Performance Improvement Plan: 5 key points to consider

Termination of the employment agreement due to unsatisfactory performance is possible under Dutch employment law. You can only be dismissed for unsatisfactory performance if your employer has given you sufficient opportunity to improve your performance. This is also known as a Performance Improvement Plan (“PIP”).

Below are 5 key points you need to know before starting a PIP.

Are you obliged to cooperate with a PIP?

In general, yes. An employer has the right to assess the performance of employees and provide instructions on how to do develop and improve. That being said, the employer must be able to demonstrate that improvement is required. Usually, one or more negative performance evaluations precede the start of a process of improvement.

What exactly does a PIP look like?

The law does not describe what a good improvement plan should look like, but from the many rulings of judges on this point, you can say that a proper PIP meets the following requirements:

    • The PIP must be in writing and so must the interim evaluations;
    • It must contain concrete and measurable improvement areas;
    • The improvement areas must also be realistic and achievable;
    • The employer should actively support the employee during the PIP. What this support entails varies from case to case and may consist of ‘training on the job’ but also of offering training or a course. Involving a coach or mentor is also not unusual;
    • The PIP should be evaluated periodically in between. It is then discussed what went well or not (yet) well in the past period.

What is the duration of a PIP?

The law does not specify what the duration of a PIP should be. In case law, improvement processes of 3 months to 1 year are considered acceptable. The important thing is that the PIP is at least long enough to allow the employee to actually improve.

The following factors play a role in the length of a PIP:

  • The content and level of the position;
  • The employee’s level of education;
  • The nature and degree of the underperformance;
  • The duration of the employment;
  • Previous efforts made to improve performance;
  • The extent to which the employee is open to criticism and willing to engage during the PIP.

What can you do if you disagree with the progress of the PIP?

Record this, for example with an e-mail message. Let your employer know in the interim that you do not agree with the way the PIP is going and why.

Can you be dismissed if the PIP is not successfully completed?

This is indeed possible. However, it must then be clear that your employer has given you a realistic and serious chance to improve. You can also expect that your employer has offered the necessary support to make the improvement process a success. Moreover, your employer is obliged to investigate whether you can be redeployed to another suitable position within the company.

More information

Do you want more information about a Performance Improvement Plan? Or do you have any other legal question? Then please contact us directly. Our expert are happy to help you.

Changes in Dutch employment law

A lot changed in Dutch employment law in January 2015. There was a new law that had major implications for employment contracts. Since then, there have been a number of changes again. Since 1 January 2020, a number of new rules apply.

Changes in employment law

  • Obligation of notification of termination. One month before the termination of a definite contract of 6 months or longer, an employer must notify the employee whether the employment agreement will be extended. If the employer does not notify the employee, he has the right to claim salary during the period in which the employer is too late. He can claim up to a maximum of one month’s salary.
  •  Prohibition of a trial period in fixed term contracts of 6 months or less. This prohibition is applicable to contracts that commence after January 1st 2015;
  • Prohibition of a non-competition clause in fixed term contracts (unless the contract specifies the necessity of such a clause in light of severe company interests). Applicable to all contracts that are entered into after January 1st 2015;
  •  The stipulation, “no labour, no salary”: an employee is not entitled to salary when not performing activities, has changed. The new rule is “no labour, still salary, unless the non-performance is seen as at the risk of the employee”. This change  secures a deviation of the burden of proof in favour of the employee. It is still possible to exclude applicability of this clause for the first 6 months of the contract. However, the exclusion can no longer be extended indefinitely by collective labour agreement.

New rules

The old regulation (which applied from January 1st 2015) stipulated that an organisation could offer employees 3 fixed term contracts  and/or for a maximum period of 2 years. For employment contracts that ended on or after 1 January 2020, a new chain rule applies. An employment agreement for an indefinite period is established when:

  • a maximum of three contracts is exceeded;
  • the maximum time frame of 3 years is exceeded;
  • and in both of the abovementioned situations there is a period of no more than 6 months and 1 day in between two following contracts.

To summarize : the amount of temporary contracts remains the same. However, the period that those contracts comprise, cannot be more than 3 years. Furthermore, the employer needs a “time-out” of at least 6 months and 1 day to cancel the chain. For example, as of July 1st 2015 it is possible to get a fixed contract of 6 months which is then extended with another 6 months, to end with a contract of 1 year. A chain of consecutive 1-year-contracts will however result in an agreement for an indefinite period after 3 contracts ( and/or  after 3 years).

 

Termination of employment agreement

There are various routes for termination of employment agreements, depending on the cause of termination. Termination based on extensive incapability or economic reasons, must be executed through UWV. Termination based on “personal” reasons, like malfunctioning, disturbed relationship, must be addressed by the Cantonal Judge. Please note this change has left the possibility of an amicable settlement unaffected.

Also, as of 2015, the employer does not need consent of UWV or the Cantonal Judge in order to terminate the employment agreement once the employee has reached the AOW eligible age.

Irrespective of the termination-route (UWV of Cantonal Judge) the employer has to pay a “transition compensation” (transitievergoeding). This compensation replaces the severance payment (ontslagvergoeding) and is calculated differently.

The transition compensation is calculated as follows: You will receive 1/3 monthly salary per whole year of service from your first day of employment. The transition compensation over the remaining part of the employment contract is calculated according to the formula: (gross salary received over remaining part of employment contract / gross monthly salary) x (1/3 gross monthly salary /12 ).  In 2023, in total a maximum of € 89.000,- applies, unless the employee’s yearly salary exceeds that amount (in which case this higher amount counts as maximum).

Rules transition compensation explained

The transition compensation is not due in case of severe fault of the employee. For example in case of termination due to an urgent cause. Temporary employees are also eligible for the transition compensation.  Since 1 January 2020, an employee can receive a transition allowance from the first working day.

  • In case of severe culpability of the employer, a Judge may grant the employee an additional “reasonable” compensation;
  • Given the above, the sub-district Judge formula no longer applies in procedures that are entered into after July 1st 2015. In negotiations on amicable terminations, the transition and possible additional compensation are leading;
  •  The procedure of “manifestly unreasonable dismissal” no longer exists;
  • In case of amicable termination (mutual consent, settlement agreement), a reconsideration period of 14 days has been introduced on behalf of the employee. Within those 14 days, the employee may withdraw his consent. Which leads to continuation of the employment agreement or reopens negotiations. The withdrawal of the consent has to be in writing. The employer is obliged to inform the employee about that possibility. The deadline is three weeks if the employer has not explicitly referred to this option of dissolution in the settlement agreement;
  • Obligation to provide education. This stipulation is especially of importance in cases concerning malfunctioning.
  • All termination decisions (Cantonal Judge, as well as UWV) can be appealed in front of the Court of Appeal and the Supreme Court.
  • The Extraordinary Labour Relations Decree 1945 (BBA 1945), is extinguished.

Of course we will keep you informed of developments. Such as on transitional law and the relationship between the changes and ongoing collective agreements.

Contact

If you have any questions or would like more information, please do not hesitate to contact us.

