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Changes in Dutch employment law

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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.

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

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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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Top tips: Dutch employment contract 2022

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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.

 

 

The 3 most common breaches of contract by a tenant

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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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New job? Do the 5 point check

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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

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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

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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

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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

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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

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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

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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

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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.

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Place of work determines applicable law

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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

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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.

Expat employment contract means temporary contract?

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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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