In a recent judgment the Dutch Council of State has ruled that Japanese nationals do not require work authorisation (a work permit) in order to perform work activities in the Netherlands due to an applicable treaty between countries that dates back from the early 1900s.
Most favored nation doctrine
The 1912 Treaty of Commerce and Navigation between the Netherlands and Japan stipulates that nationals of both countries have full liberty to enter all parts of each other’s territories, together with their families, and to dwell therein provided that they conform to the laws of the respective country. In all matters concerning travel and residence, study and investigations, the exercise of trade and profession and the carrying on of their industrial and manufacturing enterprises, these nationals are to be placed upon he same footing as the nationals or citizens of the most favored nation (“MFN”).
The MFN doctrine implies that Japanese nationals have the right to live and work in The Netherlands under the same conditions as nationals of the nation that has entered into the most favourable arrangements with the Netherlands.
The 1875 Treaty of Friendship, Establishment and Commerce between the Netherlands and Switzerland stipulates that nationals of both countries should be considered equal concerning – among others – stay and residence and the exercise of trade, industry and profession in the respective countries. As a result, Swiss nationals (similar to Dutch nationals), in principle do not require a work and/or residence permit to reside and work in The Netherlands.
Penalty Order Social Affairs and Employment Inspectorate
In 2013 the Dutch Social Affairs and Employment Inspectorate (the Dutch Labour Inspectorate) imposed penalties – for the total amount of EUR 60,000 – on a Dutch company for having three Japanese nationals perform construction activities on a Japanese teahouse in The Netherlands, in (alleged) breach of the Foreign Nationals (Employment) Act. In principle, these work activities performed by non EU nationals are subject to a work permit requirement. During an audit the Inspectorate found that no work permits had been applied for and/or granted by the Dutch work permit authorities (“UWV”).
Ruling Council of State
The Council of State ruled that the applicable MFN doctrine between The Netherlands and Japan implies that Japanese nationals can perform work activities in the Netherlands, without the need for a work permit, similar to Swiss nationals (i.e. nationals of the ‘most favoured nation’). One of the main topics of debate was whether equal rights for Dutch and Swiss nationals considering the exercise of trade, industry and profession also extends to ‘paid employment’. With reference to other case law, the Council of State ruled in favour of this wide interpretation. Furthermore, the Council of State found that work permit conditions between the Netherlands and Switzerland have been abolished, in any event, since November 27th 2001 (the date on which both countries reached additional agreement).
Consequently, Japanese nationals are not – or in any event, no longer – subject to work permit conditions in the Netherlands either. The penalties imposed on the Dutch company were annulled.
