Changes in Dutch dismissal law, non-competition clauses, payroll and employment contracts in 2020

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Changes in Dutch dismissal law, non-competition clauses, payroll and employment contracts 2020 lawyer attorney amsterdam

 

As of 1 January 2020, the Labour Market Balance Act (WAB) will change Dutch labour law in the areas of permanent staff, dismissal, successive employment contracts, non-competition clauses, unemployment benefits and more. What exactly is going to change? Our employment lawyer in Amsterdam, P.Chr. Snijders, lists the most important changes for employers and employees.

What will change in Dutch labour law in 2020?

The Work and Security Act (WWZ) has already brought about a great deal of change in labour law in The Netherlands, particularly in Dutch dismissal law. The Labour Market Balance Act should further regulate the Dutch labour market. A vast majority of the WAB will enter into force on 1 January 2020.

Reduce flexwork in 2020

One of the goals of this new law is to reduce flexwork in The Netherlands. It will become more attractive for an employer to employ personnel (including young people) on a permanent basis. This means that ‘permanent employment’, usually an employment contract for an indefinite period of time, will become less ‘permanent’, making it easier to dismiss staff, while flexible employment should become less attractive for employers.

Changes to Dutch dismissal law: dismissal becomes easier for employers

In order to achieve this, it will first of all become easier for employers to dismiss permanent staff. The conditions for the dismissal of permanent employees will become less strict. Before 2020, Dutch dismissal law included eight strict grounds for dismissal. As of 1 January 2020, dismissal (dissolution) will also be possible in the event of a combination of circumstances, the so-called ‘cumulation ground’. For example:

  • culpable behaviour
  • in combination with frequent absenteeism due to illness.

Combination of circumstances

Both grounds may not be sufficient grounds for dismissal, but in combination with each other the separate grounds may be sufficient for dismissal. This means that it is easier for an employer to dismiss personnel via the subdistrict (cantonal) court.

A combination of circumstances mentioned in two or more of the grounds may lead to the conclusion that the employer cannot reasonably be expected to allow the employment contract to continue.

Higher transitional allowance in case of combination of grounds for dismissal

The dismissed employee may receive an extra half transition allowance if this cumulation ground leads to dismissal (in addition to the regular transition allowance).

Transition allowance will be lower in case of dismissal

The requirement that an employer does not have to pay transition compensation to an employee in the event of involuntary dismissal until he has been in service for at least two years is abolished. According to the WAB, an employee is entitled to a transition allowance in the event of dismissal from the first working day. This also applies to dismissal during the probationary period.

This transition allowance in the event of involuntary dismissal will, however, be considerably lower as a result. The employer then pays 1/3 gross monthly salary for each full year of employment.

The period for the transition allowance will no longer be rounded off to half a year, but will be calculated over the entire term of the employment contract.

Compensation for the transition allowance

There will be a scheme for small employers to compensate the transition allowance if they have to terminate their business due to retirement or illness.

Competition clause in the event of termination during the probationary period

If the employer terminates the employment contract during the probationary period, a non-competition clause will only be valid in the event of very important business or service interests.

Flexible work and successive contracts

Flexible work should become less attractive in 2020. Three consecutive contracts in three years’ time are still considered to be of a definite duration. After that, or in the case of 4 contracts, a contract for an indefinite period of time is automatically created. The interval between two successive contracts may not exceed six months.

A different arrangement may apply in a compulsory collective agreement. There is an exception for invalids in primary education who substitute due to illness. They can work with several separate employment contracts one after the other, without a permanent employment contract.

Call workers, zero-hours contract or a min/mac contract

In the case of a zero-hours contract or a min/max contract, the employee only has to work if he has been called upon to do so at least four days in advance. He may refuse the work without being called up. If the employer withdraws the call less than four days in advance, the employer must still pay the on-call worker.

After twelve months of work, the employer is obliged to offer the on-call worker a contract for the average number of hours he worked in the year in question.

Payroll and ‘regular’ employees

The WAB puts payrollers on an equal footing with employees in terms of employment conditions. This means that an employer must pay more for the use of payrollers. Only pensions are subject to the company’s own scheme.

Changes in Dutch dismissal law, non-competition clauses, payroll and employment contracts 2020 lawyer attorney amsterdamContact employment lawyer in Amsterdam

Are you looking for involvement and direct, personal contact with an experienced employment law specialist in Amsterdam? Call our specialist employment law and dismissal law lawyer mr. Snijders for questions and legal advice on employment law, dismissal, transition compensation and other employment law issues.

 

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