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Dutch employment law: Negotiating and ending an employment contract

Dutch employment law: Negotiating and ending an employment contract

Dutch employment law: Negotiating and ending an employment contract

Alex van den Heuvel, founder of Van den Heuvel Arbeidsrechtjuristen in The Hague, discusses the ins and outs of Dutch employment contracts. 

If you work for a Dutch employer, or your contract is otherwise subject to Dutch employment law, there are a number of matters to think about when negotiating a contract.

Collective agreements (cao)

In many cases, employers are subject to collective agreements, or "cao’s", which cover working conditions and benefits. If a cao applies to the employer, an employee does not need to be a union member to have it apply to him or her as well, as long as an explicit article is incorporated in the employment contract making the cao applicable. If no cao is applicable, the employee will need to negotiate his or her own terms and conditions.

An employment contract must contain at least the following information: name / address of the employer and employee, work location, job title and description, start / end dates (open-ended in case of indefinite contracts), trial period (if any), hours of work, salary and other expenses, and a notice of termination clause for both parties.

Within the limits of the law, parties are free to decide what will be covered by the contract.

Temporary contracts and indefinite contracts

Temporary contracts have a clear start and end date. The contract ends by operation of law at the given date, without notice or an official dismissal procedure needed. Temporary contracts cannot be terminated without consequences - usually payment of salary until the end of the contract - unless they contain a specific clause allowing for an early ending, in which case both parties need to observe the statutory notice period.

If it is the employer who wishes to end the employment prematurely, they will have to obtain permission (either from the UWV or the court, see below). Indefinite contracts are always subject to official dismissal approval.

Zero-hour contracts

Pay attention when it comes to zero-hour contracts. Under these contracts the employee only gets paid for the shifts that he/she is asked to work. This could be, for example, only when there is incidental work available. There are limitations to the freedom that the employer has under these contracts.

For example, each time an employee is asked to work, even if it's for only one or two hours, a minimum of three hours salary has to be paid. After six months an obligation to continue salary payments arises and the employee may claim a fixed-hours salary, based on the average amount of hours the employee has been working over the past three or more months.

From temporary to indefinite - the "contract chain"

Dutch employment law aims to stimulate the transition from temporary into indefinite employment.

It does this by stipulating that an indefinite contract exists by operation of law after three contracts have been issued with interruption periods between contracts of no longer than six months - a fourth contract then automatically becomes indefinite. Or after two years of being in service - after which the employee is considered to be in indefinite service by operation of law.

Trial period

No probation period is allowed for contracts of less than six months. For contracts between six months and two years, a probation period of one month is allowed. For indefinite contracts or contracts of more than two years, a maximum probation period of two months is allowed.

Notice period

Notice is given per the end of the month. The length of notice an employee receives is dependent upon how long they have been working for the company. A one month notice period needs to be given to employees who have been in service for less than 5 years, two months for employment of 5-10 years, three months for 10-15 years and four months for an employment service of longer than 15 years.

For the employee, this is different. If an employee wishes to leave a job the notice period is usually one month. If that notice period is extended, which needs to be done in writing (in the contract) and for a period of no longer than six months, the notice period for the employer should be double the notice period of the employee.

Non-competition clause

Non-competition clauses are, in principle, no longer allowed in temporary contracts. If there is a need to incorporate one nonetheless, the rule of exception is that it has to be accompanied by a detailed explanation and tailored to the specific function. Due to the complexity of this rule, it is well advised to consult a legal specialist.

Sickness

Employers should be aware, that under Dutch law, an employee who becomes sick has the right to the continuation of their salary payment during sickness for a maximum of two years.

Ending a contract

A contract can be ended by mutual consent of both parties, usually through a termination agreement. Parties are, within the limits of the law, free to negotiate their termination conditions. Both parties should consult with a lawyer before entering into a termination agreement.

In case of temporary contracts with an early cancellation clause and indefinite contracts, employees may resign, observing the statutory notice period.

Employers may dismiss an employee for a range of reasons, but not without permission from the relevant authorities. In the case of reorganisations due to business economic reasons or after two years of sickness, permission to dismiss an employee needs to be requested from the employee insurance agency UWV.

If the reason to dismiss an employee is based on personal grounds (e.g. dysfunction, or a seriously disturbed employment relationship), then the employer needs to submit a request to the court to dissolve the employment contract.

Immediate dismissal, without the approval of these authorities, is only allowed in cases of gross misconduct of such a nature that the employer cannot be asked to continue the employment relationship. Courts are, however, very strict about accepting such dismissals. It is therefore advisable to contact a legal expert before doing so, or after receiving such a dismissal.

