Always include a clause regarding secondary employment in the employment contract

You may still include a clause regarding secondary employment in the employment contract, but since August 1, 2022, a prohibition on secondary employment is only valid if you have an objective justification for it. Since the introduction of Article 7:653a of the Dutch Civil Code (Transparent and Predictable Employment Conditions Act), a general prohibition without substantiation is void. For you as an employer, this means that the clause is still useful, but you must be able to explain why you are prohibiting a secondary activity on a case-by-case basis. Below, you can read what this entails in concrete terms and how to draft a watertight clause.

What is an ancillary activities clause?

An ancillary activities clause is a provision in the employment contract that regulates the conditions under which an employee may perform paid or unpaid work for another party in addition to their employment with you. Examples include a second job, freelance work, running their own business, or regular volunteer work.

In principle, employees have the right to free choice of employment; this fundamental right is enshrined in the Constitution. Nevertheless, secondary activities can affect your interests. A fatigued employee performs less well, and as an employer, you are jointly responsible for total working and rest times under the Working Hours Act. Furthermore, a secondary activity can harm your business interests or confidential information. A secondary activities clause provides you with a tool to manage these risks.

The clause may, for example, contain a reporting or consent obligation, an overview of excluded activities, or a maximum on ancillary hours. Importantly, since 2022, a prohibition is no longer automatically enforceable (see below).

What changed on August 1, 2022?

On August 1, 2022, the Transparent and Predictable Employment Conditions Act into force, containing the new Article 7:653a of the Dutch Civil Code. The core principle: a clause prohibiting or restricting an employee from working for another person outside working hours is void, unless there is an objective justification for that prohibition.

Two matters are important in this regard for practice:

• Immediate effect. The rule also applies to employment contracts that were already concluded before August 1, 2022; there is no transitional law. An old, generally formulated prohibition without objective grounds can therefore be void outright.
• The grounds do not need to be stated in the contract beforehand. You may also demonstrate objective justification at the moment you actually invoke the clause. Nevertheless, it is advisable to clearly state the possible grounds in the clause in advance, as this creates clarity and prevents disputes.

Please note: a requirement for consent or notification regarding ancillary activities remains permitted in principle. The law focuses primarily on unconditionally prohibiting or restricting work for another person.

Moreover, bear in mind that the law disadvantage : in principle, you may not disadvantage an employee because he invokes his rights regarding secondary employment. A sanction that effectively amounts to a punishment for exercising that right can therefore be legally problematic.

What is an objective ground for justification?

The law does not provide an exhaustive list, but the underlying European directive mentions a number of examples of grounds that may justify a prohibition:

• the health and safety of the employee (for example, exceeding the Working Hours Act);
• the protection of confidential business information;
• the integrity of government services;
• avoiding conflicts of interest.

This list is not exhaustive: other compelling business interests may also suffice, provided you can substantiate them concretely. A general or vague reference to “the business interest” is generally insufficient. The justification is assessed on a case-by-case basis, whereby the judge weighs the interests of your business interest against the employee’s interest in the secondary activity.

Practical example

Suppose a full-time warehouse employee takes on a delivery job in the evenings. Due to the accumulated hours, he consistently exceeds the limits of the Working Hours Act, and you report an increase in errors and fatigue in the workplace. In that case, you can substantiate your reliance on the clause with health and safety. If, on the other hand, you prohibit the same employee from running their own webshop on weekends that has nothing to do with your company, an objective basis is much harder to substantiate, and a prohibition is likely to be void.

What is the difference compared to a non-compete clause?

The ancillary activities clause and the non-compete clause are often confused, but differ on two points:

• Period. The secondary employment clause protects you during employment. A non-compete clause, on the other hand, takes effect after the termination of the employment contract.
• Scope. In principle, a clause regarding ancillary activities can also affect non-competing activities (such as a burdensome second job), whereas a non-compete clause focuses on competing activities.

In practice, both clauses complement each other. A well-drafted employment contract often contains both, alongside, for example, a confidentiality clause and a non-solicitation clause. Would you like to know how to align these clauses? Our legal experts will draft a comprehensive employment agreement for you.

Does the clause always have to be included in the employment contract?