The main rule is the ‘first shot rule’

If you and/ or your partner want a divorce, and your circumstances are international, you should ensure that you are aware of your options. Did you know that it is possible for courts in two different countries to have jurisdiction? And did you know that they can both pronounce the divorce? For instance, if you are both Dutch nationals and you live abroad. Or if one or both of you live in the Netherlands and one or both of you is not a Dutch national. The main rule here is the first shot rule. In other words, the court of the country in which divorce proceedings are first initiated is authorised to pronounce the divorce. This rule was confirmed in a 24 May 2022, ruling by the Amsterdam Court of Appeal (ECLI:NL:GHAMS:2022:1542).

Two divorce proceedings in two different countries

In the above case, the spouses were married in India. The wife has Dutch and Pakistani nationality and lives in the Netherlands. The husband has Indian nationality and lives in India. The husband initiated divorce proceedings in India on 5 May 2015. Divorce has not been pronounced in India as yet. The wife filed for divorce in the Netherlands on 10 August 2020.

The main rule is the ‘first shot rule’

If divorce proceedings have been initiated in two different countries, the principle of lis pendens applies in the Netherlands. This means that a decision on the same issue cannot be made by a court in two different countries. Does a situation arise where proceedings on the same subject – in this case, divorce – are pending in two different countries? Then the rule is that if the proceedings were brought last in the Netherlands, the Dutch court must stay the case until it is decided by the other court. Once the foreign court has rendered a judgement and this judgement is recognised in the Netherlands and can be enforced, the Dutch court declines jurisdiction.

Exception to the rule

The principle of lis pendens was invoked in the Amsterdam Court of Appeal decision mentioned above. In this case, the ‘first’ petition for divorce had been filed by the husband in India seven years ago. It was unknown when a final decision would be made in those proceedings. Let alone whether this would be in the foreseeable future. The husband was in a position to further delay the proceedings in India. Given this, the wife had a compelling interest in continuing the divorce proceedings in the Netherlands. As there were no further reasons why the decision in India should be awaited, the court — in derogation of the principle of lis pendens — did not stay the decision on the divorce pending a judgment in India. Despite the fact that the proceedings in India were initiated earlier, it upheld the judgement of the court granting the divorce.

In conclusion

It is very important in an international situation to check whether courts in multiple countries have jurisdiction over the divorce. This applies irrespective of the exception made by the Amsterdam Court of Appeal to the ‘first shot rule’. This particularly relevant if you prefer to have the divorce proceedings take place in one of the two countries and you are concerned that your partner may have a preference for another country. In that case, it may be wise to start the proceedings in your preferred country on short notice, to avoid the decision being made in the other country.

More information

If you and/ or your partner want to get a divorce, you will need the assistance of a lawyer. You should make sure you are well informed by a lawyer. If you need assistance with your divorce,please do not hesitate to contact me.

Spousal alimony in divorce proceedings in the Netherlands

Are you married and you are heading for divorce (or dissolution of registered partnership)? Then you may need to pay your spouse spousal alimony. However, when it comes to international divorces (a divorce with an international element for example by different nationalities or when you live abroad), it is not uncommon that foreign law will apply. If foreign law applies, you have to ask for advice from a lawyer abroad. Today we will discuss spousal alimony in divorce proceedings in the Netherlands.

Applicable law

When the divorce proceeding takes places in the Netherlands, the Dutch court does not automatically apply Dutch law to spousal alimony requests. What law applies depends on your personal circumstances. However, in general (from a Dutch perspective on the international private law) the main rule is that the law applies of the country where the alimony creditor has their habitual residence. There are exceptions to this rule.

Do you and your spouse both live in the Netherlands? Then it is likely that Dutch law applies to your alimony request. Whether your spouse is eligible for spousal support depends on the financial situation of you and your spouse.

Spousal alimony

When Dutch law applies, the starting point with spousal alimony is that your (soon to be ex-) spouse can continue to live in a reasonably suitable position also after the divorce. This means that when your spouse could fulfil her own needs and can live in a reasonably suitable position also after the divorce, he or she might not be eligible to spousal alimony. To find out, you need to do a calculation, mainly based on your income.

Spousal alimony is calculated on the basis of, (1) the need of the maintenance creditor (the person claiming alimony), (2) what is the alimony creditor earning and does the alimony use their earning capacity and (3) the ability to pay of the maintenance debtor (the person who should pay alimony). This is specialist work. Knowledge of the law, case law and practical experience are essential for this.

Waiving the right of spousal alimony

In the event of divorce (or dissolution of registered partnership) it is possible to waive the right of spousal alimony. However, you and your spouse need to agree on this.  You also need to lay this arrangement down in a (divorce)agreement.

Can you exclude the right to spousal alimony in case of divorce by prenuptial agreement? The answer is no. The Supreme Court ruled in November 2022 (and in line with previous case law) that such agreements are null and void. If you have included such paragraphs in prenuptial agreements, the agreement is not valid.

Even if you have included in the prenuptial agreement that all the (marital) assets remain separate, your spouse can still apply for spousal alimony. This also applies to the situation where your spouse receives part of your assets from the matrimonial property settlement.

At the end of the marriage in the event of divorce, a person’s eligibility for spousal alimony is only assessed. When calculating spousal alimony, it will also be necessary to consider whether it is reasonable. For example, your spouse must also do it’s best to use his/her earning capacity. If there is a large asset, the alimony creditor may have to intervene to fulfil his/her own needs. This depends on your personal circumstances.

To conclude

Are you wondering how much spousal alimony you have to pay to your spouse in the event of a divorce? Or would like to have more guidance? At GMW lawyers we specialise in advising and calculating both spousal- as child alimony. Please contact us if you have any legal questions. We are happy to help.

Employment law: awarding a bonus

These days, a bonus is almost a standard component of an employee’s terms of employment. Employees view a bonus in the same light as a pension and compensation for healthcare costs. However, a bonus is different from holiday pay, which is a permanent and non-negotiable salary component.

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‘It’s my way or the highway’ approach costs employer small fortune

In the unlikely event you are faced with the dissolution of your employment contract because of (alleged) malfunctioning, it is good to know that judges might grant ample compensation when your employer lacks a complete personnel file of malfunctioning and has not given enough opportunity to improve yourself. Read further to learn why the ‘It’s my way or the highway’ approach will cost employers a small fortune.

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Divorce and exclusion clauses under Dutch law: inheritances

There is no global consensus as how to best divide the assets of divorcing couples. Thus, there are sharp differences between the divorce laws across countries. Expats in the Netherlands are often in for a big surprise when they discover they have to share their inheritances with their (former) spouse. Read this article to learn about divorce and exclusion clauses under Dutch law.

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Expat relationships and relocations

When relationships end, many expats prefer to return to their home country with their children and be near loved ones. Here, I will discuss the legal options, specifically from the position of an expat in connection to relationships and relocations.

The parent wanting to relocate with their children – to another country or back to their home country – needs permission from the other parent. This is mainly because moving affects the contact between the children and the ‘not-moving’ parent. For many expats, this can lead to a difficult situation. During a relationship, it’s easier to make joint decisions about the country of residence. But after separating, it’s often more difficult. Does one parent not consent to the relocation? Then the parent wanting to move can ask the court for a ‘substitute consent to move.

