paper posed the right questions but to the wrong actors. The employees’ organisation ETUC
argued that the Commission had addressed only part of the issues that should have been placed on the
agenda, wrongly suggesting that the cause of all problems lies in the fact that standard employment
contracts offer too much protection. Finally, the Platform of European NGOs announced that it was
pleased with the timely consultation on how to address the gaps in the protection of workers and the
establishment of a European social standard. On the other hand, the NGOs denounced the limited
approach of the Green Paper, which ignored many aspects of flexicurity, including infrastructure,
supportive activation policies and investments in lifelong learning. The president of the Platform,
Anne-Sophie Parent, noted that European citizens are concerned about the manner in which Member
States compete with each other by lowering taxes and reducing workers’ rights in order to win
investments. “If the EU does not act on that, it will never regain the confidence of people”.57
The initiative ultimately died a quiet death. The Commission issued a further communication on the
results of the public consultation,58 after which the topic disappeared into a European desk drawer.
The analysis in the Green Paper nevertheless provides a good picture of how the “new” selfemployment was perceived at the European level less than five years ago. In addition, several
publications that appeared in response to this document show that the legal aspects of the grey area
between independent enterprise and employee status can be approached in many different ways.59
Finally, this state of affairs provides an interesting illustration of how self-employment moved from the
spotlight to behind the curtains less than ten years after the Supiot report. The ball is over, and
Cinderella is back in the kitchen. But this obviously does not mean that she has disappeared.
Back to the transition risk
It is time for a brief review. I have attempted to provide some insight into the socio-economic position
of freelancers and other small businesses, as well as the social work-related risks that they may face. I
have also shown that this issue received considerable attention ten years ago, but that this attention
currently appears to have slackened. In his speech on the occasion of the Thirteenth National Labour
Law Dinner, Houweling notes that the conclusion that freelancers are on their own with regard to their
social risks can be contrasted with the fact that freelancers/entrepreneurs enjoy numerous tax
advantages.60 Be that as it may, such benefits do not count until a company has become successful and
thus profitable. As we have seen, for quite a few small independent entrepreneurs this is not the case.
I would like to use the rest of this lecture to make several observations and, in a few cases, specific
recommendations regarding the risks that I have described. I shall begin with the transition risk, or the
case of “starting as a social insurance beneficiary”. My inspiration for this case came from the report by
Hurenkamp, Tonkens and Duyvendak entitled Wat burgers bezielt (“What motivates citizens”).61 In this
report, the authors establish that the government is once again in search of citizens: what motivates
them, what do they need, and how can the government enter a good relationship with them?
Although these questions were raised in the context of volunteering, they are also relevant in relation
to people who display what Hilhorst calls “social resilience”, or the ability to absorb setbacks. Hilhorst
uses this term in relation to such group initiatives as the Bread Fund that he describes. A Bread Fund is a
savings reserve in which freelancers invest money in order reduce their risks collectively, and thus for
themselves as well.62 In this respect, they resemble the medieval guild chests which were early
precursors of social insurance.63 On the other hand, “resilience” can also be a matter of individual
actions, including the exchange of the relative security of social insurance for life as a freelancer. Can
social insurance help to reinforce the resilience of such entrepreneurial people and, if so, what does this
require? I have deliberately chosen to formulate the question in this way, as the treatment that
has befallen both types of starters can more appropriately be described as demotivating than as
motivating. How can this be? And, more importantly, can something be done about it?
For Carla, it was determined that she had to repay much more than she had earned, based on a scheme
for WAO recipients who had not yet recovered, but who had already begun to earn income. In this sort
of situation, the benefit is not repealed or revised, but the earnings are translated into a lower extent of
disability and thus a lower benefit payment. For freelancers, of whom it is usually uncertain whether
they will realise a profit, the benefit payments are tentatively based on the old level, with any profit
figures being used retrospectively to adjust the benefit percentage downwards.64 According to
established jurisprudence, the adjustment for self-employed people is calculated according to the
annual profits accepted by the tax authorities.65 Such calculation could have either favourable or
unfavourable effects. Upon filing the tax return, therefore, Carla or her accountant should have been
aware that there is more at stake than how much income tax she would either be refunded or be
required to pay. Retrospective recovery – which is deemed in most cases inappropriate and therefore
unlawful in many situations – is in fact permissible, as self-employed people report their information
only in retrospect, after the end of the fiscal year. In certain circumstances, retroactive recovery can
still be contrary to legal certainty or other general principles or unwritten rules.66
One nasty side effect is that the recovery takes place on the basis of a gross amount; it was up to Carla
to request a refund of any double tax that had been assessed for and by her. The law allows the UWV
no discretionary space or authority to relax its approach in such cases.67 It is thus quite possible that
the settlement in Carla’s case proceeded according to the rules. Even so, however, this is not the entire
story. First, a good board should be expected to inform any WAO recipient who is considering selfemployment in advance about the possible consequences. In this regard, counselling that amounts to
no more than “report back in a year” would seem to a bit careless, almost as if the freelancer is going
cold turkey. A more fundamental question is whether the legal system is still relevant in contemporary
situations. What if the UWV had warned Carla? Would she have dared to take that step? Or would she
have buried her plan, as it ultimately proved too risky? And what would have happened if that had
indeed been the case? Is it not time to reflect upon the perverse effects on those embarking on the path
of entrepreneurship from within the context of the WAO? I shall set this question aside for a moment
and return to Bertus.