The notification obligation (aanzegtermijn)

Please note, regarding temporary contracts of six months or longer, an employer is obligated to inform the employee at least one month before the end date of their contract whether it will be extended or not. Not doing so is subject to a fine, payable to the employee, of a maximum of one month’s salary, or a pro rata part.

Severance pay (transitievergoeding)

Every employee whose employment service has lasted at least two years and whose employment contract is terminated by the employer, not due to certain reproachable behaviour of the employee, has the right to receive severance pay, the so-called "transitievergoeding", this is 1/6th of the monthly salary received per six months of service for the first 10 years and 1/4th for the years thereafter.

Certain exceptions exist, such as a limitation on the severance pay for small employers (less than 25 employees) and higher severance pay for employees aged 50+.

Please note, severance pay is capped at 75.000 euros.

Van den Heuvel Arbeidsrechtjuristen specialises in Dutch and European employment law, including the employment aspects of alien/immigration law.

You can contact Van Den Heuvel for matters such as the drafting of employment contracts, dismissals, sickness, non-competition clauses, work permits and more. 

Van den Heuvel Arbeidsrechtjuristen

 

Alexander van den Heuvel

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Alexander van den Heuvel

Alex van den Heuvel is an experienced legal expert, graduated cum laude from the University of Utrecht and has a previous professional background of years working for large national and...

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COMMENTS

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Ginka 20:57 | 16 February 2019

how can one person defend against a company, if they want to get rid of me with all means?

Alex Heuvel 14:57 | 17 February 2019

Dear Ginka, in Holland the law is designed to protect the employee primarily. There are therefore different ways to get the UWV or judge to reject a company's petition for dismissal. If you need assistance and advice, you are welcome to contact my office and explain your issue to me directly, and we can see what we can do. Kind regards, Alex van den Heuvel

Jose Luis Gomez 08:58 | 29 March 2019

Hello, I have a question, I am a temporary worker in Nederland, I have a contract in phase A, but I want to come back to my country, what i have to do if I want to finish before?

Alex Heuvel 14:25 | 1 April 2019

Dear mr. Gomez, you normally can always resign a phase A temp contract at a manpower company, with the period of notice you should give mentioned in your employment contract. But check the particulars of your employment contract and check with your manpower company what their exact conditions are (usually notice period of a week with phase a contracts). If you need more specific assistance, I would refer you to my office and my office email. Kind regards

SunGreen 16:53 | 16 April 2019

Dear Alex, Thank you very much for a very useful article. I have a question. In the university CAO the notice period for a temporary contract is 3 months for an employee (me). However, I would like to terminate my contract earlier, because I have a new job offer. The HR department said that shortening of a notice period is only possible in consultation with my supervisor. If she disagrees, do I have any other way to leave earlier (even if I need to pay back to university)? Thank you

AvandenHeuvel 17:00 | 16 April 2019

Dear Sungreen, in short the answer is no: the notice period is a legal obligation for both employer and employee. An employee is bound by it, unless the employer agrees to a shorter period. Penalty of violation is payment of the remainder of the notice period. So you could leave earlier, but than they can claim the difference in damages. Kind regards, Alex

SunGreen 17:03 | 16 April 2019

Thank you very much for a clear answer.

Ram Os 03:47 | 1 May 2019

Hello, I have a question, I have a contract for a year, but before I started, the company is telling me that they want to cancel and they are only offering to pay visa expenses, should I ask for missed salary? And how many months would it be OK?

AvandenHeuvel 05:36 | 1 May 2019

If you are still in your trial/ probation period, they can terminate your contract without consequence, if your probation period has passed, they are not allowed to cancel and need court permission, do NOT consent I advise you, seek legal assistance. If you contact me through my office contact information (see my website and email) I can assist you further. Kind regards

AvandenHeuvel 05:44 | 1 May 2019

So crucial question is: do you have a probation period in your contract. If not, they cant cancel and you’d better seek legal assistance. I can take a look at your situation, which would be advisable anyway. If you want that, contact my office please. Kind regards

Ram Os 17:45 | 1 May 2019

Thank you very much for your answer, there is no probation period in the contract, it only specifies to start in February or since I get the Visa to work in The Netherlands. I am still not in The Netherlands to finalize the Visa process

AvandenHeuvel 18:42 | 1 May 2019

if there is no probation, they cannot cancel your contract and may need to pay you a yera’s salary. I strongly advise you to seek legal aud to secure your rughts. You can contect me for that through my office