Court criteria

When granting permission to relocate, the court will decide in the best interests of the children. In a Supreme Court ruling, the court determines the criteria by which an application for a ‘substitute consent to move’ should be evaluated. However in practice, the court’s decision often comes down to a] the right–and the need–of the one parent to move and rearrange his/her life and b] the other parent’s right to maintain contact with their children. In many cases, the court finds the importance of children maintaining  frequent contact with the ‘not-moving’ parent, outweighs the wishes of the parent wanting to relocate. On these grounds, a ‘substitute consent to move’ is often denied.

Court decisions

In recent case law however–in the specific situation of expats–a ‘substitute  consent to move’ has been granted by the court. The court then attaches  more importance to the wishes and needs of the parent relocating with their children than to the right of the other parent maintaining frequent contact. This is because the ‘moving parent’ can work and has a house/network in the country of origin. Furthermore, it is taken into consideration that continuing to live in the Netherlands can affect the state-of-mind of the parent wanting to move, which may have repercussions on the children. It is also considered important that the parent staying in the Netherlands can (easily) move to–or at least visit– the country of origin as this parent often has family living there as well. For expats who sometimes feel trapped in the Netherlands after a separation, this is a positive development.

Conclusion

It remains difficult to obtain a ‘substitute consent to move’. As it’s in the best interests of the children to have frequent contact with both parents. However, for expats living in the Netherlands and wanting to relocate or return to their home country with their children, recent case law now offers an opening to obtaining that permission.

Contact

If you have any questions regarding expat relationships and relocations, please do not hesitate to contact us.

What about death and inheritance law?

When you come to the Netherlands as an expat, most expats will not be concerned with death and inheritance law. Yet you may also have to deal with death when living in another country. To avoid leaving your loved ones with questions, it may be wise to think about this while you are alive. After all, each country has its own rules. Inheriting abroad can still be extremely complicated.

Inheritance Regulation Law

As an expat, you may have lived in multiple countries and have accumulated assets in multiple countries. But what happens to your estate when you die? Which law applies to your estate? When it comes to inheritance law, each country has its own rules. This also applies to the applicable law. Some countries follow the nationality of the deceased, others the country of residence of the deceased or where the deceased accumulated his assets. In practice, this can cause quite a few problems if someone has a connection with several countries.

All members of the EU, except for Denmark, Ireland and the UK have tried to solve one of these problems by uniforming their rules on the applicable law for inheritance law.  Namely, the law that will be applied to the estate is the law of the country in which the deceased had his or her habitual residence at the time of their death. In short if you have not arranged anything regarding your estate and you pass away when you are living in the Netherlands, Dutch law may apply to your estate.

Choice of law

It is possible to influence your choice of law. Since the arrival of the Inheritance Regulation you can only make a choice of law for the country of which you hold nationality. Based on the inheritance regulation your choice of law will apply in all member states and this can’t be overruled. The only way to specify a choice of law in the Netherlands is in a will. A will is an official deed. According to the Dutch Civil Code it could only be drawn up by a notary. Lawyers can’t draw up a will.

If you move abroad from the Netherlands or move to a country outside the member states of this inheritance regulation, it might be useful to gain advice from a lawyer and/or notary to verify how these countries handle inheritance law.

 

Help with settling estate

You and/or your partner might not have been thinking about inheritance law. However, if the worst possible scenario occurs and you and/or your partner or (another) family member dies, the estate will have to be settled. If you are not familiar with (Dutch) inheritance law we advise you to seek information first before you start settling the estate. In the Netherlands, unlike in other countries, as an heir you can become liable for debts of the deceased in certain situations. Therefore it is important that you are informed about this.

 

Get advice you can trust

Are you living as an expat in the Netherlands or are you Dutch and planning to live abroad? Then our advice is to start thinking about how you want to take care of your estate. For example, start thinking about a will if you have not already got one. If you have a will, find out how the Inheritance Law Regulation might effect your will.

 

GMW lawyers has English-speaking inheritance lawyers (no notaries) who can help you prevent problems, or solve existing inheritance issues. A lawyer can help you if you need help or advice with settling your estate. They can also inform you about your rights or help you find out which law applies. Our lawyers have a broad international network which can help if the settlement requires cooperation with foreign countries. We have a lot of experience with international clients/expats and have the expertise to advice you on the possibilities. Please note that if you want to draw up a will in the Netherlands, a civil-notary is the only one whom is entitled to draw up this official deed.

More information

If you have any questions, would like more information or if you need help, then please do not hesitate to contact us. Our (international) inheritance law experts are happy to assist you.

Marital property law in the European Union

When it comes to the settlement of marital property, in the case of divorce, death, inheritance and gifts, it is not uncommon for foreign law to apply. However, when it comes to marital property law in the European Union you might wonder which law applies.

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International divorce: cross-border legal cooperation

GMW lawyers and the Legal Expat Desk serve clients across the globe. Cross-border legal cooperation in the practice of law is reflected in the growing number of divorce cases with an international dimension. GMW lawyers represents expats who, for example, want to arrange their divorce in the Netherlands. Or the ones who are forced to do so by their spouse.

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Spousal alimony: when the receiving ex moves in with a new partner

Many of those paying spousal alimony hope their obligation to do so will stop, when the receiving ex moves in with a new partner. However, things are not as simple as that.

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Pension given low priority in international divorce cases

In almost all divorce cases, the division of retirement pension is one of the last things married couples think about, particularly in the case of international divorces where the spouses’ priorities lie elsewhere.

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Can a Dutch couple abroad always get a divorce in the Netherlands?

Previous blog posts (here and here) mainly focused on whether foreign nationals living in the Netherlands can file for divorce in the Netherlands. This blog post will look at Dutch nationals living abroad and competency of the Dutch court.

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International divorce: in which country should proceedings be conducted?

Marriages can have an international dimension, due to e.g. nationality or place of residence. The question then arises where divorce proceedings should be conducted.

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Preventing harmful behaviour in the workplace

Harmful behaviour in the workplace can occur at any level and at any moment – be it by co-workers, supervisors, employers or clients. Going to court is often the last resort. However, a lot can be done to prevent this from taking place in the first place.

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The employer’s duty of care

An employer has a duty of care. For instance, the employer has an obligation to protect the safety and health of his employees. In order to prevent employees from suffering damage during the performance of their duties, the employer must take measures. These measures include implementing a policy and giving safety instructions to employees.

With the advent of the #MeToo movement and anti-discrimination measures, the home-working policy during the Covid-19 pandemic and the growth of long COVID patients infected in the workplace, attention to the employer’s duty of care has increased. Employers are even more expected to ensure a safe working environment and atmosphere to prevent employees from suffering damages during work.

Seliz Demirci, employment lawyer at GMW lawyers discusses the content and scope of the employer’s duty of care in light of current topics.

Legal basis

Employers must prevent employees from suffering damage in the performance of their duties. Therefore, Dutch law stipulates that an employer must take the necessary measures. The concept of damage includes both physical and psychological damage. Psychological damage is particularly relevant in the context of sexual harassment. Does an employer breaches his duty of care? Then it is up to the employee to prove the existence of damage. He also has to prove that this damage arose in the performance of their duties. Did proven damage occur? Then the employer needs to prove their liability. The employer’s liability lapses if they demonstrate that they have fulfilled their duty of care. Is the employer not able to prove that they have taken the required measures for a safe working environment? Then they are liable. The bar for liability is therefore low.

