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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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Changing employment conditions

When an employer and employee sign an employment contract, both are bound by this contract, including the terms and conditions of employment. So what happens when an employer wants to change the employment conditions that were agreed?

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When to call a lawyer about work

As an employee, you may be confronted with an unpleasant situation at work, such as a conflict, demotion or change in your employment conditions. In such circumstances, it can be difficult to know how to respond. Read more

The seven things you need to check in your new employment contract

You’ve just got a new job, or perhaps you’re extending an existing position. You’ve just received a new employment contract. Before you sign your employment contract, there are some key clauses to which you should pay attention.

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Things to consider when confronted with dismissal

Even though the Dutch economy is growing again, many companies are still dismissing employees. Godelijn Boonman highlights the top 8 things to consider when confronted with dismissal.

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Employment contract: non-competition clause

The non-competition, or non-compete clause is a clause that can be included in an employment contract between employer and employee. This clause states that the employee is forbidden, both during his period of employment and thereafter, to be employed by or associated with a company that performs work or provides similar services to the business of the employer, and that therefore could be in competition with the business of the employer.

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Dutch labour law and your contract of employment

Your employment contract may determine specific payment and work conditions, but Dutch law determines your rights as an employee in the Netherlands. There are a great many Dutch laws that apply, but some are especially relevant to international workers. Here are some expert tips on evaluating your employment contract under Dutch law.

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Employee or contractor? Recent changes in the Dutch business climate

For companies who are deciding to establish an office in the Netherlands, the legal form of the business is important. Equally important are the people who are going to work for the company: does the company want to hire employees or contractors? These two are very different. 

Employee

The three main features of an employment relationship are: that the work is performed personally; for which the employee is paid; and that a relationship of authority exists between employer and employee.

In the Netherlands, the law protects employees. An example of this protection is that an indefinite contract cannot be terminated without prior approval from the UWV (Employee Insurance Agency) or a sub-district court. Also, an employer is always obliged to withhold payroll taxes (loonheffing).

Contractor

As a contractor (or ZZP’er in Dutch), one does not have to perform the work personally. Furthermore, there is no relationship of authority between the employer and the employee. In other words, a contractor works independently.

An agreement with a contractor can be terminated by giving notice. Generally no compensation is due and termination is possible at all times. Another difference is that the company does not have to withhold payroll taxes. Therefore, it is understandable that many companies hire contractors instead of employees. A contracting relationship can be more easily ended and offers more flexibility to the hiring company.

But how can one be sure that the contractor is indeed a truly independent business person? Until May 1 2016, contractors obtained a so called VAR from the Dutch Tax Authorities. If the contractor was in the possession of a VAR, the company could be sure that this person was truly independent and that they did not need to deduct wage taxes and make social security contributions.

Recent changes in the Netherlands

Since May 1 2017, the VAR no longer exists. A new legislation has been introduced, the DBA (Deregulering Beoordeling Arbeidsrelaties) law. The enforcement of this law has been postponed until July 1, 2018.

This law entails the re-assessment of work relationships. It concerns a system of general fixed contracting agreements in order to gain security over the character of the working relationship and check whether it really concerns an independent contractor relationship (and not an employment relationship).

However, another possibility is for the company to submit its own contract for approval by the Tax Authorities. If this contract is approved or if one uses the model contracts, a company can be sure that it will not be liable retroactively for the payment of payroll taxes. But don’t forget: even when using such a contract, a company must make sure that parties act according to an independent contractor relationship and not according to an employment relationship.

Changes for managing directors

The recent changes also apply in the case of managing (statutory) directors: employees but also directors of a company. Do note that the general meeting of shareholders has authority over the managing director, meaning that they mostly work as employees. The general meeting appoints and dismisses managing directors, taking into account the notice period. No prior approval of UWV or a court is necessary in this situation.

Questions?

If you have any questions about hiring an employee or contractor or if you are a contractor with questions about the implications of new legislation about contracts, please contact one of our lawyers or submit your question online.

 

Update article: November 2017.

Place of work determines applicable law

Which national law is applicable when it comes to international employment contracts? Is this the country of the employer, employee, or the country where the organisation is located?

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The choice of law in the employment agreement

When parties conclude an employment agreement, they can agree that this agreement shall be governed by a law chosen by them. Such choice of law applies when the employment agreement is international in nature. When all connecting factors point to one country, the obligatory provisions of that country are not set aside by the choice of law in the contract.

Explicit and implicit choice of law

Usually, a choice of law is explicitly taken up in a clause in the international employment agreement. Nevertheless, a tacit choice of law is also possible. This must be clearly demonstrated by the terms of the contract or the circumstances of the case. Examples of such indications are: a jurisdiction or forum clause, and references to a section of law of a country.

The impact of the choice of law

When the international employment agreement contains a valid choice of law, this does not mean this law actually governs the whole contract.

First of all, the application of overriding mandatory provisions of the law of a country cannot be restricted. Important sections of Dutch law which are considered overriding mandatory provisions are provisions regarding working conditions, working hours, and minimum wage. These provisions apply irrespective of a possible choice of law when the situation falls within the scope of Dutch law.

Second, a choice of law may not deprive the employee of the protection afforded to him by obligatory provisions under the law that would have been applicable to the contract without the choice of law. Most of Dutch labour law consists of obligatory provisions, and, most important, Dutch dismissal law is fully mandatory. This means that even when the law of another country is chosen by the parties in the employment agreement, it is possible that (parts of) Dutch law applies as well.

In conclusion

When no choice of law clause is taken up in the contract, this does not necessarily mean no choice of law has been made. Furthermore, when a choice of law is agreed upon, this does not always exclude the applicability of (parts of) the law of another country.

Not sure about which law applies to the employment agreement? Contact us for advice.

Changes in Dutch employment law

Starting January 2015 a new Dutch employment law will be the source of many changes. This new law will have a large effect on employment contracts.

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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.

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Expat employment contract means temporary contract?

In a 2013 case, a judge in Rotterdam decided that the expatriate employment contract under which a Cape Verdean employee performed work in the Netherlands, was a temporary employment contract. According to the judge, this expatriate employment contract was only a temporary addition to the permanent employment contract, which was concluded on Cape Verde.

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