Náyade Jiménez 19:30 | 13 May 2019

I have been working for my employer since September 2018 with a zero-hour contract. On november 2018 my contract was renewed with termination date: 01-11-2018. I had a misunderstanding with one of my colleagues yesterday night and from my point of view it was not a solid motive of dismissal. The same day I found that all of my shifts for the following week had been removed of the application, that my account of the application had been deactivated, and that I was kicked out of the whatsapp groups where we communicate work issues. I texted my employer asking if I was fired and I had received no answers at all. Is this even legal? Shouldn't I receive a formal notice 1 month in advance of termination of contract? Can I claim them to work this month with the average hours i have been working per month since I have been working for them more than six months? Thank you

AvandenHeuvel 21:05 | 13 May 2019

Dear Nayade, in order to answer your question I would first have to see your employment contract. Your termination date appears strange: in November 2018 they gave you a contract that ended on the first of that same month? Please contact me on my office email (info@vandenheuveljuristen.nl) and then I can take a look at your case and inform you of estimated costs. Kind regards

AdamJohn 21:55 | 14 May 2019

Hi, I came to the Netherlands as a highly skilled migrant around one month ago. I have "REGULIER BEPAALDE TIJD" residence permit and a one year contract with one month probation period. If I terminate my contract within my probation period, am I still eligible to stay in the Nethelands?

AvandenHeuvel 22:04 | 14 May 2019

Short answer: no you are not, since the reason why IND gave you a permit is no longer there: your work at that particular company. If you leave your job or get dismissed, whether within or outside of your probation period, you will have 3 months to find new work, otherwise you definitely lose residence right.

AdamJohn 22:22 | 14 May 2019

Thank you for your answer. So it means I still have 3 months to find a new job, Right? Also I started working for that company 2 weeks earlier than what I signed on the contract. How probation last day will be calculated? From the date that I started working or from the date that is in the contract?

AvandenHeuvel 23:40 | 14 May 2019

Dear Adam, from the day you started working.

juliabbb 11:58 | 3 June 2019

Hi, I’m going to leave my company after a (2 weeks) period of Sickness (anxiety and panic attack Caused mainly but the situation at work) Talking with the arbo advisors they “suggested” me to quit with an agreement. I have a 6months contract that ends in November. Talking with my manager she told me to “think about how I want to leave” but I don’t know which are the possibilities here. There is something that I have/I can negotiate in this situation? Thanks in advance

AvandenHeuvel 12:02 | 3 June 2019

Dear Juliabbb, If you have a fixed term contract it could potentially cost you a lot of money to quit (potential obligation to pay your employer an amount that is equal to salary till November), depending on what is agreed in your contract. Your employer could claim that money in certain cases. I would let myself be guided by a lawyer here to ensure it is not going to cost you (that much) and perhaps communicate with the employer for you. You can contact me at my office (email: info@vandenheuveljuristen.nl)

david flores 19:57 | 4 June 2019

Hello Mr.Alex, I have a 1 year contract which it’s ending in end of September and I got plan a surgery beginning of September which will take me at least 3months off from work.. can I get dismissed when my contract it’s over(end of September) even if I’m off sick? Or they need to wait for me to get back from my surgery? Thanks

AvandenHeuvel 10:03 | 5 June 2019

Dear David, I will need to see your employment contract just to be sure. You can contact my office (email: info@vandenheuveljuristen.nl )

Tsvetomira Nekova 22:32 | 13 June 2019

Dear Alex, if you had 3 contracts and last one is expiring within 3 weeks, does it mean you have automatically already got into permanent contract with same conditions as your last temporary contract? Thanks a lot in advance for your advise!

AvandenHeuvel 10:22 | 14 June 2019

The 4th contract is automatically a permanent one, or after 2 years service, at 2 year and 1 day you are automatically permanent

Supriyam Srivastava 10:03 | 18 June 2019

What can be the complications if I signed the fixed term offer on mail from a company but due to some reason I can not join the company. What can a be the issues if I decline the offer before joining?

AvandenHeuvel 08:56 | 18 June 2019

Dear Supriyam, that depends on what you agreed in the contract. If you wish you can contact me on my office email and send over the contract. Then I'll read it and tell you

Nicco Komono 14:38 | 10 July 2019

Hi Alexander, I have a temporary contract which should be automatically renew it at the termination (very soon), now I didn't sign any new contract, so if somehow I would like to quit on my last day shall I still need to give a resignation letter to the company? thanks in advance Best regards

AvandenHeuvel 12:27 | 17 July 2019

Dear Nicco, for legal advise you can contact my office (email), and than I can see what I can do. Regards

Pao Constance 15:16 | 10 July 2019

Hi Alexander, I am in my second temporary contract with a company and I received another offer from another company which is better. Can I end my temporary agreement ?

