10 things to check before signing an employment contract

The Legal Expat Desk (LED) is an information hub by GMW lawyers, advising the international community in the Netherlands since 2006. LED regularly publishes articles covering a wide range of legal topics.

Both employment law and norms vary greatly from country to country. What is normal in the Netherlands may be weird in your home country or the last country you worked in. In our experience, internationals often find their Dutch employment contracts and Dutch employment law confusing. So, what do you need to look out for when your future potential employer sends you a draft contract?

Temporary or permanent contract

Are you being offered a temporary contract or a permanent contract? Preferably, you want a permanent contract, as this is the one that gives employees the most protection.

A permanent contract can only be terminated if the employee chooses to give notice, if the parties reach an amicable termination of the employment agreement or the Dutch court or UWV (the Netherlands Employees Insurance Agency) gives permission. In other words, a permanent contract gives you lots of protection.

An employer cannot simply unilaterally end your employment agreement. They may, however, end the contract during your probationary period. This period cannot last longer than two months.

If you are offered a temporary (or definite) contract, and of course this happens often, keep the following in mind: the 3x2x6 rule applies. A maximum of three definite contracts is allowed, in a period of two years, unless six months have passed between the last two contracts. After this, the contract becomes a permanent one.

Probationary period

The probationary period differs depending on the contract you have. The rules are as follows:

• 0-6 months contract: No probation period. 
• 6-24 months contract: A one-month probation period is allowed. 
• 24+ months contract: A two-month probation period is allowed. 

If these rules are not followed, the probationary period is not valid and unilateral dismissal is not allowed.

Notice period

An employee may, of course, always give notice and end the agreement. However, an employee must adhere to the notice period, either the statutory notice period or the contractual one. The statutory notice period is always one month for the employee.

For the employer, the notice period they can give you depends on your years of service. For less than five years of service, the employer must give one months’ notice, for between five and 10 years it is two months’ notice, between 10 and 15 years it is three months and for more than 15 years of service, the notice period is four months.

Parties are allowed to agree upon another notice period, but the employer’s notice period must be double that of the employee and an employee’s notice period may never be longer than six months.

Job description

Make sure you receive a job description before you start working, so you know what’s expected and what you're going to be held accountable for.

Working hours

A full-time job is normally 40 hours per week. Sometimes an employer expects you to work more hours and not get paid for them. Do take note of this. It is also common in the Netherlands to work fewer than 40 hours per week for a reduced salary.

Holiday pay

On top of the gross base salary, Dutch employers must pay an eight percent so-called “holiday allowance”. This is required by law.

Compulsory holidays

In the Netherlands, an employer must grant an employee at least 20 holiday days if the employee is working full time. But, 25 days is typical, excluding official holidays such as Christmas. Don't forget to ask for payment of outstanding days at the end of the employment agreement.

Pension

A pension is not a right. Most employers offer a pension to their employees but, generally speaking, it is not an obligation.

Illness

This is one of the most important issues in Dutch employment law. First, an employer cannot dismiss an employee during the first two years of sickness. Second, an employee retains the rights to receive a salary.

The law states that the employer has to pay at least 70 percent of the last salary which the employee received before becoming ill. It is quite common here for employers to continue paying 100 percent of an employee's salary during sickness, often for the first six months or year.

During illness, an employee must meet a number of requirements, in particular, they are expected to do their best to get well as soon as possible.

Discussions can arise between an employer and an employee over whether the employee is ill or not. If this happens, always ask for an appointment with the company doctor. This doctor is the only person who can decide whether you have the right to stay at home and get paid your salary or not. The employer does not have this right.

Post-contractual obligations

Make sure that you take into account other clauses in an employment contract. These can include a confidentiality clause, which prevents an employee from sharing proprietary information, or a non-solicit clause, which means that an employee cannot try to entice their colleagues to leave for another company.

Also, there may be a non-compete and relations clause. This clause may prevent an employee from working in the same field or for a competitor. Employees in my practice often think a non-compete will not be upheld strictly at the end of an employment agreement and this is not the case. Therefore, try to negotiate the non-compete.

Since January 1, 2015, a non-compete clause is not allowed in contracts which have a definite term unless the employer can explain that this is necessary due to urgent business reasons. Try and limit the non- compete to no longer than six months or one year. Sometimes employers make the non-compete two years and judges normally find that too long.

Employment contracts can be difficult to understand and may involve complicated employment law. If you have any questions about your contract or want your contract to be reviewed, please contact GMW advocaten via the form below.