Bertus was fortunate in that his case was not isolated, as with Carla, who had to wage her battle
against the bureaucratic windmill as a lone Don Quixote. Because Bertus represented a great many
“Bertuses”, his case led to an investigation by the National Ombudsman, in addition to many rounds of
parliamentary questioning and, in the words of Fluit and van der Schaft, a “damning report” on the
UWV’s implementation of the starters’ facility.68
I shall again begin with the legal background of the case. The Unemployment Act (WW) of 1985
establishes the general rule that starting to work as a freelancer heralds the end of eligibility for
benefits. This can refer to all benefits or only a part, in cases involving the gradual start-up of a
company. Those wishing to start businesses from within the context of the WW must submit periodic
retrospective reports of the hours they have worked, followed by a proportionate reduction in the
hours used to determine WW benefits. The termination of eligibility is irrevocable; once it has been
suspended, it remains suspended, even if the number of hours of self-employment decreases
thereafter.69 The law does allow for the possibility of renewing the benefits for entrepreneurs who
discontinue their business activities within eighteen months, although this requires the actual
termination of the business.
In the late 1990s, various measures were taken to strengthen the activating character of the social
security scheme. One of these measures involved the introduction of an orientation period in the WW.
During a period of up to six months, there was no obligation to seek employment, thus allowing
prospective freelancers to prepare for entrepreneurship without losing their eligibility for benefits.
Such preparation could include matters such as writing a business plan, registering with the Chamber
of Commerce and arranging for loans and insurance, but not soliciting customers or conducting any
other business activities. This scheme was in effect from 1998 until 2007.
In 2006, a more structural scheme for starters emerged.70 This scheme allowed unemployment
recipients wishing to start their own businesses to be self-employed for up to six months without
affecting their eligibility for benefits. It did require a plausible chance that prospective starters would
be able to support themselves structurally with their companies. During this period, benefits were paid
as an advance, being settled afterwards with 70% of the profits from business. It was not necessary to
specify the number of hours devoted to the company, and activities carried out for the company were
equated with job-application activities.71
Bertus had started under the old scheme, and he had reported the number of hours that he had spent
on his company, although this total was lower than the number of hours he had reported to the tax
authorities in order to claim the self-employed deduction. Was that fraudulent? If he had taken his
case to court, I would not have expected him to have much of a chance of winning, but the National
Ombudsman ruled otherwise. An investigation by the Ombudsman’s office revealed that, during the
period in which Bertus was starting his company, various information leaflets had been in circulation,
thus making the legal playing field extremely opaque. Just how opaque the situation was became
evident through the file comparisons conducted within the context of the investigation. Of all those
who had started businesses under the old system, 42% had committed benefit fraud
The freelance dossier as a wake-up call
As a result of this bizarre outcome, the dossier on the WW and self-employment had political
consequences. In this case, the House of Representatives, which is usually eager to take action
whenever any type of abuse is suspected,72 saw cause to request the Minister of Social Affairs to allow
the UWV additional space in which to waive recovery “in cases of government failure”.73 Honouring
this request would amount to a relaxation of the rules for collection and recovery, which had been
tightened considerably during the 1990s. Unfortunately for the Bertuses and Carlas of the future, the
Minister informed the House of Representatives that he was not amenable to this request. In his view,
the most important lesson from the freelance dossier was that “citizens should be provided with
adequate information, without abandoning the principle that all citizens are responsible for educating
themselves about their rights and obligations”. In addition, the regulations should be such that they
can be applied without the use of discretionary authority. According to the Minister, broad
discretionary powers, such as those requested by the House of Representatives, would threaten the
uniformity of practice.74 This response implied a promise for future regulation: in the future, this would
become clear, unambiguous and easy to interpret and apply. I shall set these ambitious targets aside75
and return to the motivation of citizens.
In this respect, the context of social security requires modesty. As a vehicle for the allocation of public
funds, social security is more of a straitjacket than it is an incentive for daring ideas and
unconventional solutions. It would already be a big step forward if the regulations and their
implementation did not impose excessive obstacles for people like Carla and Bertus. Inspired by these
two real-life examples, however, I can identify several points for improvement for which I would like to
present as recommendations.
