CMS Expert Guide on discrimination in the workplace in the Netherlands

Discrimination in the workplace is regulated under different types of Dutch legislation, with the Constitution (Artikel 1 Grondwet) as its main basis. Article 1 of the Constitution states that every person residing in the Netherlands should be treated equally, implying that every employee working in the Netherlands should be treated in the same way as his/her colleagues. This main rule is further developed in specific legislation. First of all, the Algemene wet gelijke behandeling (AWGB) contains a general ban on unequal treatment on the grounds of sex, marital status, religion, belief, political affiliation, race, nationality  or sexual orientation. Different specific rules on discrimination regarding the employment relationship are contained in:

•  Article 7:646 Burgerlijk Wetboek (BW): employers are prohibited from distinguishing between men and women in the employment contract, in the issuing of instructions to the employee, in the terms of employment or in the promotion and termination of the contract. This prohibition is developed in more detail in the Wet gelijke behandeling van mannen en vrouwen (WGBM/V). 
• Articles 7:648 and 7:649 BW: ban unequal treatment of part-time employees as opposed to full-time employees and workers with fixed-term contracts as opposed to permanent workers. Finally, the Wet gelijke behandeling op grond van handicap of chronische ziekte (WGBH/CZ) and the Wet gelijke behandeling op grond van leeftijd bij de arbeid (WGBL) prohibit discrimination of disabled employees and discrimination on the grounds of age. See Paragraph 2 for a more detailed overview of the content of these laws. 

The ban on discrimination on the basis of sex, marital status, religion, belief, political affiliation, race, nationality and sexual orientation (in the AWGB and the WGBM/V), discrimination of fixed-term workers and part-time workers, age discrimination (WGBL) and discrimination of disabled employees (WGBH/CZ) covers both direct and indirect discrimination. However, differences can be found in the possibility to justify such forms of discrimination based on objective reasons. Unequal treatment on the grounds of age, fixed-term contracts and part-time contracts can be objectively justified by a legitimate purpose achieved by appropriate and necessary means, regardless whether it concerns direct or indirect discrimination. 

However, that is not the case with discrimination based on a more personal attribute of the employee in question, such as sex, religion, disability, etc. These prohibitions only allow objective justification in situations of indirect discrimination. Situations of direct discrimination on the other hand – in principle – can never be justified.

• Article 1 AWGB: Religion, belief, political affiliation, race, gender, nationality, sexual orientation or marital status. 
• Article 7:646 BW and Article 1 WGBM/V: Gender/sex.
• Article 1 WGBH/CZ: Disability and illness. 
• Article 1 WGBL: Age. 
• Article 7:648(1) and Article 7:649(1) BW: Part-time contracts and fixed-term contracts.

These prohibitions are applicable to all forms of labour, including internships, temporary employment agency work and platform workers, provided that there is a relationship of authority between the provider of employment and the worker.
Moreover, although some of the discrimination grounds listed above contain a broad scope with respect to the employment relationship, Articles 7:648 and 7:649 BW are explicitly restricted to employees and employers. Specifically, Article 8 and 8a Wet Allocatie Arbeidskrachten door Intermediairs (WAADI) provides an additional discrimination ground for temporary agency workers and payroll workers.

Individuals faced with a discriminatory employment contract or collective agreement on grounds of gender or on the grounds of doing fixed-term/part-time work have the right to invoke nullity of that discriminatory provision. Secondly, an employee whose employment relationship is terminated in violation of the discrimination prohibitions can invoke annulment of the dismissal or request monetary compensation according to Article 7:681 BW. Lastly, an individual subject to discrimination in the workplace can go to court to claim damages as a result of a wrongful act (Article 6:162 BW) and can also file a complaint at the College voor de Rechten van de Mens. Although a judge is not bound by the ruling of the College voor de Rechten van de Mens, it can provide a stepping stone in proving the alleged discrimination and the magnitude of the damages inflicted.
To determine whether an individual confronted with discrimination in the workplace is awarded monetary compensation and the amount that can be claimed, a differentiation has to be made between 1) monetary compensation for a dismissed employee as an alternative to the annulment of the termination; and 2) monetary compensation for damages inflicted by the discrimination as a wrongful act:

