Invoking a Ban on Ancillary Activities is Objectively Justified

A municipality was allowed to prohibit an employee with a coordinating role in executing work relating to the municipality’s trees and other greenery from carrying out any ancillary activities relating to pruning and maintenance of greenery within the boundaries of the municipality.

In addition to his work for the municipality, a municipality employee also commercially carried out work relating to pruning and greenery maintenance for companies and private persons, In his work for the municipality, the employee had a coordinating role in carrying out work as an arborist and work relating to other greenery. This work entailed his frequent physical availability during the execution of projects and contacts with customers, contractors and residents.
In 2020, his original appointment as a civil servant had been converted into an employment contract, due to a change in the law.
In 2017, the municipality had given written permission for his ancillary activities for a period of two years under the condition that the employee would no longer work full-time, but only 32 hours per week, so as to prevent an excessive burden. Furthermore, the employee would have to phase out four maintenance contracts within the municipality within one year, and he would no longer be allowed to enter into any new maintenance contract to be carried out within the municipal boundaries. After the two-year period had expired, the municipality had confirmed that the permission had expired as of 1 January 2020.
In 2021, the municipality had adopted a code of conduct which obliged the employee to ask permission for ancillary activities if these ancillary activities would jeopardize proper fulfilment of the tasks for the municipality or if the ancillary activities might affect the municipality’s interests. Until 2022, a ban on ancillary activities applied under the Civil Servants Law.
In 2022, the municipality granted the employee a new permission for ancillary activities regarding trees and gardens for a period of one year for eight hours per week, be it this time under the condition that the work would exclusively be carried out for clients who had no relationship with the municipality and that the work would be carried out outside the municipal boundaries only. The employee could not accept the condition that the work should be carried out outside the municipal boundaries. He pointed out that his work as a supervisor at the municipality and his ancillary activities were quite different, that he was not involved in the municipality’s orders procurement procedures and that he had performed the ancillary activities for thirty years without this had ever given rise to any problems.
When the dispute was submitted to the Sub-district Court, the employee lost the case. However, the employee didn’t accept the ruling and, on appeal, the Court of Appeal had to rule on the case.
As of 1 August 2022, a statutory provision had entered into force under which a ban on ancillary activities shall be null and void if there is no objective reason for the ban. This statutory provision is based on a European Directive.
The Court assessed whether there was an objective reason. First and foremost, the Court pointed out that, in both the European Directive and in the establishment of the Dutch statutory provision, the integrity of public services is mentioned as an example of an objective reason. The municipality relies on the integrity of public services as an objective justification. According to the municipality, any semblance of a conflict of interest must be avoided.
The Court stated that a stricter integrity requirement applies to employees in the public sector. The mere semblance of a conflict of interest may undermine confidence in the public sector. Third parties may get the impression that it is easier for the employee to obtain contracts for his company than it is for competitor entrepreneurs because of his work for and his connections with the municipality. For this reason, according to the Court of Appeal, there was an objective reason for the ban on ancillary activities.
Another consideration for the Court was that, due to changes in society, agencies established by governments under private law with a public service mission have come under serious scrutiny.
The Court also assessed whether the ban was a necessary, suitable and appropriate means to protect the interests of the municipality.
This was the case, because the ban only applied within the -relatively small- municipality’s boundaries. Therefore, the ban on ancillary activities was maintained.

Since 1 August 2022, a ban on ancillary activities can only be invoked by the employer if there is an objective reason to do so. Ehen the law was created, the following reasons were given as examples of objective reasons:
• health and safety;
• protection of the confidentiality of company information;
• the integrity of public services;
• avoiding conflicts of interest.