(Sexual) harassment and discrimination

The law does not set specific conditions for fulfilling the duty of care. Whether the employer has fulfilled their duty of care will be judged on a case-by-case basis. The prevention of (sexual) harassment and discrimination in the workplace is important. Therefore, an employer may in any case be expected to appoint an (external) confidential advisor. He might also need to provide a complaints procedure. Not only does this enable the employer to demonstrate that they have fulfilled their duty of care, but the parties involved also know how to deal with a complaint. In addition, taking these measures can have both a repressive and a preventive effect.

The employer has not automatically fulfilled their duty of care merely by drawing up a complaints procedure and appointing a confidential adviser; more is expected of them. For instance, an employer has the obligation to respond adequately and in a timely manner to a complaint regarding sexual harassment or discrimination. He must take a complaint seriously and investigate it properly.

Working from home

The duty of care also extends to the home workplace, although the employer’s obligations are then more limited than those that apply within an office or factory. The employer must ensure that the employee has an ergonomically equipped workplace. This means providing a good and large enough desk, an adjustable desk chair, a properly adjusted monitor and associated aids. ‘Taking care of’ does not mean that the employer must purchase everything (new) for the employee, if the employee already has an ergonomically well-equipped workplace. The point is that the employer must establish whether and to what extent the employee has a good workplace at home.

Preventing burn-out

The employer also has the obligation to implement a policy that prevents the pressure of work from becoming too high and the employee from suffering burnout. Limiting the workload is part of this. This obligation also applies – and perhaps even more so – when working from home. Therefore, as an employer, ensure regular (team) consultation about work pressure and provide information about monitoring the balance between work and private life. It is also important for employees to raise the alarm in good time with their employer when the work pressure becomes too high.

Liability

When an employer has not fulfilled their duty of care towards their employees, they can be held liable. If that liability is established, the employee may claim compensation for material and immaterial damage suffered. An employment lawyer can explain your rights, risks and obligations, allowing you to make the best possible decisions.

More information on the employer’s duty of care

If you need to take legal action, our team of employment law experts can help you to work it out. Call us on 070 361 5048 or contact us via our easy online form.

Performance problems and PIPs

All companies aim to optimise performance, including the effectiveness of their employees. Godelijn Boonman of GMW lawyers explains more about performance problems and PIPs. What happens when employee performance becomes a problem and what does a PIP mean in practice?

When is performance a “problem”?

Simply put, a performance problem can occur whenever an employee repeatedly under-performs in their role. As soon as an employer informs an employee that there is a performance problem, such as poor performance, the problem exists.

While performance problems often negatively affect an employment relationship, a performance problem on its own does not automatically lead to dismissal. What happens thereafter is key.

In the Netherlands, both employer and employee are expected to try to solve issues such as performance problems together before the situation reaches the point where termination of employment becomes justified.

What is a PIP?

A Performance Improvement Plan (PIP) is often but not necessarily a formal document that defines recurring performance problems, specific improvement goals that an employee needs to achieve, a time scale for doing so and the consequences when not achieved. An employer can choose to implement a PIP on any employee who has a performance problem, except for an employee who has already been declared sick.  An employer will need to wait for the employee to get better first.

What does a PIP mean in practice?

We can view the implementation of a PIP in two ways:

1 – As an opportunity for the employee to improve, and/or

2 – As a signal that the employment is at risk.

By going through a PIP, an employer can give a poorly functioning employee the chance to succeed and perform well.

However, you can use a PIP to build a case for demotion or dismissal. As such, it should be a red flag signal to the employee; there is a significant problem.

PIP process

Once you implement a PIP, both employer and employee have obligations they must fulfill.

The employer has an obligation to help the employee turn their performance around by providing additional assistance, supervision or training. They must also document the PIP process.

The employee has an obligation to cooperate and actively participate in the PIP process. If the employee adopts a passive attitude, refuses to cooperate, or obstructs the PIP, then the employer can hold this against them.

Don’t get PIPped to the post

In practice, performance issues can quickly derail an employment relationship. If the implementation of the PIP does not lead to satisfactory performance, then it may be time to end the employment.

If you have an under-performing employee, or if your employer presents you with a PIP, it would be wise to seek legal advice. An employment lawyer can explain your rights, risks and obligations, allowing you to make the best possible decisions. Contact us now for all your questions related to performance problems and PIPs.

Tenancy agreements for residential accommodation

When you are planning to rent out your house, there is a lot to arrange and even more to consider. The most important of all is to draw up a good tenancy agreement. It would be wise to check the tenancy agreement before signing so you know your legal rights and obligations. There are three main categories of residential tenancy agreements, each with their own set of legal provisions. I this article I will shortly discuss the categories of tenancy agreements for residential accommodation and their legal aspects.

1. Tenancy agreement for an indefinite period of time

Generally speaking, one enters into a tenancy agreement for an indefinite period of time.

The tenant may terminate the agreement at any time. He does not need to explain the reason why he wants to terminate the agreement. He does however need to comply with a notice period, which is equal to period between two payment days (usually one month, maximum three months). And he has to give notice of the termination by registered letter or bailiffs writ (article 7:271 paragraph 3 DCC).

If you want to terminate the agreement as a landlord, you are limited by the statutory grounds for termination as listed in article 7:274 DCC, such as bad tenancy and urgent personal use. You are only allowed to terminate the tenancy agreement on the basis of one of these grounds of termination. For a landlord there’s a notice period of three to six months. This depends on how long the tenancy agreement has lasted. And just like the tenant, you have to give notice of the termination by registered letter or by bailiff’s writ. If the tenant agrees with the termination, the agreement is terminated. If the tenant does not agree, then you must  ask the court to terminate the agreement. In that case, the agreement is not terminated until the court decides and the decision is irrevocable (article 7:272 DCC).

Besides termination by notice, you can end a tenancy agreement by mutual agreement (article 7:271 paragraph 8 DCC). And by termination for breach of contract (article 6:265 and 7:231 DCC). This applies to all tenancy agreements, regardless of their duration.

2. Tenancy Agreements for an indefinite term with a minimum lease period of one or two years

This type of agreement ends after termination by the lessee or lessor after that specific period. Premature termination is not allowed. Following on from the above, the lessor has the obligation to refer to his specific (statutory) ground for the termination. This last type of tenancy agreement is under pressure, some people feel that this type of agreement cannot exist since the Property Rental Market (Measures to Facilitate Movement) Act 2015 came into effect. Others emphasize that the minister has indicated that this was however not the intent of the legislature. The Supreme Court has not decided on this subject yet

3. Tenancy agreement for a definite period of time of two years or less

You can also decide to use the agreement for a definite period of no longer than two years. (See article 7:271 paragraph 1 DCC). The tenancy agreement must then contain explicit provisions. Such as that the agreement is entered into for a definite period of time. In this case of two years or less in the sense of article 7:271 paragraph 1 DCC.

Article 7:271 paragraph 1 DCC allows you to rent out your house, without the tenant enjoying full rental protection. This means you are not bound by the termination grounds of article 7:274 DCC. Therefore, you can end the agreement by simple notification one to three months before the end of the tenancy agreement. The notification that the agreement will end on the agreed upon end date will then suffice.

It is not possible for you to terminate the agreement prematurely. If you notify your tenant in time, the agreement will end automatically. If you do not notify your tenant (on time), or if you extend or sign a new  tenancy agreement with the same tenants, the agreement will automatically convert into an agreement for an indefinite period of time. In that event, the tenants will enjoy full security of tenure.