1. If the individual opts for monetary compensation as an alternative to annulment of the termination in the sense of Article 7:681 BW, the level of compensation is calculated according to the case New Hairstyle-beschikking. In this case, the Dutch Hoge Raad (Supreme Court) stated that compensation in line with  Article 7:681 BW must compensate for the employers' culpability/blame for the dismissal – discriminatory behavior or actions – and that the amount is assessed on the basis of all the circumstances of the case. This includes the consequences of the dismissal for the employee, his lost remuneration, but also the amount of transition allowance or other forms of income the employee is entitled to. Dutch courts therefore have an enormous margin of discretion to assess the amount of compensation an individual employee is granted, which amounts to much uncertainty on the part of employers, employees and lawyers.
2. The second ground on which an individual can claim monetary compensation is Article 6:162 BW: a wrongful-act claim. In these situations, the court has the right to estimate the amount of damages in those cases where it is plausible that damage is suffered as a result of the wrongful act. For all discrimination legislation, Dutch law provides for a shift of the burden of proof in favour of the person confronted with discrimination. Therefore, as long as the individual can provide facts that suggest (or arouse suspicion of) discrimination, the presence of discrimination is assumed unless the employer can prove otherwise. This argument means that Dutch courts have a broad margin of discretion to assess the amount of compensation when an individual claims damages on the grounds of a wrongful act.

According to Article 3(2) of the Arbeidsomstandighedenwet, an employer is obligated to implement a policy aimed at preventing and, if that is not possible, limiting so-called psycho-social burdens (including discrimination) in employment situations. This responsibility is further specified in Article 2.15 Arbeidsomstandighedenbesluit, which poses an obligation on employers to make an overview of these risks in a so-called Risk Inventory and Evaluation (Risico inventarisatie- en evaluatie, or RI&E). In addition, a Plan of Action (plan van aanpak) must be made, including measures to prevent discrimination at work. The staff must then be informed about the risks and the measures that the company has taken and the employer must verifiably carry out all these actions.

A policy on diversity and inclusivity is – in principle – not a legal requirement for private companies situated in the Netherlands. However, all Dutch ministries and certain public organisations have signed the Charter Diversiteit (Charter on Diversity). As a result, the signing parties commit (as employers) to promote effective diversity policies, such as retaining employees with a non-western migration background and preventing prejudices.

Diversity and inclusivity are – especially in the zeitgeist of today – two of the most important terms in public debates. Therefore, focusing on diversity and inclusivity in the workplace could contribute to the image of companies, but also – in the sense of ESG – to its (economic) business objectives. There are, however, no direct legal risks when such a policy is not in place at an employer. Indirectly not having such a policy could be risky in the sense that Article 3 of the Arbeidsomstandighedenwet states that an employer has to ensure the safety and health of employees on all aspects related to work and is obligated to implement a policy aimed at the best possible working conditions. A D&I Policy could as a matter of fact help provide for the best working conditions.

While the current law on equality of pay (Wet gelijke behandeling mannen en vrouwen) prohibits unequal pay between different genders, there are no requirements for transparency or reporting  of such differences. 
However, the Dutch government is preparing a new law under which the reporting of rewarding women with equal pay for equal work will be laid down. Supervision is provided by the Inspectie Sociale Zaken en Wergelegenheid. If an employer fails to comply with these regulations, the Inspectie may, in extreme cases, impose a fine of the fifth category (which could be as high as EUR 90,000 with the possibility of increasing the fine in the event of repeat offences).

Diversity data is often personal data that qualifies as special categories of personal data under Article 9 of the EU's General Data Protection Regulation (GDPR). This includes information regarding racial or ethnic origin, political opinions, religious or philosophical beliefs, trade union membership, genetic data, biometric data for the purpose of uniquely identifying a person, data concerning health, or data relating to a person's sexual behaviour or orientation. According to Article 9 of the GDPR a general prohibition applies to the processing of this personal data given its sensitive nature and the risks that the data subjects are exposed to should this data be processed. There are exceptions to this general prohibition laid down in Article 9 of the GDPR (in Dutch, the Algemene verordening gegevensbescherming or AVG) and the GDPR Implementation legislation (in Dutch: UAVG).
The most common exception is requesting that the data subject consents to the processing of the special categories of personal data. However, obtaining consent from employees is considered highly problematic under the GDPR due to the presumed imbalance of power between the employer and the employee, implying that consent will most likely not qualify as freely given (causing it to be invalid under the GDPR). 
Other exceptions to the prohibition of Article 9 of the GDPR are also included in the Implementation Act of the GDPR. Article 25 of the Implementation Act of the GDPR stipulates that ethnic data can be processed with the purpose of conferring a preferential position on persons of a certain ethnic or cultural minority group in order to eliminate or reduce the actual disadvantages connected with race or ethnicity, and only in so far as: 

