Where penalty reports and the accompanying statements are unclear as to whether a violation was committed, businesses are given the benefit of the doubt since the minister bears the burden of proving the violation. That has been confirmed and applied in two decisions about the Foreign Nationals Employment Act (Wet arbeid vreemdelingen) rendered today by the Administrative Jurisdiction Division of the Dutch Council of State (‘Division’). Furthermore, and this is important to note: the Division largely subscribes to the opinion of State councillor Advocate-General Mr Keus.
Firstly, because these two decisions reflect the Division’s new approach to the Foreign Nationals Employment Act. For many years, case law of the Division was relentless: almost all forms of cross-border services seemed to be regarded as "improper" cross-border services and everyone who was in some way or another involved in a foreign national carrying out work seemed to be regarded as an employer. Reliance on the absence of imputable acts, for example because the employer was not even aware that the work was being carried for it, was also dismissed relentlessly. However, for more than two years now, we have been witnessing a change in case law, which has possibly been instigated by judgments of the Court of Justice of the European Union (Martin Meat for example). For more detailed information on this topic, see also our article Grensoverschrijdende dienstverlening onder de Wet arbeid vreemdelingen, TAP 2016/7, of which a follow-up will be published this year.
In addition, these judgments – like the opinion – should be read in the light of the – unrequested – advice given by the Advisory Division of the Council of State on 13 July 2015, which sought attention for legal protection in the case of administrative penalties. That advice clearly set out the differences between administrative and criminal penalty law, which are inexplicable in terms of, among other things, the application of rules of evidence. What constitutes questioning and when must rights be read? This decision explicitly takes criminal law as reference for multiple points, making it appear as though the Division endorses the points of criticism given in the advice.
In this advice, the Advisory Division also devoted extensive attention to the as yet relatively underdeveloped rules of evidence in the case of administrative penalties. Unfortunately, unlike civil law, the rules of evidence in administrative law are not laid down in a code of law. Moreover, until now, case law on the rules of evidence consisted mostly of general legal grounds and few specific premises. However, the legal practice as well as supervisory authorities and enforcement agencies need clear or clearer orientation points and firm positions. More than any other previous decision, this decision offers these firm positions about, among other things, the need for a signature under a statement and the evidential and other value that should be allocated to the various (contradictory) statements.
Lastly, this decision has of course long been anticipated by the parties themselves, since these two cases concerned high administrative penalties (Foreign Nationals Employment Act) that the Minister of Social Affairs and Employment imposed on two companies. Those companies appealed the matter before the District Court of Rotterdam, which held that the Minister was right to have imposed the penalties. The companies subsequently brought appeal proceedings before the Division, asserting that Social Affairs and Employment Inspectorate – in its role as supervisory authority – had failed to observe due care, which meant that certain articles of evidence had to be disregarded for the purposes of the Minister’s decision to impose a penalty. The Minister had furthermore allegedly failed to include exculpatory evidence in the penalty report, which should have been included. The two companies were of the opinion that owing to this, insufficient evidence of the violations remained, which meant that the Minister could not impose the penalties.
The Division set aside the contested decision, but – unfortunately – via a detour. According to established case law of the Division, the premise is that the administrative authority bears the burden of proving a violation and that, in the event of doubt, the party in question is given the benefit of the doubt. Based on all the arguments adduced, the Division held that sufficient doubt existed regarding the question of whether the relocation of the foreign nationals was the principal goal of the services (and that therefore the requirements of the Vicoplus judgment of the Court of Appeal – that the case involved improper services – were satisfied), that the conclusion was that the Minister failed to prove any violation of the Foreign Nationals Employment Act. It is interesting to keep monitoring how the Division will apply the Advocate General’s opinion in other administrative law penalty cases (for example with regard to the Netherlands Authority for Consumer and Markets (ACM) or the Netherlands Authority for the Financial Markets (AFM)). In any case, these decisions offer a welcome addition to the underdeveloped rules of evidence in punitive administrative law.
• Decision 1: Administrative Jurisdiction Division of the Council of State dated 5 July 2017 (ECLI:NL:RVS:2017:1818)
• Decision 2: Administrative Jurisdiction Division of the Council of State dated 5 July 2017 (ECLI:NL:RVS:2017:1819)
• Press release of the Administrative Jurisdiction Division of the Council of State (available in Dutch)
• Opinion of State councillor Advocate-General mr. L.A.D. Keus dated 12 April 2017 (ECLI:NL:RVS:2017:1034)