A tenant may terminate the agreement at any time and he can do so by simple letter notifying his landlord that he wants to terminate the agreement. Also, he has to comply with the notice period. This period is equal to the rent payment term (usually one month, maximum three months).

4. Tenancy agreement for a definite period of time of more than two years

Finally, you can choose to rent out your house for a definite period of time of more than two years. This agreement is much alike the agreement for an indefinite period of time. As a landlord you may only terminate the agreement on the basis of one of the termination grounds of article 7:274 DCC. If your tenant does not agree with the termination, the agreement does not end until the decision of the court to terminate the agreement is irrevocable. Also, both you and the tenant have to terminate the agreement by registered letter of bailiff’s writ and you both have to comply with the aforementioned notice period of (usually) one month, respectively three to six months. Then, the agreement will end automatically on the end date.

This tenancy agreement differs from a tenancy agreement for an indefinite period of time in the sense that neither the tenant nor you may terminate the agreement prematurely. Both parties have to wait until the agreed upon end date. If you and your tenant wish to extend the tenancy agreement, this extension will convert the agreement into an agreement for an indefinite period of time.

Get help with your tenancy agreement for a fixed fee

Summarizing, the type of tenancy agreement is guiding for the security of tenure. In addition, one can include specific clauses with regard to nuisance, commercial hemp cultivation or illegal subletting, especially seeing on termination because of breach of contract or penalty stipulation.

Finally, over the last years a lot of municipalities have drafted housing bylaw (in Dutch: ‘huisvestingsverordening’), seeing on housing permits, housing evaluation points (number of points scored in a housing evaluation system to determine the rent), or putting a maximum to the amounts of tenants per house in certain areas. It is important to draft or check clauses regarding these subjects as well, since revoking a housing permit will cause major consequences for both owner and tenant

 

Need advice?

GMW lawyers can review your tenancy agreement or specific clauses. They can also provide you with a general legal advice for a fixed fee of EUR 750 including office costs and VAT or draft a tenancy agreement for a fixed fee of EUR 1250 including office costs and VAT.

This written advice contains an overview of your legal rights and obligations regarding the tenancy agreement. In addition, we point out any risks (or red flags) and offer suggestions to alter clauses if necessary. Based on this advice, you can then decide whether you want to use the tenancy agreement you’ve drawn up. Or if you would like to add, alter of remove any clauses.

Our fixed fee package covers only the review and initial advice – but our support does not stop there.

If you need further legal advice about renting out your house, assistance with understanding your rights and obligations, if you have a dispute, or if you need additional help with a specific situation, our lawyers can continue to help you according to our hourly rates.

Please feel free to contact one of our specialists for more information or to request our fixed fee service.

Top tips: Dutch employment contract 2022

So you’ve been offered a new job in the Netherlands in 2022. The position sounds good, the terms sound reasonable, and you’re excited to accept. Now you need to check the contract before you sign it. The only challenge is that you may not know much about Dutch employment law – making it tough to understand what each clause means for your rights.

Expat employment law expert Godelijn Boonman of GMW lawyers shares her tips for assessing and understanding a new employment agreement.

 

Know your contract type, know your rights

The first thing you need to ascertain is whether you are entering a contract for a fixed period (temporary) or for an indefinite term (permanent). This determines which rules will apply to your employment – and therefore determines your rights.

If your contract has an end date, it is a temporary contract. The maximum length of a temporary contract is generally 3 years.

 

Start well: probation period

If your contract includes a probation period (trial period), then you or your new employer can terminate the employment during the trial period without giving any reason. A probation period must be agreed in writing.

Temporary contracts of less than 6 months may not include a probation period. Temporary contracts for longer than 6 months may include a probation period of maximum 1 month. Indefinite contracts may include a probation period of maximum 2 months.

 

In between: conditions and changes

Your contract, together with any applicable general terms and conditions or Collective Labour Agreement, stipulates the conditions under which you agree to work. This includes key information such as the location of your workplace, your salary, hours, job title and the payment schedule.

In the Netherlands, you also want to check for:

Annual leave – full-time employees must receive a minimum of 20 vacation days per year, excluding national holidays.

Vakantiegeld – 8% of your annual salary is reserved as “holiday money”. This amount may be paid annually or otherwise – but it should always be mentioned.

Unilateral changes clause – if your employment terms contain a unilateral changes clause, then your employer can change the conditions of your employment without your prior consent. As this may include topics such as changing the location of your workplace, or a company requirement for corona vaccination, it is very relevant. Do note that an employer can not easily do this. Even though the contract has this clause, the employer needs to meet strict conditions before it can unilaterally change your contract.

 

End well: notice, termination and transition

Notice periods – unless otherwise agreed, an employee’s notice period is 1 calendar month. If you have been an employee for less than 5 years, then your employer’s standard notice period will also be 1 month. Note that you can agree upon different notice periods, but the employer’s notice period must be double that of the employee’s and a maximum of 6 months.

Termination – Temporary employment contracts terminate on the date they end. In the case of an indefinite contract, you can only terminate it: by the employee resigning, through a mutual termination agreement, via a UWV/court dismissal, or by summary dismissal (fired on the spot).

Restraint of trade – If your employment agreement includes non-competition, business relation or partner relation clauses, try to negotiate these upfront; they could limit your future options.

Transition – if your employer wants to terminate the employment, then they will need to pay you a transitional allowance. This comprises 1/3 of your monthly salary per year of employment.

 

GMW lawyers – experts in expat employment law

If you need help assessing your new employment agreement, contact our team of English-speaking employment lawyers for assistance. Call us 070 361 5048 or submit your question online.

 

 

Performance plans, illness and employment disputes

When an employee has performance issues or long-term illness, this can lead to disputes in the workplace. It could even lead to termination of employment. Both employee and employer have certain rights and obligations. What each party can do depends on the exact details of the situation. Expat employment law expert Godelijn Boonman shares key considerations.

Poor performance

When an employee is not performing well in their role, then an employer can take certain steps to address this. The employer may begin with an intervention such as a conversation about performance levels and what they need for the employee to improve. However, the employer may choose instead to create a Performance Improvement Plan (PIP) for the employee. A PIP is a formal document and is far more serious than a discussion.

Once an employer implements a PIP on their employee, both employer and employee must fulfil their obligations in the process. Both parties should try to remedy the situation before it reaches the point where termination of employment becomes justified.

The employer is obliged to try and help the employee improve their performance, for instance by providing the necessary assistance, supervision or training. The employer must document the entire PIP process.

The employee has the obligation to actively participate in their performance improvement process. The obligation is also on the employee to ensure that the employer is fulfilling their obligations in the process. If the employee adopts a passive attitude towards the planned performance improvement, refuses to cooperate in the process, or otherwise obstructs the implementation of their PIP, then the employer can hold this against them.

While a PIP can be used to help an employee succeed, it can also be used to build a case for demotion or dismissal. As such, it is a signal that your employment may be at risk.

But what happens if the poor performance of the employee occurs during long-term illness?

When the employee is declared sick

The moment that an employee is declared unable to work due to illness, whether physical or mental, their status becomes that of a “sick employee” – and both parties’ rights change. A company doctor (bedrijfarts) is the only person who can make this determination.