A few specific recommendations
My first recommendation concerns the establishment of a public-private advisory and information
service for benefit recipients who are considering the option of entrepreneurship. Although such
offices do currently exist, most have either a public or a private character.76 A public-private
partnership or PPP can bring together the best of both worlds. The office could be located in the
existing job centres and staffed by employees of the Chamber of Commerce, municipality and the UWV
as public parties, along with a representative of an interest group for self-employed people as a private
substantive expert. This office could organise afternoon information sessions in the spirit which the
PZO spokesperson described as follows: “Know who you are and know your abilities”. But also: think
carefully before you take this step. You do not become an entrepreneur overnight, and
entrepreneurship is not for everyone. In this respect as well, the expertise of an organisation of selfemployed people could help in assessing both the commercial and personal chances of survival for the
company.
The office would also be intended for annual or semi-annual progress conferences. In these
conferences, the operating results of the previous period (twelve or six months) could be discussed
and, if applicable, the relative wisdom of continuing or stopping. Afterwards, and this is my second
suggestion, the agreements on such matters as extending the trial period and the repayment of
benefits received could be recorded in writing and signed by both parties. This trial period could be –
this is my third suggestion – extended twice for a maximum of eighteen months. This would be
equivalent to the irrevocability period in the WW. The starting point for the discussions would be an
approach based on high trust and the acknowledgement that starters are faced with many issues in the
initial period and that they are not intending to swindle anybody. During the initial period, it will
therefore be necessary to overlook more than in later stages, when people have become familiar with
the way things work. And yes, this does indeed imply that the UWV should have more discretionary
power, just like that which has already been allowed to municipalities for years now. Especially for the
Minister of Social Affairs, I add that discretionary power does not necessarily lead to arbitrariness, and
that letting go of uniformity in social security can also be thought of as customisation. To those who
are afraid of wasting public money, I would say that not always recovering every last euro can also be
seen as an investment in a new business and thus in moving out of public assistance. There are
undoubtedly several snags – for example, when such terms as “investment” and “unfair competition
risks” are used. With clear delineation and a solid foundation, however, these problems can be
resolved.
Reprise: illness and disability risk
My second set of recommendations concerns a social risk that is considered the most problematic risk
associated with freelancing: that of debilitating illness and long-term disability. From my argument, it
should be clear that the label of “freelancer” is too indefinite for general statements. The same holds
for such terms as “new” or “small” self-employed people. This explains why some advocates of
freelancers consider certain government interventions as commandments, while others are equally
resolute in rejecting them. It also explains why, according to the statement of the PZO, the majority of
its members have no desire for state-organized social insurance, even as a growing group of
freelancers are organising themselves in archaic and substantively vulnerable Bread Funds. This fact is
consistent with the findings of Dekker. Dekker interviewed about 40 freelancers – 25 in the IT sector
and 15 in the construction sector – and found that there was indeed a base of support for collective
coverage against illness, disability and age. There was considerably less enthusiasm for collective
unemployment insurance. Indeed, according to the respondents, considerably less money should be
used for this purpose.77 Finally, the multiplicity of the target group can explain the nuanced
recommendations of the SER on this point. Nuance, however, is not the same as division: the SER
managed to herd all of the cats and reach a unanimous recommendation. On a less positive note, this
unanimity was achieved by introducing a working definition that is suitable for separating the
employee sheep from the goats that fall outside of the employee-insurance rolls, but which says
nothing about an individual’s social or socio-economic position. Such information is a crucial element
for research or statements concerning the base of support for or the desirability of collective
arrangements. Because, although we may tend to overlook this aspect in our unified and egalitarian
welfare state, social insurance thrives best in fairly homogeneous collectives.
For this reason, I would advocate a fresh reconsideration of the combination freelancing and social
disability insurance, eight years after the WAZ fiasco. I was inspired to make this recommendation by
the programme Goudzoekers (“Prospectors”) that was broadcast by VPRO last summer. Allow me to
present the last case study for this afternoon.
Gerard was 43 years old and worked in the construction industry. Five years earlier, he had discovered
that he could exploit his abilities more fully by not working for one boss, but according to project
contracts for multiple companies. The business prospered, Gerard had a profitable company and he
was enjoying prosperous times. Then the recession struck. In October, he and many of his colleagues
were informed that there would be no more contracts after 1 January. Gerard did what many of the
previously mentioned freelancers in “hidden suffering” do: he tightened his belt and drew on his
reserves. Approaching the municipality for temporary support was not an option, as he was self-
employed. The only way that he could qualify for assistance would be to go out of business, and he was
not yet ready to take such a step. At one point, he cancelled his disability insurance, as he needed the
money to live on. Three months later, Gerard had a heart attack. You can fill in the rest.