• The processing is necessary;
• The data relates to the country of birth of the data subject, the data subject’s parents, or other criteria upon which can objectively be determined whether a person belongs to a certain ethnic or cultural minority group; 
• The data subject has not objected to the processing in writing.  

We also refer to the Barometer Cultural Diversity that is set up by Statistics Netherlands (in Dutch: Centraal Plan Bureau) of the Dutch government, based on which larger companies (more than 250 employees) can submit a request to receive insight (i.e. statistics) in the cultural diversity of their workforce without processing special categories of personal data. In the Netherlands, this is a more common and accepted method to investigate cultural diversity in the workplace. 
Note that if special categories of personal data are processed without a valid legal basis under the GDPR, enforcement could be triggered, such as a regulatory fine up to EUR 20 million or 4% of the annual turnover – whichever is higher. 

Until 2022, there was only one legal basis to enforce quotas at board level for companies based in the Netherlands. Articles 2:166 (for naamloze vennootschappen) and 2:276 BW (for besloten vennootschappen) state that both the supervisory board and the board of directors should include at least 30% male and 30% female members. However, this rule is not as strict as it seems since Article 2:291(7) BW states that in the event that these boards do not consist of an equal amount of male and female members, the company has to explain in its annual report (jaarverslag): a) why there is an inequality in the allocation of board seats; b) how the company has sought to achieve a balanced allocation of seats; and c) how the company intends to achieve a more equal allocation of seats in the future.
In addition, the Dutch legislator adopted a new law in January 2022 titled Wet ingroeiquotum en streefcijfers, which aims to balance the ratio of women to men in board rooms. This law consists of three main obligations for companies situated in the Netherlands:

1. The first obligation entails the ‘hiring quota’ (ingroeiquotum), which states that the seats of supervisory boards of Dutch listed companies should be equally divided between men and women. Equality in the sense of this obligation consists of boards made up of one-third male and one-third female members. Moreover, the consequences of violating this rule are that the appointment of a newly appointed supervisor, who does not contribute to this quota, will be declared void and the allocated chair will remain empty until a member of the ‘right’ gender is appointed.
2. The second obligation – targets and action plans (streefcijfers en plannen van aanpak) – applies only to ‘large’ companies (structuurvennootschappen), requiring them to formulate their own appropriate and ambitious targets for the male/female ratio of the board of directors, the supervisory board and the higher management. Whenever these targets are reached, the boards should reassess the situation and set new more ambitious targets, in a constant effort to achieve more and more equality in the workplace.
3. The third rule also applies only to ‘large’ companies and entails the obligation of transparent reporting (rapportage en transparantie), stating that annually and within 10 months after the end of the previous fiscal year, the company must report on 1) the ratio of men to women seated in the different boards; 2) the objectives and the targets formulated to comply to the second obligation; 3) the action plans for achieving these targets; and 4) the reasons for any failure to achieve one or more of the targets of the previous fiscal year. These reports are sent to the Socio-Economic Council (SER), that officially reveals the data to the public.

The Dutch Corporate Governance Code contains two provisions concerning diversity and inclusivity in the workplace:

1. The first provision – Best Practice Clause 2.1.5 – states that the supervisory board draws up a diversity policy for the organisation of the executive board, the supervisory board and, if present, the executive committee. This policy should include goals on diversity, such as nationality, age, gender and background on education and professional experience.
2. The second corporate governance rule is the best practice Clause 2.1.6, stating that the corporate governance declaration of Dutch listed companies should include: 1) the general goals of its diversity policy; 2) the way this policy was brought into action; and 3) the results of the previous fiscal year. Moreover, if the results deviate from the listed goals, the declaration should also mention the current state of affairs, what measures will be taken to achieve the desired situation, and in what time frame the goals can be reached.