Labor agreement vs assignment

The Joint Court of Justice of Aruba, Curaçao, Sint Maarten, and of Bonaire, Sint Eustatius and Saba recently had to answer the question whether an employment agreement existed or an assignment (a contract of services).

The respondent had been working at a massage parlor as a massage therapist since July 2016. According to the respondent, this is based on an employment contract.  The massage parlor stated that this is an assignment.

The therapists, working for the massage parlor, thus including the respondent, give their own preferred days, as well as the times, when they would like to work. When scheduling hotel guests who want to take a massage, this is taken into account (as much as possible).

During the hours when the therapists do not have to work, they are free to go wherever they want. They can also go home or stay in the spa or elsewhere in the hotel to wait for the next guest.

Not only are the therapists, including the respondent, free not to show up for work and take holiday whenever they want and for however long they want, but the therapists are also free to work somewhere else for pay.

Furthermore, according to the massage parlor, the following should be taken into account:

• Only if a hotel guest makes an appointment with the spa where the respondent is the treating therapist will the respondent show up. The massage parlor operates a computer program in which therapists, based on their own specified days and times, are assigned massage treatments. The number of hours a therapist works per day depends on the number of massages she gives that day.

• The massage is given by the therapist without any instruction from the massage parlor, but completely independently by the therapist.

• The remuneration received by the therapist depends on the number of massages she gives. The therapists receive as remuneration 30% of what is charged by the spa to the guest for the massage.

• If a therapist does not want to attend an appointment, she can ask another therapist to stand in for her or take over her treatment. Therapists are not obliged to attend work, but they are expected to cancel a massage treatment in time for another therapist to take over. A therapist can take days, weeks or months off work and does not need the consent of the massage parlor.

• Therapists may also offer their services outside the hotel.

• No taxes or premiums are levied on the payments received by the therapists.

• Unlike employees who are employed by the massage parlor, the therapists do not have to clock in or out. Again, they decide when they come to work and when they don’t.

Incidentally, the massage parlor had informed the therapists that they have the option of continuing to work for the massage parlor as a contractor, but then they have to provide an extract from the Chamber of Commerce of their sole proprietorship and their tax number, or that they join the massage parlor, but then they have to bear in mind that they will henceforth receive a net salary, be required to show up for work, and be allowed to take a maximum number of holidays. The choice is up to the therapists.

Of the five therapists working for the massage parlor, four expressed a preference for assignment status, with Chamber of Commerce registration and tax number. The respondent did not; she took the view that an employment contract exists between her and the respondent.

The Supreme Court considered on March 24, 2023, in the Dutch case Deliveroo v. FNV (ECLI:NL:HR:2023:443, NJ 2024/35), inter alia:

• Article 7:610 BW [it also applies to art. 7A:1613a of the Civil Code of Curacao] defines the employment contract as the contract by which one party, the employee, undertakes to perform work in the service of the other party, the employer, for pay for a certain period of time.

• In order to assess whether a contract should be classified as an employment contract, the rights and obligations agreed by the parties must be determined by interpretation using the Haviltex-criteria.

• If the agreed rights and obligations comply with the legal description of an employment contract, the contract must be qualified as such. For this qualification, it is not important whether the parties intended the agreement to fall under the statutory regime of the employment contract.

• Whether an agreement should be classified as an employment contract depends on all the circumstances of the case taken together. Relevant factors may include the nature and duration of the work, the manner in which the work and the working hours are determined, the embedding of the work and the person performing the work in the organization and the business operations of the person for whom the work is performed, whether or not there is an obligation to perform the work personally, the manner in which the contractual arrangement of the relationship of the parties has been established, the manner in which the remuneration is determined and how it is paid, the amount of such remuneration, and whether the person performing the work runs a commercial risk in doing so. It may also be relevant whether the person performing the work behaves or may behave as an entrepreneur in the course of business, for example in terms of acquiring a reputation, in terms of acquisition, in terms of tax treatment, and considering the number of clients for whom he works or has worked and the duration for which he usually commits himself to a particular client. (paragraph 3.2.5)

• The weight accorded to a contractual clause in answering the question of whether an agreement should be classified as an employment contract also depends on the extent to which that clause has actual significance for the party performing the work.

• (…) The Supreme Court therefore sees no reason for legal development on these issues at present.