The employer has the obligation to pay the sick employee’s salary during the first two years of illness, regardless of how much work the employee can perform (in other words: regardless of their performance).

The employer cannot implement a PIP on an employee who was already sick.

Employers cannot dismiss a sick employee during the first two years of their illness on commercial grounds such as reorganisation. (Note that an employee – even a sick one – can always be fired on the spot if the strict criteria for summary dismissal are met.)

Under guidance from the company doctor, both the employer and the employee must work together to create a plan for reintegrating the employee into the organisation as they recover from their illness. This may entail the employee resuming their original duties, but if this is not possible, the employer may provide other “suitable work” for the employee to do instead.

If either party refuses to engage in discussions or to fulfill their obligations then this can lead to a dispute. It can sometimes even become grounds for terminating the employment relationship.

A dispute arises

Sick or under-performing? Truly sick, or just sick of the dispute? Questions like these can lead to an employment dispute.

Illness, performance issues and disputes are separate topics, but they often go hand in hand, and for good reason.

Is an employee’s performance questioned while they are already declared sick? Then the employee may feel that the employer is working against their recovery. When an employer informs an employee that they need to improve their performance, the employee could respond by reporting sick. The employer may then feel that the employee is working against their performance improvement.

In practice, performance issues, illness and especially disputes will often negatively affect the employment relationship.

If an employee calls in sick after a dispute has occurred, this is often qualified as inability to work due to situational inability. A company doctor can then assess if the employee’s inability to work is also due to sickness.

There are only 2 options

By the time a situation escalates to a dispute, it leaves you with only two options: you can either solve it together or solve it apart.

Option 1 – Solve it together

The employer and the employee can come to an agreement together. For instance through mediation, on how to resolve the dispute and thereby improve the employment relationship to the point where it can continue. If this happens, then the employee can maintain the employment.

Unfortunately, once the situation has escalated past a certain point, repairing the relationship is often not a practical or mutually acceptable solution.

Option 2 – Solve it apart

Can the employer and the employee not agree on how to proceed together? Then it is necessary to terminate the employment relationship so that they can part ways.

Due to the time and costs involved in dismissal via the courts/UWV, and because sick employees have protection from dismissal, the termination of employment frequently occurs by means of a settlement agreement. A settlement agreement is a written offer by your employer to give up your job and leave the company voluntarily. This happens often in exchange for a certain set of conditions.

Learn more about settlement agreements in this feature by Legal Expat Desk: Settlement agreements – what you need to know

Don’t wait – get advice

If a problem develops at work, don’t wait to address it. Time alone rarely solves a dispute, and it can escalate fast. If you are uncertain of your rights, getting good advice at the beginning can help you to make better decisions. Situations sometimes reach a point where it would be wise to seek legal advice. For example, when they implement a PIP, an employment dispute occurs, or when you need to terminate an employment relationship.

If you need help with an employment issue, our team of English-speaking lawyers can advise you. We can help you understand your obligations and avoid pitfalls. We can also ensure that the agreements you are making cover all the essential topics.

Contact us using our easy online form or call us on 070 361 5048 to start a conversation.

The diplomatic clause

Are you a diplomat who is about to be deployed to another country? Then it is possible for you to rent out your home for the time you are away, by including a so called ‘diplomatic clause’ in the tenancy agreement. This allows you to terminate the tenancy agreement and return to your home at the end of your deployment. Article 7:274 paragraph 2 DCC allows such clause, or a similar clause for landlords who wish to temporarily stay elsewhere for a different reason, but want to return to their home eventually.

Conditions of the diplomatic clause

The diplomatic clause is one of the grounds of termination the Dutch law allows. Do you want to successfully terminate the tenancy agreement on the base of the diplomatic clause? Then it must be clear that the tenant is entering into the agreement for a definite period of time. And that the tenant must vacate the home at the end of that period. You can explicitly determine this in the agreement. When giving notice of the termination, you must also specify to the tenant that you are invoking the diplomatic clause.

In the case when they prolong your deployment it is possible to extend the tenancy agreement. This could again be for another definite period of time as long as your your tenant agrees. The Dutch law allows such extension(s) with the retention of the diplomatic clause. Whereas they don’t allow an extension of a tenancy agreement for a definite period of time without a diplomatic clause. The extension would then automatically convert the tenancy agreement to an agreement for an indefinite period of time. Herein lies the advantage of the diplomatic clause.

Please note

There are a few things you need to be aware of when terminating the tenancy agreement by invoking the diplomatic clause. First, you must comply with the notice period. This notice period is three to six months, depending on the duration of the tenancy agreement. Second, if your tenant does not agree with the termination in writing, you must ask the court to terminate the agreement. The agreement does not end until the decision of the court is irrevocable. Third, you can’t invoke the diplomatic clause if you do not intend to live in your home upon your return. For example, if you want to use it as an atelier or otherwise.

Alternatives

Do you already know that your deployment won’t last more than two years? Then you can also choose to rent out your home for a definite period of no longer than two years (article 7:271 paragraph 1 DCC). In order to terminate such an agreement, you would only have to notify your tenant one to three months before the end of the tenancy agreement. The notification need to include that the agreement will end on the agreed upon end date. The agreement will automatically convert into an agreement for an indefinite period of time if you extend the tenancy agreement. This could also happen if you do not notify your tenant (on time). Therefore, if the time of your deployment or leave isn’t sure, this might not be the best option for you.

Besides the diplomatic clause, another ground for termination of a tenancy agreement is that you have an ‘urgent personal use’ for your house (article 7:274 paragraph 1, sub c DCC). However, for a successful termination you would have to prove that there is an urgency to get your house back, that you will use the house permanently again and that there are other suitable houses available for the tenant to rent.

How to avoid obstacles

Moreover, the interests of the property owner and the tenants will have to be weighed up, with an uncertain outcome. The judge could also oblige you to compensate moving- and furnishing costs of the tenant. And if you do not inhabit your house within one year, there is a risk that you have to pay the tenants compensation for the fact that they had to move without you returning to the house. By including a diplomatic clause in your tenancy agreement, you could avoid all these obstacles.

If you think a diplomatic clause is suitable for you,please do not hesitate to contact with one of our real estate lawyers.

Conflicts with a building contractor

Hiring an inaccurate building contractor can cause a lot of issues. This blog will inform you on what to do when conflicts with a building contractor arise. In general, the contractor has a duty to heed any orders and directions issued by or on behalf of his client. He has to carry out the work properly and thoroughly in accordance with the provisions of the agreement in question. Additionally, the contractor is liable for any damage he inflicts on a client’s other works and property. He is liable for all damage caused by the execution of work and attributable to negligence. However, carelessness or improper conduct on the part of the contractor also falls under this liability. Including the damage caused by the contractor’s staff, subcontractors or suppliers.

Whether the contractor fails to fulfill his contractual obligations, strongly depends on the specific circumstances of the case. First, it needs to be clear on what work(s) the parties have agreed. The offer, final agreement and further correspondence provide a frame work to give more clarity on this subject. Secondly, there will need to be proof of the defect itself. Again, this strongly depends on the agreements regarding the quality, time frame, and quantity of the works.