This case shows that the arguments that were advanced 60 years ago, when the post-war employee
insurance schemes were being designed, are no less relevant today. However understandable it may
be under such circumstances, society should not allow people like Gerard the freedom to cancel their
insurance, at least not as long as our social system maintains such a binary structure. You are X and
therefore not Y; if you are Y, you can no longer be X.
Does this amount to a plea for returning to the WAZ? Absolutely not. From the outset, the WAZ was an
historical mistake, and it is not surprising that no self-employed person – and not even the relevant
interest groups – would like to return to that law. The insurance was unnecessarily expensive, as the
principals in the self-employment system were not involved in the premiums, while those premiums
were moreover used to pay for benefits for people who had nothing to do with Gerard and his
counterparts. And the scheme was inadequate, as it was designed according to principles that have
little or no relationship to self-employment. That was already the case under the classic regime of the
ZW and the WAO, and it became even worse with the discovery that employers are responsible for
reintegration, the ZW was eliminated and the waiting time for disability benefits was extended to two
years. By that time, self-employed people like Gerard would have used up all of their reserves and be
bankrupt. Self-employed people need another product that would be better suited to their position as
well as their social and occupational risks. My guess is that if we were to succeed in developing such a
product, the willingness to invest in such a scheme would increase rapidly.
The question whether such an arrangement will ever materialise is obviously up to the politicians. In
the 2009 policy brief entitled Zelfstandig ondernemerschap (“Independent enterprise”), the
government identifies as the “underlying rationality of policy” the fact that self-employed
entrepreneurs require no inequality compensation.78 This is not a good omen, although I would not
label an arrangement that does what is needed in this respect as inequality compensation, but as the
facilitation of professional solidarity. Instead of advancing even more substantive arguments, I would
like to take you to the year 2016, when I will give a lecture on a new social insurance scheme that will
take force in the next year.
Freelancers and social insurance, a beckoning prospect
Ladies and gentlemen, next year, the Exit and Reintegration Act for Self-employed Workers (WURZA)
will go into effect for the construction and technology sectors. This arrangement is an experiment; if it
proves successful, it will be extended to the care and commercial haulage sectors. The IT and
consultancy sectors, in which just as many self-employed people are active, have requested in great
numbers to be allowed not to take part in this experiment.
Those who would be insured and obligated to pay premiums would be self-employed people – without
personnel or with only a few employees (no more than five) – with an average annual turnover of at
least € 20,000. Starters will be exempt from premiums for the first two years, and self-employed
people with a lower annual turnover can take out a voluntary insurance policy. The premiums will be
levied by the WURZA-Construction department, which will form a separate branch within the UWV.
This department will collect the premiums for the large and medium-sized employers in the
construction industry, for whom a certain degree of commissioning is assumed. The scheme is funded
in accordance with the formula of “50% independent, 50% principal”.
Self-employed people who are unable to work due to illness will report this to one of the three ARBO-Z
services operating within this sector, and they will be assessed within one week. At that time, a dossier
will be opened, which the self-employed person will be responsible for maintaining. Workers who have
not yet recovered after six weeks must take their dossiers and report to the Z benefits office. Depending
on the disability, applicants will receive benefit payments of 70% (complete disability), 50% (two-thirds
disability) or 35% (between one and two-thirds disability) of the average annual turnover over the past
three years. The maximum benefit duration is two years. For the period thereafter, voluntary WIA
insurance can be arranged with the UWV.
In addition to temporary benefit payments, the legislation will offer reintegration programmes for selfemployed people who do not have the option of returning to their previous occupation. This will be
funded by the construction industry’s education and development fund. It will not be necessary to wait
six weeks before starting such a programme. If the self-employed person and the monitoring physician
agree, re-training can begin immediately. A bonus will be awarded to self-employed people or their new
employers for the successful completion of the reintegration programme within the maximum benefit
duration.
You will understand – and I now return to 2011 – that these are just the main points, and that they are
accompanied by several political choices. Nevertheless, I thought it would be a good idea to sketch a
tentative outline of a scheme that would eliminate a substantial portion of the illness risk for small
entrepreneurs without immediately imposing excessive costs. The six-week waiting period and the
limited benefit duration guarantee that people will not make unnecessary use of the arrangements and
that they will not linger in them unnecessarily.
Conclusion
Ladies and gentlemen, I shall now come to my conclusion. A lot is happening in my field. The implosion
of pensions, work according to ability and the never-ending reintegration file are just a few of the
major topics. The topic I have selected for my address today is one about which we hear much less, but
which more than deserves the attention of the law. It a fitting case for the HSI research programme on
changes in the legal order of labour. I plan to keep the small entrepreneur as a focal point within this
domain, and I would like to conclude my story with three propositions.
First, the treatment of small entrepreneurs is duplicitous. On the one hand, they are hailed as the new
heroes. On the other hand, they are met with indifference when they encounter legal barriers or social
risks. Good examples include the case of “starting while receiving social insurance” and the dossier on
the Declaration of Employment Status, which protects the customer and saddles the quasi-employee
with two negatives: none of the benefits, all of the risks.
