Appearance of independence and management companies
A ruling by the Labour Court of Ghent dated 20 February 2014 forms interesting reading about a dispute between a Managing Director of a management company and its clients.
It concerned a consultancy agreement whereby the Managing Director of the management company was hired by two companies to support them in the development of new sports infrastructure operations, which also required lobbying at local governments.
After several years of collaboration, the parties ended up in a dispute. The consultant believed that the termination scheme he was offered was insufficient, and argued that he had, in fact, always acted as a sales representative and was entitled to a termination fee and goodwill. In the ruling, the Labour Court applied the Labour Relations Act of 2006, whereby it valued the status chosen by the parties at the start of their collaboration as the most essential factor.
In this case it appeared to be manifestly clear that the self-employed status was not at all forced upon the consultant, quite the contrary. And during the collaboration, the consultant dutifully prepared his invoices. Additional elements, such as the fact that the consultant used the email address of his clients, their business cards, and was part of their organisational chart, were rejected by the Labour Court as being of too little importance.
Without going into too much detail, one can read between the lines of this verdict that a consultant should not be encouraged to participate in status shopping when the social and tax status he has used for years are suddenly no longer convenient. In this sense, the verdict can only be encouraged.
(Labour Court Ghent, 20 February 2014, TGR-TWVR, 2014, issue 3, 231)