Notice of default and conversion statement

In most cases, the contractor has the right to correct his errors. This is because an agreement cannot be terminated easily under Dutch law. Therefore, the client needs to call the contractor to account as soon as possible and give him a deadline in writing to perform properly or to correct the defect. This is called a notice of default. If the contractor does not comply within the set (reasonable) time, he runs a great risk.

Depending on the seriousness and scope of the breach, the client has multiple options, such as (partial) termination, suspending his obligation to pay, or opting for a conversion statement (in Dutch: ‘omzettingsverklaring’). With such a declaration, the client can convert the obligation to perform into an obligation to pay compensation. The contractor can then no longer perform the contract, and is obligated to compensate the client for the damages; in most cases the costs of hiring a third party to finish the works. Once a conversion notice has been sent, the client cannot rescind the contract.

Risks


Please note that short delays or minor defects do not justify termination or making a conversion statement. If the client acts unduly expeditiously, he could actually be the one failing his contractual obligations by not paying the agreed sum or refusing the contractor to finish the works. This makes the contractor the party who may terminate the contract.

Summarizing, it is very important for the client to take all necessary steps in a well-considered way, since you cannot easily undo your (legal) actions. Therefore, we advise you to let an independent building contractor or building engineer review the works, since their reports can be crucial for rightfully taking the necessary legal steps. After this, a lawyer can assist you in taking the next steps, depending on the nature and seriousness of the defects.

 

If you have any questions regarding conflicts with a building contractor, please do contact us.

The 3 most common breaches of contract by a tenant

A landlord can ask the court to terminate a residential tenancy agreement. This is possible in cases where the tenant breaches the agreement. The court can consequently order the tenant to evict (in Dutch: ontbinding en ontruiming) the property. A residential tenancy agreement can be terminated according to the statutory grounds for termination by giving notice (in Dutch: opzegging). Termination of  an agreement can also take place by mutual consent (in Dutch: wederzijds goedvinden). However, sometimes a breach of contract is also one of the grounds for terminating a residential tenancy agreement as well.  In the following I will discuss the three most common breaches of contract by a tenant.
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Renting out your property: management agreement or tenancy agreement?

Increasingly, property owners choose to outsource the management of their properties. There is often no proper definition of what is for whose account, with costly and sometimes irreversible consequences. The main cause of this problem are the often unclear drafted agreements between owners and property managers. When you’re renting out your property; Do you choose management agreement or tenancy agreement? Read more down below.

Lease or management agreement?

The title of the agreement is not decisive for the qualification of the agreement. This is also evident from a 2019 case. Here, the parties had called the agreement agreed upon between them a “rental agreement for living space”. A specific clause granted the tenant/manager the right to sublet the premises. When the property owner wanted to terminate the lease, the tenant/manager invoked rent protection. (As if he was a regular tenant).

If this appeal succeeded, the tenant/manager could continue to sublet the rooms for an indefinite period of time. Both parties referred to the agreement as a “rental agreement,”. However, the actual performance of the agreement led the Court to come to a different conclusion. They stated that the agreement could not be classified as anything other than a management agreement. The tenant would have rent protection if the court had ruled that there was a rental agreement. This would have made it more difficult for the property owner to terminate the rental agreement.

Company as resident

In a similar case, the District Court of Amsterdam ruled that there was a management agreement with, among other things, the consideration that a private limited company could not even occupy a property as a tenant.  This made it legally impossible to speak of a tenancy agreement, contrary to what the parties had agreed.

Notices to the administrator

(Non) given announcements can also lead to a discrepancy between the tenant, landlord/manager and property owner. In a case from 2012, the tenant believed that the manager had given him permission for a large-scale renovation. The manager in turn defended this. He was stating that the tenant could not even assume that he was authorized to give permission for large-scale renovations. The Court of Appeal of Amsterdam did not go along with the manager’s defence. The claimed that giving permission for a major renovation does indeed fit in with a manager’s job. The tenant was therefore entitled to assume that he was allowed to carry out the large-scale renovations.

In addition, the tenant thought he had permission to sublet the rooms. The court ruled that even if the manager had said that he gave permission for subletting, the tenant should not, in principle, have trusted that the owner had entrusted the manager with such powers. Such a communication concerns exploitation of the property, and one can not consider this to be part of the management by the manager.

Conclusion

These cases are frequent. They are also good examples of why it is important to draft an agreement between manager and property owner carefully. It is important to prevent a property owner from the confrontation of major renovations of his premises by the tenant. As well as the prevention of subletting by the tenant or a manager suddenly invoking rent protection.

If you have any questions regarding renting out your property, please do contact us.

 

The differences between renting or leasing commercial space

What are the differences between renting or leasing commercial space? If you rent or lease commercial space, Dutch law distinguishes between two ‘types of commercial spaces’. The so-called 230a-spaces and 290-spaces. The difference between the two types of business premises and the applicable legislation is important for both tenants and landlords. In this blog I will discuss some important differences.

290 business premises

Business premises qualify as 290 business space if you lease the building or part thereof for the operation of a retail business. Such as a restaurant, a café, a take-away or delivery service or a craft business. The relevant aspect or criterion is whether the space is a publicly accessible area and if you’ll use it for the direct supply of goods or services.

In simple terms, a commercial space qualifies as a 290-spaces if consumers can physically enter and buy or order things in the leased space. For example a supermarket or a hairdresser. Hotels and campsites also fall under this legal regime.

Duration

The tenant of a 290 business space has a relatively high level of tenant protection under Dutch law. The most striking aspect is the duration of the rental agreement. The initial rental period for 290-spaces is five years. If the contract is not terminated (in time) it will be extended for another five years by law. If the tenancy agreement has not been terminated after ten years, the tenancy agreement becomes a contract for an indefinite period by of law.

Possibilities of termination

In addition to the protective regulations for the tenant regarding the duration, the termination options of the lease contract for 290 business spaces are limited.

Both the lessor and the lessee can only terminate the lease at the end of the agreed term. This is however subject to a notice period of at least one year. The termination of a lease contract of a 290 business space can therefore not happen prematurely. However and for completeness I point out that premature termination by mutual consent is possible. One can terminate a permanent lease at any date. In all cases termination by the landlord is only possible if he states the reason(s) for termination.

The law only grants a few specific grounds for termination to the landlord. Which grounds for termination the landlord can use depends on the lease period(s) that have passed. The most common grounds for termination are: bad tenancy behavior and urgent own use by the landlord. Bad tenancy is, for example, if the rent is structurally not paid or not paid on time or if the tenant causes structural nuisance.

If the tenant does not agree to a termination by the landlord within six weeks, the landlord has to go to court to have the termination reviewed. Such a procedure is often time-consuming and costly.

230a business premises

If the leased property does not fall under the regime of residential or 290 business spaces, the 230a regime applies. Common examples of 230a business spaces are office space, factories, storage space and showrooms.

The tenant of a 230a space has much less legal protection than the tenant of a 290 space. The rental period, for example, is not subject to any form of contract. One can conclude it for a short(er) period. It is common practice that parties agree on a term of (only) one year, which period will automatically extend. An indefinite period is also possible.

A contract for a definite period ends automatically when the agreed period expires. A contract for an indefinite period ends by termination by the lessee or lessor. A reason for termination is not necessary. However, a notice period must be observed. Unless otherwise agreed, the notice period is equal to the term of payment. If the rent is paid monthly, the notice period is in general one month. However, an extended notice period could be applicable if the principles of reasonableness and fairness so require.

