Research shows that when rejected, one in four applicants suspect they have been discriminated against.[1] To prevent labour market discrimination, the Supervision on Equal Opportunities in Recruitment and Selection Bill was adopted by the House of Representatives on 14 March 2023. Employers and intermediaries will be obliged to create safeguards to prevent discrimination in recruitment and selection. The law will enter into force after it is passed by the Senate, which is likely to be mid-2024.

Obligations of employers and intermediaries under proposed bill

Under current Dutch law, rules on equal treatment in the employment relationship, of course, already exist. These rules also already apply to recruitment and selection. The bill aims to supplement these existing rules by imposing further obligations on employers and intermediaries, and provides more enforcement powers for the Labour Inspectorate.[2]

To prevent discrimination in recruitment and selection, the bill contains several obligations for employers and intermediaries.

Adopting a working method

Employers and intermediaries must have a working method in place to prevent labour market discrimination. The working method must be recorded in writing,even though a few exceptions apply.[3] In addition, human resources personnel, among others, must be informed about the measures taken to prevent labour market discrimination.

The working method must show that the recruitment and selection procedure:

• is based on relevant job requirements;
• is transparent and verifiable; and
• is set up systematically

More concretely, the requirements can be met by making recruitment campaigns neutral to attributes such as gender and age and by using validated tests, references, recommendations and structured interviews. In addition, the initial selection can be based on objective job requirements. Decision-making can further be objectified by deciding with several people or by involving an independent third party.

Due diligence obligations

Even if the employer or intermediary uses another intermediary or an automated system (eg, Monster, Indeed or recruitment algorithms), the employer and intermediary remain responsible for preventing discrimination. Due diligence obligations still apply. The employer and intermediary must make sure that the other intermediary or automated system adopts a working method and doesn’t discriminate. They are often also required to keep a record showing that they have met their due diligence obligations.[4]

Reporting obligation for intermediaries

Finally, intermediaries are subject to an obligation to report any discriminatory requests made by clients when recruiting and hiring staff to the Labour Inspectorate (eg, a request assigning someone of a certain nationality or gender). Intermediaries must also have a procedure on how they deal with suspected discriminatory requests. That procedure should include entering a discussion with the party making the request and filing a report to the Labour Inspectorate if the discriminatory element of the request is not (sufficiently) removed.

Enforcement powers of Labour Inspectorate

When an employer or intermediary fails to comply with its obligations, the Labour Inspectorate will first give them a chance to comply with the obligations. If that opportunity is not taken, the Labour Inspectorate will impose a fine with the standard amount of €4,500. If a fine is imposed, this will be made public.

Scope of bill

The bill imposes various obligations on employers and intermediaries, such as employment agencies, job intermediaries and assessment agencies.

If passed, the bill would apply to certain cross-border situations also, as the regulation qualifies as mandatory law within the meaning of article 9 of the Rome I Regulation. The law would then apply to:

• foreign employers recruiting and selecting staff in the Netherlands;
• intermediaries providing recruitment services abroad on behalf of an employer or employee who resides in the Netherlands; and
• temp agencies that supply temp workers in the Netherlands.

For example, a Polish temp agency providing Polish temp agency workers in the Netherlands will fall under the scope of the act. Similarly, a United States-based company that conducts a pre-employment screening on an applicant who resides in the Netherlands must comply with the rules under the act.

Comment

The Netherlands already has equal treatment legislation applicable to recruitment. Based on that current legislation, a job applicant can file a complaint with the Netherlands Institute for Human Rights (NIHR), but if the complaint has been upheld, the applicant would have to initiate separate litigation to claim (eg, damages).[5] Thus, current legislation is primarily focused on giving individuals a forum for when they feel discriminated against to facilitate reactive action. In contrast, the bill has a wider scope, focussing on companies to prevent discrimination from any recruitment process. Even though the bill does not explicitly provide the possibility of filing a complaint with the Labour Inspectorate, such a complaint can in fact be filed (and may have consequences).

Following a complaint, the Labour Inspectorate may decide to launch an investigation into the recruitment process at the company concerned. Moreover, when investigating whether a company complied with the rules to prevent discrimination in recruitment, the Labour Inspectorate may take into account that a complaint lodged by an applicant was upheld by the NIHR. Conversely, in assessing an individual case, the NIHR can consider that a company failed to adopt a working method. The bill would thus not only supplement the current equal treatment legislation, but it would also complement it.

Finally, it is worth mentioning that the EU Gender Pay Gap Directive was recently adopted. Besides requirements on pay transparency, the directive also includes obligations for the employer to ensure a gender-neutral and non-discriminatory recruitment process. These requirements are in line with the framework that the bill aims to introduce, namely, the establishment of a working method that ensures that recruitment is carried out based on objective requirements.

This article was written for Lexology’s International Law Office newsletter.

Endnotes

[1] The Netherlands Institute for Social Research, Ervaren discriminatie in Nederland II, 2020.

[2] The Labour Inspectorate is a government agency that among others monitors compliance with legislation on working conditions.

[3] The obligation to record the working method in writing applies to employers with more than 25 employees and to all intermediaries (ie, regardless of the number of employees).

[4] The obligation to include the document in the administration applies to employers with more than 25 employees and to all intermediaries (ie, regardless of the number of employees).

[5] The NIHR is the independent human rights institute of the Netherlands.