A fixed-term employment contract can be ‘tacitly’ renewed in The Netherlands. This means that, despite the fact that a Dutch employer and employee have not agreed anything else, all clauses of that contract remain in force. The employment contract is then automatically extended for the same period. What exactly is meant by a ‘tacit extension of the employment contract’ for the same term with all the clauses contained therein in The Netherlands? Our Dutch employment law specialist, Mr Paul Snijders in Amsterdam, explains. The Dutch case law on this is rather dated, but the highest authority, the Dutch Supreme Court, ruled on this on 8 June 2007 (ECLI:NL:HR:2007:BA6755).
Negotiated an extension of the employment contract: continued without contradiction?
The Dutch court of appeal had previously held that “continued without contradiction” (i.e. tacitly continued) in Dutch employment Law does not include the case where the parties had first negotiated an extension of the employment contract, but then failed to agree on the duration of the extension because the employee wanted an indefinite contract: here, the employer had offered only a 2-month extension but the employee refused to sign an amended agreement.
Extended agreement for the duration originally entered into
Afterwards, the employee continued working for 2 months after the end of the old contract, but the contract was terminated by the employer after the offered 2-month duration. Thereafter, the employer refused to continue the contract.
The employee then invoked the existence of an extended contract for the duration originally entered into.
Stopped negotiations on the extension
However, the court ruled that as a result of the ceased renewal negotiations, which the parties eventually failed to agree on, the contract had indeed continued, but not tacitly, and therefore not for the same original duration etc.
The court considered as follows. It follows from [plaintiff]’s contentions, which boil down to the fact that Emergis did not agree to continue the employment contract for an indefinite period of time and that she, [plaintiff], did not agree to a two-month extension, that the employment contract was not continued without contradiction. The fact that Emergis admitted [plaintiff] to work after 31 July 2002 does not alter this.
Regular tacit continuation of employment contract
Thus, according to the Supreme Court, this was not a regular tacit succession of the employment contract by the parties without contradiction. Such succession does occur:
- if the parties have forgotten the end by operation of law and the employee continues to work.
- if the parties know that the contract is coming to an end but make no further arrangements in doing so, while the employee continues to work and is therefore
- apparently allowed by the employer to continue working.
Prior to the extension, negotiations
Supreme Court case law further shows that if new terms were negotiated prior to the extension and no agreement is reached but work continues anyway, the employer can no longer rely on ‘tacit continuation’ of the old contract (under the same terms of employment).
Neither party commented on the extension of employment contract
In ECLI:NL:RBROT:2021:4740, the Rotterdam District Court ruled that if the content of a new contract has been discussed with the employee, there is no tacit continuation. This is only possible if neither party has commented on the renewal of the employment contract.
In short, once an offer has been discussed with an employee on the continuation of his contract, there is already no tacit extension. That means that not all things from the old contract, such as, for example, a non-competition clause, are still valid between the parties.
As soon as employer and employee talk about a possible new contract, or negotiate about it but do not otherwise reach an agreement, the old contract does not automatically remain in force if nothing else is agreed and the employee simply continues to work and be paid for it.
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