Second, the realisation that quite a few small entrepreneurs only appear to be self-employed and that,
even if they have chosen this path voluntarily, they encounter a number of uninsurable practical risks,
should once again have a place on the scientific and policy agendas. In other words, freelancing is a
matter not only for the Ministry of Economic Affairs and Innovation, but also for the Ministry of Social
Affairs and Employment. We must take care not to allow the modest demands of a small group to be
drowned out by those who are in a stronger position both numerically and economically.
At the same time – and this is my third proposition – the category of freelancers is insufficiently definite
for generic policy. A more successful alternative to a single collective arrangement would be more
categorical arrangements that would address the need for protection on the part of a majority in the
sector and that would be grounded in the basic principles of social insurance: mandatory participation,
risk solidarity and shared financing. Such arrangements could operate through legislation or through
collective labour agreements – that is less relevant. It is more important that the issue is redeemed
from its present permissive, opportunistic character.
Finally, the title of my address refers to the freelancer as the stepchild of labour law. In fairy tales, a
bright future is in store for stepchildren. But life is not a fairy tale, of course…
Acknowledgements
I have now come to the end of the substantive portion of my address. I should like to close by thanking
several people. I shall begin with the Dean of this faculty. Edgar, thank you for your efforts to retain the
Chair in Social-Insurance Law within this faculty. I am committed to using this Chair to the fullest in
order to ensure that this wonderful field continues to receive the academic and societal interest it
deserves. The second person whom I would like to thank is the head of the Department of Labour Law,
who has ensured that I have the privilege of holding this Chair. Evert, thank you for the trust you have
placed in me, and thank you for our inspiring and occasionally electrifying cooperation. To my
colleagues in the Department of Labour Law and my colleagues in the HSI: I would like to thank you for
the pleasant working environment and collegiality that I have experienced over the years. A special
word of gratitude is in order for Els Sol, who has helped me to grow from a mono-disciplinary into an
interdisciplinary researcher. I would also like to thank Teun, my supervisor and academic advisor from
the very beginning. Teun, thank you for kick-starting my career as a scientist and for continuing to
believe in me and in my potential, even when I did not yet believe in it myself. I will not devote too
many words to the home front today. Anuscka knows how I feel about her, and if she does not, I will
tell her at some other time.
I would also like to mention several people who have contributed to the creation of this speech. Alex
Brenninkmeijer pointed me in the direction of citizen motivation, and Catelene Passchier assisted me
in sharpening the focus of the topic. I am also grateful to the research respondents: Mieke van Westing
of the PZO, Linde Gonggrijp of FNV Zelfstandigen and Johan Marrink of ZZP Nederland. In this regard, I
must obviously also mention Sakina Kodad, the student assistant for Labour Law, who helped me to
gather all the material that I have presented today.
My final words are for those for whom we do it all, our UvA students. Do not allow yourselves to be
fooled by people who say that social-security law is boring or extremely technical. Those who say such
things know the field only from the outside, or their work has caused them to be too involved in it.
Social security poses questions that are of great public interest. With whom do we wish to show
solidarity and with whom do we not? What do we feel that we can expect of people, and why? And
how can we then translate all this into rules that are both fair and easy to implement, and that can be
understood by the citizens who are affected by them?
I have spoken.
Notes
1. Bakker Commission “Naar een toekomst die werkt” [Towards a future that works], Rapport van de
Adviescommissie Arbeidsparticipatie [Report of the advisory committee on labour participation], 2008.
2. H. Bosschenbroek & J. van den Berg, Doel, grondslagen en geschiedenis der sociale verzekeringen in
Nederland [The objective, foundations and history of social insurance in the Netherlands], The Hague,
1952, p. 102.
3. P. Hilhorst, “Het broodfonds” [The bread fund], De Volkskrant, 12 July 2011.
4. Karin Schulze Busschoff, Claudia Schmidt, “Adapting labour law and social security to the needs of
the ‘new self employed’ – comparing European countries and initiatives at EU level”, WZB discussion
paper, December 2007, ISSN nr 1011-9523.
5. From: M.C.M. Aerts, De zelfstandige in het sociaal recht. De verhouding tussen juridische status en
sociaal-economische positie [The self-employed in social law: the relationship between legal status and
socio-economic position] (doctoral dissertation), UvA, 2007, p. 5.
6. A. Supiot (ed.), “Beyond Employment, The transformation of work and the future of labour law in
Europe. Report for the EC”, 1999. Source: Deakin (2002), see Note 7 below.
7. S. Deakin, “The many futures of the contract of employment”. In: J. Conaghan, R.M. Fischl, K. Klare,
Labour law in an era of globalization, Oxford University Press, 2002, p. 177-197.