Usually, the clause regarding secondary employment is included directly in the employment contract. That is clear: by agreeing to the contract, the employee also accepts this clause. However, it can also be done differently:

• Agreed upon later. The clause can also be established at a later stage, for example if it becomes apparent that the work is suffering. This is then done in a supplementary, signed agreement that is attached to the contract.
• Via the collective labour agreement. Some industry-wide collective labour agreements already contain provisions regarding ancillary activities. Since 2022, these must also comply with the requirements of Article 7:653a of the Dutch Civil Code.

Regardless of the form, the following applies: a prohibition is only enforceable if there is an objective ground for justification.

What do you include in a clause regarding secondary employment?

A good clause is concrete and aligns with your business situation. Consider the following elements:

1. Notification or consent requirement. Requires the employee to report secondary activities in advance or to request permission. This remains permitted and provides you with an overview.
2. Possible grounds for justification. State the interests you wish to protect (safety, confidential information, conflicts of interest), so that the basis for a potential prohibition is clear.
3. Permitted and excluded activities. Where possible, specify which activities are permitted without objection and which result in a conflict.
4. Enforcement. Consider warning procedures or, with due caution, a penalty clause. Always assess penalty clauses against statutory requirements.
5. Duration and scope. Limit the clause to what is necessary; an overly broad clause is more likely to be void.

Step-by-step plan: check or include existing clause

Do you want to be sure your clause holds? Follow these steps:

1. Review your contracts. Which employment contracts contain a clause regarding secondary employment, and when were they concluded?
2. Assess the wording. Does it contain a general prohibition without substantiation? If so, the clause is likely void and due for replacement.
3. Link the clause to concrete interests. Specify for each position which grounds for justification are realistic (consider working hours, confidential data, or conflicts of interest).
4. Add a notification or consent requirement. This way, you keep track of ancillary activities without immediately resorting to a ban.
5. Record changes in writing. If you amend an existing contract, have the employee sign the addendum.

What are the risks of an outdated or overly broad clause?

If you still have an old employment contract containing a general prohibition on secondary employment, there is a good chance that this clause has since become void. If you rely on this and the employee takes the matter to court, you may be unsuccessful. This entails risks:

• You cannot stop an unwanted side activity;
• you run the risk of a fine or claim for damages if you have wrongfully restricted the employee;
• an invalid penalty clause can weaken the entire agreement;
• An unjustified sanction (such as suspension or dismissal) can lead to a wage claim or reinstatement of the employment contract.

It is therefore worthwhile to have existing contracts checked and updated where necessary.

Frequently asked questions about the ancillary activities clause

Can an employer simply prohibit secondary employment?

No. Since August 1, 2022, a ban is only valid if you have an objective justification for it. Without such a ground, the ban is void.

Must the ground for justification be stated in the employment contract?

No, that is not mandatory. You may also demonstrate the grounds at the moment you invoke the clause. However, stating it in advance creates clarity and prevents disputes.

Does the new rule also apply to old contracts?

Yes. Article 7:653a of the Dutch Civil Code has immediate effect and provides for no transitional law. Clauses in contracts dated prior to August 1, 2022, also fall under the new requirements.

Am I allowed to require an employee to report secondary employment?

A notification or consent requirement is permitted in principle, even without objective grounds. The law focuses primarily on unconditionally prohibiting or restricting work for another.

Am I allowed to disadvantage an employee because he performs secondary work or invokes his rights?

No. The law provides for a prohibition against disadvantage: in principle, you may not disadvantage an employee because he exercises his rights regarding secondary employment. A sanction can only be imposed if you can demonstrate a valid, objectively justified prohibition.

What is the difference compared to a non-compete clause?

A clause regarding secondary employment protects you during employment and can also cover non-competing activities. A non-compete clause takes effect after the termination of the employment contract and relates to competing activities.

May an employee perform secondary activities during illness?

Activities that impede recovery or indicate that the employee is capable of more than indicated can be problematic. Assessment depends heavily on the situation and the advice of the company doctor; in such cases, seek legal advice before taking any measures.

Does the clause also apply to on-call workers and part-timers?

Yes. Article 7:653a of the Dutch Civil Code makes no distinction based on contract form or scope of work. Even with on-call and part-time contracts, a prohibition is only valid with an objective justification.

Need help with your employment contract?

A clause regarding secondary employment that meets the requirements of 2022 requires a tailored approach. Our employment draft a watertight employment contract, review existing clauses, and work with you to determine the appropriate grounds for justification. This helps you avoid void clauses and unnecessary disputes.

Would you like to have your employment contracts reviewed or a new clause drafted? Schedule a no-obligation intake or view our legal assistance options . We are happy to help you.