Dutch employment law – employment contract
Our Dutch lawyer in Amsterdam gladly advises you on all facets of Dutch (Netherlands) employment law. An employment contract in The Netherlands contains the rules that employer and employee agree with each other. There are limits to this: a provision in the employment contract may not be in conflict with principles of morality, public policy, or with Dutch rules of mandatory law. In addition, both employer and employee must behave as ‘good employer’ and ‘good employee’.
A Dutch employment contract may be verbally agreed, but some agreements must always be in writing for them to be valid, like agreements on the trial period or the non-competition clause.
Dutch employment contract
Every Dutch employment contract must meet 3 conditions:
- Authority relationship: the employer may give instructions to the employee;
- The employee receives salary;
- The employee must personally perform the work and may not use another person for it
Subjects in Dutch employment contracts
The most common subjects in a Dutch employment contract are: job description, salary, bonus, 13th month, overtime, place of employment, travel allowance, company car, probation period, notice periods, holidays and holiday allowance, pension scheme, confidentiality clause, (non-compete clause, non-competition clause) and study costs scheme.
CAO and employment contract in The Netherlands
Often, a collective labor agreement, collective labour agreement (CLA) or collective bargaining agreement (CBA), ‘CAO’ in Dutch, applies, that contains rights and obligations concerning:
- working time,
- dismissal arrangements.
Collision with CAO
If the collective labor agreement and the employment contract conflict, the collective labor agreement will prevail. Even if the employment contract is not clear, but the collective agreement does, the collective labor agreement applies.
Dutch imperative law employment contract
In addition to the CAO, other regulations apply to the employment contract, such as the Dutch Civil Code, the Minimum Wage Act, the Working Hours Act, the Working Conditions Act, the company regulations, for example rules on safety and illness.
- the trial period,
- minimum wage,
- and notice periods
are often mandatory.
Probation period in Dutch employment contracts
Probationary periods are common in both fixed term and permanent contracts. During the trial period, the employment contract can be terminated by each party at any time. A probationary period clause is only valid if it has been drawn up in writing and must have the same duration for both parties. A probationary period may, depending on the duration of the employment contract, last one or two months. From 1 January 2015, no probationary period may be included in an employment contract of six months or less.
Competition clause in The Netherlands
A non-competition clause must be agreed in writing with an adult employee.
Types of employment contracts in The Netherlands
Labor contracts are available in types and sizes. Flexible employment contracts are intended to cover temporary work or a shortage of personnel. This includes temporary workers, payrollers and on-call workers.
Contract fixed or indefinite time
A Dutch employment contract can be temporary or for an indefinite period of time. A temporary contract ends automatically (by operation of law) after the end of the fixed period. Interim cancellation is only allowed if this has been agreed in advance in writing.
Fixed-term employment contracts: successive employment contracts with the same employer
Under the Dutch ‘chain rule’ parties can agree on up to three consecutive fixed-term contracts ending on an agreed date. A fixed term contract may be automatically converted into a permanent contract.
- Fixed-term contracts must be completed within 24 months. After 24 months or more at intervals of at most 6 months, the last employment contract shall be deemed to have been entered for an indefinite term as from that time. No more than 3 consecutive temporary employment contracts may be entered into; the next contract is automatically a contract for an indefinite period;• Temporary contracts are considered consecutive if they follow each other at intervals of 6 months or less;
- These rules do not apply to employees younger than 18 who do not work more than 12 hours a week (mostly students);
- Collective labor agreement can no longer be deviated from the statutory rules: it can be stipulated in the CAO that an employer can enter into a maximum of 6 fixed-term contracts for a maximum period of 48 months (for example in the hotel and catering industry).
- By written agreement, a statutory director may deviate from the term of 24 months. However, this does not apply to the maximum of 3 fixed-term employment contracts.
- The Minister can designate certain branches of industry that deviate from the limitation on entering into fixed-term contracts (such as professional footballers).
If no clear agreements have been made, an employee might claim a legal presumption of employment contract if he can prove that he worked for the same employer every week, or at least 20 hours per month, for 3 months.
Termination of employment contract in The Netherlands
An employment contract can be terminated in different ways:
- An employment contract expires automatically on the agreed end date;
- by mutual agreement (settlement agreement or termination agreement);
- end of probation period;
- cancellation by the UWV Werkbedrijf (economic reasons or long-term disability);
- dissmissal on the spot (urgent cause);
- dissolution by the Subdistrict Court (personal reasons, poor performance or a disrupted employment relationship);
- collective dismissal.
An employer must inform the employee whether he intends to continue or terminate the contract (fixed-term contract of six or more months) no later than one month prior to the agreed end date.
Getting help with a Dutch Labour & Employment Law lawyer in Amsterdam, The Netherlands
Please contact our Amsterdam lawyers if we can assist you with any labour relations matters whether you are an employer or employee. Our lawyers in The Netherlands will advocate on your behalf with strong and knowledgeable legal counsel. Our goal is to resolve legal matters through a tactful negotiation, if possible, and by decisive litigation when it is not. For further information about Dutch Employment and Labor Law, please contact our Employment Contract lawyer: 0031 20 5221999.