• Freedom to choose whether or not to appear at work and whether or not to accept assignments does not in itself exclude the existence of an employment contract. Whether the requirements for a contract of employment are met depends on the further circumstances of the case, in particular what applies if the person concerned does appear and accepts an order to work, and the frequency with which and the duration for which this usually occurs. (…).

• Similarly, the freedom of substitution provided for in the contract is not in itself incompatible with the existence of an employment contract, and must be considered in the light of all the circumstances of the case. (…).

The circumstances enumerated by the Supreme Court in paragraph 3.2.5 that may be relevant, among others, were all discussed at the hearing, focusing on the present case. They are:

1. the nature and duration of the work.
2. the manner in which the work and working hours are determined.
3. the embedding of the work and of the person performing the work in the organization and management of the person for whom the work is performed.
4. the existence or absence of an obligation to perform the work personally.
5. the manner in which the contractual arrangement of the relationship between the parties was established.
6. the manner in which the remuneration is determined and paid.
7. the amount of the remuneration.
8. whether the person performing the work incurs a commercial risk in doing so.
9. it may also be of importance whether the person performing the work behaves or may behave as an entrepreneur in economic life, for instance when acquiring a reputation or during acquisition.

Re 1 (nature and duration of work)

This concerns work as a massage therapist in the spa of an all-inclusive beach resort. The respondent has been working there for eight years. The massage services offered are listed with the name ‘Sunscape spa pevonia’ on it for the benefit of guests. There are 11 massage treatments, ranging from 25 to 80 minutes. There are five massage therapists working at the spa, including the respondent.

Re 2 (the manner in which work and working hours are determined)

According to the massage parlor, the therapists working for it specify their preferred days, as well as the times, when they want to work. When scheduling hotel guests who want to take a massage, this is taken into account (as much as possible). The massage parlor uses a computer program. It is undisputed that the respondent is continuously present five days a week from 9-17 hours. It emerged at the hearing that when the hotel is busy, the therapists are put under a certain amount of pressure to be present all day.

Re 3 (the embedding of the work and of the person performing the work in the organization and business operations of the person for whom the work is performed)

The massages offered are accurately determined by the massage parlor in a list. The therapists are the performers. The massages are given exclusively in the hotel spa. The therapists wear a hotel uniform. The therapists, unlike employees who undoubtedly have an employment contract, do not have to clock in or out.

Re 4 (whether or not there is an obligation to perform the work personally)

If a therapist does not want to attend the appointment, she can ask another therapist to fill in for her or take over the treatment from her. However, the other therapist must be one of the five therapists hired by the massage parlor.

Re 5 (the manner in which the contractual arrangement of the relationship between the parties was established)

A written contract is missing.

Re 6 (the manner in which the remuneration was determined and paid)

The remuneration is determined by the massage parlor. The therapists receive as remuneration 30% of what is charged by the spa to the guest for the massage. What the therapist receives depends on the number of massages she gives.

Re 7 (the amount of the remuneration)

The massage parlor provided at the hearing a summary of what was paid monthly to the respondent in the period January 2023-August 2024. There were no deductions (payroll tax, contributions, etc.) from these. Holiday pay is not paid, and paid holidays are not given. 

Re 8 (the question of whether the person performing the work incurs a commercial risk in doing so)

According to the massage parlor, the therapist does not run a substantial risk, even in the off-season. In the off-season, recruitment is more active (on the beach).

Re 9 (of importance may also be whether the person who performs the work behaves or can behave as an entrepreneur in economic life, e.g. when acquiring a reputation or during acquisition)

According to massage parlor, the therapists may also work elsewhere for payment and offer their services outside the hotel. Whether this actually happens is uncertain. The respondent states that she does not do this. She states she is at the massage parlor continuously five days a week from 9am-17pm and has the care of three children.

Other relevant circumstances

These have not emerged.

Based on all these Deliveroo circumstances, considered together, the Court concludes that an employment contract exists. The present case is stronger than that of the Deliveroo meal delivery workers, who had more freedom. The circumstance under 2 indicates to some extent an assignment, but, as the Supreme Court considered in Deliveroo the freedom to appear or not to appear at work and to accept or not accept assignments does not in itself exclude the existence of an employment contract. Circumstance 5 is neutral. The other circumstances point more towards an employment contract, rather than an assignment. They carry more weight.

https://deeplink.rechtspraak.nl/uitspraak?id=ECLI:NL:OGHACMB:2024:206 (translated)

Picture: Kelly Sikkema on Unsplash