8. P.H. van der Heijden, “Een nieuwe rechtsorde van de arbeid” [A new legal order for labour], NJB
1997, p. 1837-1844.
9. A. Supiot, Beyond Employment, Oxford University Press 2001, p. 4, 5. Several country reporters have
co-authored this report, including labour-law Professor van der Heijden from our country.
10. A.R. Houweling, “ZZP: wat wil, moet en doet het arbeidsrecht ermee?” [Independent labour: what
is labour law doing about it, what does it aspire to do and what should it do?] AR 2011, 8/9 Katern, p.
6.
11. EC Green Paper, “Modernising labour law to meet the challenges of the 21st century”, Brussels
22.11.2006, COM (2006) 708, p. 8. The Green Paper suggests that the 15% amounts to 31 million and
indicates that the category of “self-employed without employees” constitutes 10% (two thirds of this
31 million).
12. Houweling (2011) with regard to the definitions of CBS, SER and EIM (Enterprise Information
Management).
13. Aerts (2007), p. 7, with regard to a statement of the Platform for Independent Contractors (PZO).
14. “Zzp’ers in beeld” [An overview of freelancers], Recommendation of the Social and Economic
Council of the Netherlands (SER) dated 15 October 2010, SER, 2010/04.
15. F. Dekker, Flexible employment, risk and the welfare state (doctoral dissertation), Ingkamp
Drukkers, Enschede, 2011, Chapter 5.
16. The PZO has about 2000 direct members and 18,000 people who are members through ties to the
affiliated member organizations. The second large organisation, FNV Zelfstandigen, has about 30,000
members. Another example is ZZP Nederland, which began as a helpdesk for freelancers and which has
become a source of information for freelancers, having nearly 18,000 members. These figures overlap
to some extent, however, as many of the self-employed are members of two or all three agencies.
17. SER Recommendations 2010, p. 91.
18. “Flexwerkers weer aan de slag. Herstel van de arbeidsmarkt komt voornamelijk van ‘éénpitters’”
[Flexworkers back on the job. Labour-market recovery largely due to one-person operations]. NRC
Handelsblad dated 9 December 2010.
19. NRC Handelsblad dated 8 December 2010.
20. TK 2010-2011, Appendix 1476, regarding TK 2009-2010, Appendix 1739.
21. Vision document on collective labour agreements (CAO) for self-employed people and the
Competition Act (Mededingingswet) Stcrt 12 December 2007, nr 241, p. 29. District Court of The
Hague, dated 27 October 2010, LJN BO3551.
22. SER Recommendations (2010). Cabinet reaction to the SER recommendations, dated 4 March 2011,
Parliamentary Papers II, 31 311, no. 71, p. 10, 11.
23. Art. 38.3. An employer who acquires an object due to re-contracting (hereinafter contract change)
shall offer employment contracts to all employees who had been working at the object for at least 1.5
years at the time of the contract change, with the exception of…
24. Interview with L. Gonggrijp, July 2011. Later (October 2011), discussions were held with FNV
Bondgenoten [labour partners] in order minimise the potential adverse effects of this ruling for the
self-employed.
25. S. Heeger-Hertter and I. Koopmans, “Biedt de WW een transitiefaciliteit voor startende
zelfstandigen?” [Does unemployment insurance offer a transitional arrangement for self-employed
starters?] TRA 2010, 12.
26. EM on the expansion of legal consequences of the Declaration of Employment Status;
Parliamentary Papers II, 2003/04, 29 677, no. 3. Van der Wiel-Rammeloo notes that with the measure
“the promised clarity has obviously not been achieved, and there is no reason to expect that it will be
achieved”. D.V.E.M. van der Wiel-Rammeloo, “De verklaring arbeidsrelatie: goedbedoelde
schijnzekerheid” [The Declaration of Employment Status: a well-meaning illusion of certainty], MBB
2003/71.
27. TK 2010-2011, Appendix no. 387, dated 2 October 2010. (Several quotation marks by MW.)
28. Cabinet response to the SER recommendation “ZZP’ers in beeld” [An overview of freelancers],
dated 4 March 2011, Parliamentary Papers II 2010/11, 31 311 no. 71.
29. Source: interview with J. Marrink, August 2011.
30. This observation, noted during interviews in 2011, contradicts the conclusion from the legislative
evaluation report (EIM 2007, p. 30) that PZO and FNV-Z had both indicated that no ambiguity would
remain for either the client or the contractor after a Declaration of Employment Status had been
issued. In this regard, van Westing noted that there had thus far been no signals that the scheme had
caused any problems, but that the situation had changed. By way of explanation, she suggested,
“Perhaps the control had been tightened”. Source: interview with van Westing, July 2011.
31. AFM, “Arbeidsongeschiktheidsverzekeringen voor zelfstandigen” [Disability insurance for the selfemployed], 2011. Hilhorst (2011).
