Our Dutch employment and dismissal lawyer in Amsterdam provides legal advice on the non-renewal of a fixed-term employment contract. Is an employer always free not to extend an employment contract after it has expired?
In principle, an employer does not have to renew a fixed-term employment contract, for 6 months or any other period of time, when it expires on the termination date. The employer does not even have to give a reason, because in principle a fixed-term employment contract ends by operation of law on the end date.
Due to the corona crisis in particular, many employers in Amsterdam terminate their fixed-term contracts. Nevertheless, an employee (expat) can under circumstances claim fair compensation, or even forced renewal. The employer does not have to give a reason for not renewing, but if the employee requests it, it does. Sometimes this shows that an employer is discriminating.
Non-renewal of a fixed-term employment contract due to discrimination
If it turns out that the employer acted contrary to, for example, the equal treatment of men and women in the non-renewal of the employment contract, he may have a problem. This is laid down in Section 7:646 paragraph 1 of the Dutch Civil Code. After all, by virtue of this article, the employer may not make a distinction between men and women:
- when entering into the employment contract,
- the provision of instruction to the employee,
- in the terms of employment,
- in the event of working conditions, promotion and termination of the employment contract.
- Non-renewal of fixed-term contact due to pregnancy
Employer doet not want to extend a contract if an employee turns out to be pregnant
A clear example of this is when an employer does not want to extend a contract if an employee turns out to be pregnant. A judgment of the District Court of The Hague showed that an employer had been so ‘smart’ as to mention the pregnancy. That was the reason for not extending her contract. The district court remarked that the whatsapp message simply had a ‘discriminatory character’. On that basis, the Subdistrict Court imposed a fair compensation of € 3,000 gross on the employer.
Board for Human Rights and Discrimination
In order to know for sure whether there is discrimination, an employee can ask the Board of Human Rights for an opinion. The board of Human Rights will then make a decision about possible unequal treatment. The verdict is not binding, but may be of importance in a court case. For example, the Board has ruled that the employer made a prohibited distinction according to age when the employer wanted to dismiss a 53-year-old employee ‘in order to rejuvenate the company’. The board of Human Rights also considered dismissal during the probationary period of an employee who was seriously ill, to be a distinction based on a chronic illness.
Fair compensation in the event of non-renewal
On 19 October 2018, the Supreme Court ruled that facts that took place after the employer made it clear that he will not continue the contract, are also relevant. All of this is important for the judgement as to whether the employee is entitled to fair compensation as a result of the non-renewal. Facts and circumstances occurring after that end of the contract may also provide indications of a serious accusation. For example, if it turns out afterwards that the employer did not want to continue the contract in order to avoid payment of a bonus.
Obligation to offer a new contact after the end of the fixed term contract?
By way of exception, the court can oblige the employer to offer a new employment contract after all. On 3 April 2015, the District Court of The Hague ruled that an employer who uses this type of separate contract for seasonal work, may be obliged to offer the employee a new fixed employment contract for the following season. The Court in preliminary relief proceedings considered that during those ten years, the employee had geared his household and spending pattern to his income. The judge also mentioned that the employment relationship has become ‘to a certain extent sustainable’ during 10 years. In that sense, the employer had created confidence that the employee would also be engaged for the next season. And by means of a fixed-term contract. ‘The requirements arising from Section 7:611 of the Dutch Civil Code mean that employer and employee take each other’s reasonable interests into account’, according to the court.
Notice of termination obligation
No later than one month before the employment contract ends by operation of law, the employer must inform the employee of this in writing. He must indicate that the employment contract will not be continued. If the employer fails to do so, he shall owe the employee compensation. This is equal to the amount of the salary for one month. If the employer fails to comply with the obligation to give notice on time, he shall owe the employee compensation on a pro rata basis.
Transition compensation and non-renewal of a fixed-term contract
Since 1 January, every employee has been entitled to a transition allowance in the event of unforeseen employment.
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