AvandenHeuvel 12:27 | 17 July 2019

Dear Pao, for legal advise you can contact my office (email). then I can see what I can do

Elisy@ 13:42 | 19 August 2019

OK

Loki85 23:26 | 21 August 2019

Hi Alex, I have 2 and half months left on a 6 month contract. The work is causing me mental anguish to the point of anxiety attacks and burnout. The CEO sets unrealistically high expectations and I finally stood up against them and set my own boundaries for my role. This has resulted in getting the cold shoulder from her and ultimately lead to her hiring an HR person to 'help' resolve this. I am told she wants to end the contract early. One thing in the contract were stock options on a vested schedule that was never issued to me. The contract stated these stock options would be issued in a STAK within 2 months of the contract being signed but they never were. I took the job at a much lower salary with the promise of this stock. If I do go for a termination agreement. What are my rights in asking for compensation for the stock options that were promised but never issued? Is she in breach of contract in that regard too? Thanks for any advice you can offer.

Jess_21 15:23 | 14 November 2019

Good evening, if during my month of notice if I am sick, the employer is obliged to pay me until the last day of notice? Does it change if the company is a retail?

Lulu Kruger 19:05 | 15 November 2019

Hi Alex, My partner's contract is ending the end of November. He was given a letter to state that he is exempted from work as from the date of signing that letter during October and he need not come into the office anymore. They said he must use that time to search for another position. He still has the use of the company lease vehicle and laptop to aid him in his search. Can he start working for another company if he finds employment before the end of November? I hope you can assist.

AvandenHeuvel 10:40 | 19 November 2019

Dear Lulu, For personal legal advice you can contact me at my office. Drop me an email and I can see what I can do for you. Kind regards

Barbara Alves B... 20:41 | 20 November 2019

Hi, I had a 3rd extension of 5 months in order to reach the max length of 2 years in my company, however i would like to leave my company before the end of my contract. My first contract of 7months mentioned a 2 months notice and throughout the next 2 contracts. On my (5 months) contract mentions "other terms and conditions of employment remain unchanged ". As I have a 5 month contract is that still applicable or by given 1 month is enough? * My new contract started on the beginning of this month * Found another job thank you

AvandenHeuvel 21:59 | 20 November 2019

Dear Barbara, thank you for contacting me. For personal legal advice you are welcome to contact my office. Regarding the fee for my services, please advise my website. Kind regards,

ExpatZ 18:27 | 21 November 2019

My contract ended last month and I got all my invoices in on time and approved well before the due dates but my accountant tells me the agency has not sent payment (today was payday) and claims that if there is a mistake they will not pay out until next months pay cycle, what can I do and what can I claim?

AvandenHeuvel 14:18 | 25 November 2019

Dear mr./ms., thank you for contacting me. For personal legal advice you are welcome to contact my office. Regarding the fee for my services, please advise my website. Kind regards,

anam83 14:58 | 4 December 2019

Good afternoon Mr. Van den Heuvel. I have two questions: 1-I work in a hotel since 8 January 2018, I had 3 renewals the last of which will expire on 7 March 2020, which means 2 years and 2 months contract. Can my contract be considered for an indefinite period of time at the end of the second year of work? 2-What can I do if my employer does not pay or pays only part of the illness? Thank you for your time.

AvandenHeuvel 14:06 | 10 December 2019

Dear mr./ms., thank you for contacting me. For personal legal advice you are welcome to contact my office. Regarding the fee for my services, please advise my website. Kind regards,

somac 20:08 | 18 December 2019

Thanks for your help and support. I resigned from my present job for some personal concerns after getting a job with Employer “A” in a different city. Presently I am serving the notice period in my present employment. My employment contract with Employer “A” states “First two months is Probation period”. I have already accepted and signed the contract with Employer “A” which starts after my employment contract ends with my present employer. If I get another job (Employer “B”) in my city and accept that offer with a joining date before the 2 months’ probation period ends with Employer “A”, Question 1: Can I terminate the employment contract of Employer “A” without notice within 2 Month (probation period) and start with Employer “B” and continue without any legal problem or impact on our residence and work permit in Netherlands? Question 2: Before I start with Employer A, Can I inform Employer “A” that I do not want to start with Employee “A” ,without any possibilities of legal consequences ?

AvandenHeuvel 09:33 | 20 December 2019

Dear mr./ms., thanks for turning to me for advice. Your situation may legally be a bit complicated, especially since there seems to be residency/workpermit rights involved. I would have to look into your situation. You can contact me through my office (email /tel.). For me fee, please consult my website. Kind regards.

BenceM 12:33 | 16 January 2020

Hello! I would lke to ask, if my phase B contract was ending in 29.12.2019., but my employer just sent me my next contract today (16.01) with a starting date 29.12.2019. it means actually, that i was working without contract till today. Which rights I have in this case? Regards.