32. EM AAW, Parliamentary Papers II 1974/75, 13231, no. 1-4, p. 42 and 276.
33. EM AAW, p. 43 with regard to a report by the Council for SMEs from 1964.
34. EM AAW, p. 43 with regard to SER publication 1965, 14.
35. EM AAW, p. 62, 63.
36. Noordam attributes the disappearance of the General Disability Act (AAW) and the arrival of the
Disability Insurance Act for Self-employed People (WAZ) and the Disability Insurance Act for Young
People with Disabilities (Wajong) to revisions in the method of financing the Disability Insurance Act
(WAO). F. Noordam, Socialezekerheidsrecht [Social security law] (5th printing, 2000), p. 143. Before it
reached this point, the AAW 1976 had also undergone considerable difficulty with various revisions,
many of which had been deficient.
37. For a more detailed treatment of this issue, see M. Westerveld and A. Veldman,
“Inkomenszekerheid en gelijke behandeling, de stelselherzieningen van de vorige eeuw” [Income
security and equal treatment revisions in the past century], Nemesis 2003/5, 6.
38. EM WAZ, Parliamentary Papers II 1995/96, 24758, no. 3, p. 13.
39. EM WAZ, p. 2.
40. EM WAZ, p. 3.
41. EM WAZ, p. 4.
42. ME on the legislation ending access to WAZ, Parliamentary Papers II 2003/04, 29497, nr. 3, p. 2.
43. This twist was neither denied nor ignored in the EM. The notes refer to the 1998 considerations
regarding the desire to maintain public insurance for self-employed people. They further state that the
elimination is based on a closer examination of the necessity and desirability of this public insurance.
“In addition, the developments since the introduction of the WAZ have been considered and the effects
of elimination have been inventoried”.
44. Aerts (2007) p. 284, with regard to MKB Nederland, “Wet Arbeidsongeschiktheid Zelfstandigen”
[Disability Act for the Self-Employed], Delft 2003.
45. Aerts (2007) p.284.
46. P. de Jong, L. van Meyenfeldt, A. Tsiachristas and C. Franken, “Evaluatie Einde WAZ” [Evaluation of
the discontinuation of the WAZ], The Hague, Ape, 2009.
47. EM on the Pregnancy and Childbirth Act for the Self-Employed, Parliamentary Papers II 2007/08,
31366, no. 3, p. 1. In this regard, see also M. van der Burg and A. de Keizer, “Advies gelijke behandeling
van zwangere zelfstandigen. Aanbeveling voor een gelijkebehandelingsbestendig stelsel van
zwangerschaps- en bevallingsuitkeringen” [Advice for the equal treatment of pregant freelancers:
recommendations for an equal-treatment system for pregnancy and childbirth benefits]. CGB
recommendation of 2007/04.
48. Directive 2010/41/EU on the application of the principle of equal treatment between men and
women engaged in an activity in a self-employed capacity and repealing Council Directive 86/613/EEC,
7 July 2010. For further information on this point, see A. Eleveld and K. Hermans, “Nieuwe richtlijn
gelijke behandeling zelfstandigen” [New guidelines regarding equal treatment for self-employed
people], TRA 2010, no. 11, p. 34-36.
49. Green Paper (2006), p 3.
50. Green Paper (2006), p. 8.
51. Green Paper (2006), p 9.
52. Question 7: “Is greater clarity needed in Member States’ legal definitions of employment and selfemployment to facilitate bona fide transitions from employment to self-employment and vice versa?”
53. Question 8: “Is there a need for a ‘floor of rights’ dealing with the working conditions of all workers
regardless of the form of their work contract? What, in your view, would be the impact of such
minimum requirements on job creation as well as on the protection of workers?”
54. S. Sciarra, EU Commission Green Paper “Modernising labour law to meet the challenges of the 21st
century”, International Law Journal, vol. 36, issue 3.
55. http://www.euractiv.com/en/socialeurope/unice-seeks-labour-law-green-paper/article-158453
56. In full: European enterprises with public participation and enterprises of general economic interest.
57. http://www.euractiv.com/en/socialeurope/social-partners-react-grudgingly-labour-law-greenpaper/article-160035
58. Communication from the Commission to the Council, the European Parliament, the European
Economic and Social Committee and the Committee of the Regions dated 24 October 2007,
COM(2007) definitive.
59. E.S. Torres, “The Spanish law on dependent self-employed workers: a new evolution in labor law”.
S.Sorge, “German law on dependent self-employed workers: a comparison to the current situation
under Spanish law”. J. Fudge, “A Canadian perspective on the scope of employment standards, labor
rights and social protection: the good, the bad and the ugly”. Comparative labor law and policy journal,
vol. 31.