Note that the tenant can extend his stay in the event of termination by the landlord by invoking eviction protection. For example, because he needs time to move to another business accommodation. This period can be a maximum of three years after the date on which eviction from the leased property was given notice.

Conclusion on renting or leasing commercial space

The legislations that apply on the lease of a commercial space depend on the type of business space the tenant rents. When it comes to 290-premises, such as retail space, there is far more protection for the tenant than when it comes to 230a space.

Further agreements can be made in the tenancy agreement, for example regarding the termination of the contract. When it comes to 290-premises the legal rules may never be deviated from to the detriment of the tenant. However, when it comes to 230a space, parties have a lot of freedom to incorporate specific arrangements in their contract.

When entering into a commercial lease, both as landlord or a tenant, it is advisable to carefully think about the applicable legislations and the obligations by law and by contract. And when it comes to 230a space, I recommend to already incorporate agreements about, for example, the extension of the lease period, the notice period in case of termination and of course the actual possibilities of termination. When it comes to 290 commercial space, the landlord would do well to carefully organize the possible  termination of the lease.

More information?

In case you have questions about renting or leasing commercial space, ensure certainty and have your tenancy agreement assessed by a lawyer, please do not hesitate to contact us.

4 documents to read before buying an apartment

The communal interests of the various apartment owners in one building are regulated in the Dutch apartment right. Besides the rules of law, the rules for a specific complex of apartments are written down. These are the 4 documents to read before buying an apartment:

  1. the deed of division,
  2. the general property division regulations which have been declared applicable in the deed of division,
  3. internal regulations –in case they exist-, and
  4. the minutes of the VvE-meetings are important. All owners are bound to the decisions that are made in these meetings.

It is to be advised to check all these 4 documents carefully before signing the purchase-agreement of the apartment. This way, unexpected surprises can be avoided.

The deed of division

A building is divided into different apartment rights, which are described in the deed of division. The deed of division contains a description of the fractional share of each apartment in the building, the fractional share of each apartment in the contribution of the communal costs, and the voting ratio. Furthermore, the division deed contains division regulations, which mostly consists of the reference to one of the model regulations registered in the public registers, as well as amendments and additions thereto. And last but not least, the deed of division establishes an Owners’ Association (VvE), which manages the common parts of the building. Unlike ordinary associations, all owners are members by operation of law. There is no choice here.

In particular the voting ratio might be interesting to check before signing the purchase-agreement. Can your vote be of any importance? Or will you be overruled anyway by a major owner?

The division regulations

The division regulations contain all general rules of the VvE, including which parts belong to the community and which do not, which decisions require permission of the VvE-meeting, how a budget must be set up, how a meeting must be organised, the duties and power of the board, etc.. More modern regulations also contain rules on the quality of the floors in the individual apartments, or rules on sustainability.

It is very important that these rules are followed. If not, there is an actual risk that a situation or decision can be annulled or can be declared illegible.

The rules in the deed the division or the division regulations can’t be altered just by a decision at the VvE-meeting. In case the VvE-meeting wishes to deviate from the deed or the rules, they will have to decide to change the whole deed first. However, this is not easily done. A notary must draft and register a whole new deed and all owners, or at least 80% have to cooperate.

Internal regulations

The internal regulations can be established or altered by a majority of votes in the VvE-meeting. They must also be in line with the the rules in the deed, the division and the division regulations. They are suitable for example to make sure that bikes are not stalled on the gallery, elevators are kept clean, etc..

Some internal regulations forbid smoking in the individual apartments, or having pets. This is overruled by court in case law. Smoking and having pets are a private matter. As long as they don’t bother the community with any nuisance, the VvE has no say in this.

Meetings and decisions

The VvE meets at least once a year. At the meeting, decisions are made, which are in turn implemented by the board of the VvE. If an owner disagrees with a decision, he can apply to the cantonal judge within one month to have the decision annulled. The cantonal judge can annul the decision in case he concludes that the prescribed process to come to the decision was not followed, or in case he concludes that the decision is contrary to one of the main rules of apartment right: all members in the community must behave to one another according the rules of reasonableness and fairness.

Resolutions that are contrary to the division deed or the division regulations are null and void and do not need to be annulled. For that purpose, one can go to the ordinary court to have the nullity determined. No specific time limit applies (except for the statute of limitations). A resolution in which, for example, a communal debt is divided among only a few owners, can be null and void.

 

The VvE-specialists of GMW lawfirm will be happy to represent or advise you in case of a VvE-dispute. You can contact us here. We can work it out!

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Relationships can change at any stage of our lives, including while living in another country. If the time comes to get divorced, understanding your legal rights will help you achieve the best possible outcome.

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Reorganisation and redundancy in the Netherlands

Employees in the Netherlands enjoy strong legal rights. They can only be dismissed for a limited number of reasons (grounds). One such reason for dismissal is redundancy for business economic reasons, for example during a company reorganisation. This article explains the process employers must follow and why a settlement agreement can be easier than dismissal via UWV procedure.

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Losing your job in 2020 – key considerations

There’s not much worse than facing dismissal, except perhaps for losing your job now in the current crisis. Companies are failing, jobs are scarcer, and just getting to an interview is more complicated. As an expat, the threat to residence makes this an even bigger issue. So, if the worst happens, here’s what you need to know about your legal rights and options.

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Dismissal law in the Netherlands 2020

Dutch employment law has changed in 2020. With the introduction of a new act, the grounds for dismissal in the Netherlands have expanded. Here’s what you need to know.

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The (not so) amicable truth about divorce

Many people believe that they will be able to make the end of their relationship civil – but unfortunately, this does not always happen. Instead, escalating hurt and anger cause hostility and make communication difficult. In such circumstances, the divorce process is anything but friendly. This is where a good divorce lawyer can help.

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6 FAQ about coronavirus and work, home and business

The media is dominated by so much information about the novel coronavirus (Covid-19) that it’s hard to keep track of what it means in practice. Here are some clear answers to frequently asked questions about coronavirus and employment, property and business according to Dutch law.

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Say goodbye to shorter working hours – the WTV is discontinued

On 17 March 2020, the Dutch cabinet announced that the WTV scheme for shorter working hours has been discontinued. Instead, employers affected by the coronavirus can apply for a new temporary measure designed to support employers, employees and entrepreneurs.

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New job? Do the 5 point check

Being offered a new job is exciting, especially when it provides the next step to your career. You may want to sign the new contract immediately to secure the deal – but before you do, take a moment to quickly check these 5 points. They are key to your future rights at work.

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How to get divorced in the Netherlands – a guide for expats

If you want to get divorced, and you live in the Netherlands, you need to:

  1. Confirm if you can get divorced in the Netherlands
  2. Get a lawyer. You cannot represent yourself.
  3. Find out how to get the best possible divorce. This includes making specific agreements about your children and other important matters.
  4. Go through the legal process of a divorce.

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Why you don’t need a reason to get divorced in the Netherlands

According to Dutch law, it doesn’t matter why you want to get divorced. This fact surprises many expats. Antoine de Werd of GMW lawyers explains why this rule in Dutch law exists, and what it means for you.

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