60. Houweling (2011).
61. M. Hurenkamp, E. Tonkens and J.W. Duyvendak, Wat burgers bezielt, een onderzoek naar
burgerinitiatieven [What motivates citizens: a study of citizen initiatives], University of
Amsterdam/NICIS Kenniscentrum Grote Steden [Centre for Knowledge on Major Cities], 2006.
62. P. Hilhorst, “Sociale veerkracht als vangnet” [Social resilience as a safety net], WBS 2 July 2011,
(2011a) http://www.wbs.nl/opinie/forum/1050/sociale-veerkracht-als-vangnet.
63. R. Knegt, “Verwijtbare werkloosheid en incentivering [Culpable unemployment and incentives]:
Two is company, three is none”. In: B.B.B. Lanting, S.S.M. Peters, M. Westerveld (eds.) Een trip langs de
hagen van het socialezekerheidsrecht [A trip along the hedges of social-security law]. Boom legal
publishers, The Hague, 2011, p.14, 15.
64. Art. 44 WAO in conjunction with Regeling samenloop arbeidsongeschiktheidsuitkering met
inkomsten uit arbeid [Scheme for coordinating disability payments with earned income].
65. CRvB 4 April 2008, LJN BC8876, RSV 2008, 164.
66. CRvB 5.11.2008, LJN BG3717, RSV 2009, 18.
67. CRvB 5.11.2008, LJN BG3718, RSV 2009, 19.
68. Nationale Ombudsman, “ZZP’ers met een valse start. Een onderzoek naar handhaving door UWV in
het project Samenloop zelfstandigenaftrek en WW-uitkering” [Freelancers with a false start: a study on
the UWV’s enforcement in the project on coordination of the self-employment deduction and
unemployment benefits], February 2010. For additional information, see the dossier on “zelfstandig
ondernemerschap” [self-employment], Parliamentary Papers II, 31311. P.S. Fluit and H.J. van der
Schaft, “De herzieningsoperatie van zzp’ers die vanuit de WW gestart zijn” [The revision operation for
freelancers that started in the context of unemployment benefits], TRA 2011, 23.
69. CRvB 8.12.1992, RSV 1993/106.
70. Art. 77a WW. Besluit vaststelling inkomsten startende zelfstandigen WW [Decree regarding the
establishment of income for self-employed starters on unemployment], Stbl. 2006, 35.
71. Klosse/Noordam, Socialezekerheidsrecht [Social security law], 2010, p. 77 with regard to CRvB
27.2.2008, USZ 2008/103, CRvB 15.10.2008, USZ 2009/46 and CRvB 3.6.2009, LJN BI8261.
72. The debates and parliamentary queries on benefits fraud provide illustrative and sometimes
amusing examples. As just one example, I mention a motion by de Jong, a member of the PVV, which
would make anyone exceeding the maximum personal wealth limit permanently ineligible for
assistance. The State Secretary could only discourage the motion “in light of the requirements of
proportionality and the fact that assistance is the ultimate safety net, as anchored in the Constitution”.
Parliamentary Papers II, 2010/11 17050 nos. 404 and 407.
73. Motion by Klaver/Vermeij dated 18 November 2010, Parliamentary Papers II, 2010/2011, 32500XV, no 9. This motion was passed on 15 March 2011.
74. Letter from the Minister of Social Affairs dated 30 May 2011, Parliamentary Papers II, 2010-2011,
31 311, no. 81.
75. As illustration, see F. Noordam “Socialezekerheidsrecht: ingewikkeld, ingewikkeld” [Social-security
law: complicated, complicated], in: S. Klosse (ed.) Schipperen tussen verantwoordelijkheid en
bescherming. Had Geers het geweten! [Compromising between responsibility and protection: if only
Geers had known!], Maastricht University Press, 2006.
76. Public: http://www.antwoordvoorbedrijven.nl/subsidie/bedrijf-starten-w?gclid=CKD75Pe8aoCFQMj3god2ytoFg; http://www.rijksoverheid.nl/onderwerpen/zelfstandigen-zonder-personeelzzp/starten-als-zzp-er/starten-vanuit-een-uitkering;
http://www.uwv.nl/particulieren/arbeidsongeschikt/weer-aan-het-werk-reintegratie/een_eigen_bedrijf_starten/index.aspx; private:
http://www.ikgastarten.nl/ondernemers/?gclid=CK2LmJG–aoCFUIm3godtTud3g;
http://startersuitkering.zzpnodig.nl/startersuitkering/starten-vanuit-een-uitkering.html
77. F. Dekker, “Opvattingen van zelfstandige ondernemers over sociale zekerheid” [Conceptions of
independent entrepreneurs regarding social security], Tijdschrift voor Arbeidsvraagstukken [Journal of
Labour Issues] 2011, 26(2), p 182.
78. Letter from the Minister and State Secretary of Social Affairs and the Minister of Finance dated 15
September 2009, Parliamentary Papers, 2009-2010, 313 311, no. 32.