Employment Contracts in the Netherlands

Get a solid understanding of the essentials when creating an employment contract under Dutch law.

At Fennek Advocaten, we understand the importance of having well-crafted employment contracts that meet legal requirements and ensure a harmonious working relationship between employers and employees. In this comprehensive guide, we will provide you with all the essential information you need to know about employment contracts in the Netherlands. Whether you are an employer or an employee, this article will help you navigate the intricacies of Dutch employment law and create valid contracts that foster a positive work environment.

Fixed-Term and Permanent Contracts in the Netherlands: Choosing the Right Path

When it comes to employment contracts in the Netherlands, there are two primary options: fixed-term contracts and permanent contracts. Let's take a closer look at each of these options to understand their implications.

Fixed-Term Contracts under Dutch Law: Flexibility and Legal Boundaries

A fixed-term contract, also known as a temporary contract, provides flexibility to both employers and employees. It has a predefined duration and ends automatically upon reaching the contract's expiration date. As an employer, you can offer fixed-term contracts for various reasons, such as seasonal work, project-based assignments, or replacing temporarily absent employees.

It's important to note that you cannot extend temporary contracts indefinitely. According to Dutch law, an employee must receive a permanent contract after three consecutive temporary contracts or after three years of temporary employment. However, exceptions can be made based on agreements stated in the Collective Labour Agreement (CAO). To ensure compliance, it's crucial to understand the concept of consecutive contracts and the specific conditions that apply.

Permanent Contracts: Stability and Long-Term Commitment

A permanent contract, also known as an indefinite contract, offers stability and long-term commitment. Unlike fixed-term contracts, permanent contracts have no predetermined end date. They provide employees with a sense of security and ensure continuity in the employment relationship. As an employer, offering permanent contracts can help attract and retain talented individuals who seek stability and career development.

Essential Elements of an Employment Contract under Dutch Law

To ensure a transparent and legally compliant employment relationship, it is vital to include specific information in the employment contract. Here are the essential elements that should be clearly outlined:

1. Identifying Parties and Work Location

The employment contract should clearly state the name and place of residence of both the employer and the employee. Additionally, if your company has multiple locations, specify whether the employee has multiple workplaces or the freedom to choose their place of work.

2. Job Description and Working Hours

Describe the employee's job or the nature of the work in detail. Clearly state the usual working hours per day or per week. If applicable, provide information on working overtime, swapping shifts, and any arrangements related to irregular working times.

3. Salary Details and Payment Terms

Include the salary amount, components of the salary, and specify how and when the salary will be paid. If there are fixed and variable hours or salary rates for working overtime, clearly outline these provisions. Additionally, address any holiday allowances and entitlements.

4. Duration and Type of Employment Contract

Specify whether the contract is for a fixed term or an indefinite period. If it is a fixed-term contract, mention the contract's duration. Furthermore, clarify the type of employment contract, such as temporary employment, payroll agreement, or permanent contract.

5. Additional Provisions in a Dutch Employment Contract

Depending on the circumstances and applicable regulations, consider including additional provisions in the employment contract. These may include the duration and conditions of a trial period, training entitlements, pension details, non-compete or non-solicitation clauses, and provisions related to ancillary activities.

6. Equal Treatment and Non-Discrimination in Dutch Law

Emphasize the importance of equal treatment and non-discrimination in the workplace. Clearly state that all employees must be treated and paid equally, and that working conditions should be the same for all employees. Highlight that discrimination based on religion, beliefs, political opinions, race, gender, age, disabilities, or any other grounds is unlawful.

Ensuring Compliance and Addressing Employee Requests

As an employer, it's crucial to be responsive to your employees' needs and comply with their legitimate requests. Here are some common situations that may require adjustments to the employment agreement:

1. Request for Changes in Working Hours or Workplace

If an employee requests to work more or fewer hours, change their working hours, or switch their workplace, they must submit a written request. As an employer, you are required to respond to this request within one month. Small employers with up to 10 employees have a maximum response time of three months. Failing to respond within the specified timeframe means you must agree to the requested changes and modify the employment contract accordingly.

2. Request fora More Dependable Employment Agreement

If an employee seeks a more dependable employment agreement, such as a permanent contract, they can submit a written request. Responding to this request promptly is essential to maintain a transparent employer-employee relationship and ensure compliance with the law.

Ancillary Activities: Rights and Limitations

In the Netherlands, employees generally have the right to engage in ancillary activities outside their primary employment. However, there are circumstances where employers can prohibit such activities. Objective justifications for imposing restrictions include:

• Ensuring health and safety

• Protecting confidential company information

• Safeguarding the integrity of government services

• Addressing violations of legal regulations

• Preventing conflicts of interest

Education: Empowering Your Employees

Investing in your employees' education is not only beneficial for their professional growth but also advantageous for your organization. Here are two scenarios where funding employee education is required:

1. Collective Labour Agreement (CAO) Requirement

If your company's Collective Labour Agreement stipulates that employees are entitled to education, you must fund their training. This requirement applies regardless of the employee's position or the specific CAO provisions.

2. Essential for Job Performance or Continued Employment

When education is necessary for an employee to perform their job effectively or to ensure their continued employment after a position termination, you are obliged to fund their education. This obligation applies regardless of the existence of a relevant CAO provision.

It's important to note that you cannot add a refund scheme for education in the employment contract if you are already required by law or CAO to provide it.

Conclusion

Crafting well-structured and legally compliant employment contracts is crucial for both employers and employees in the Netherlands. By following the guidelines and provisions outlined in this comprehensive guide, you can establish a solid foundation for a harmonious employer-employee relationship.

At Fennek Advocaten, we understand the complexities of Dutch employment law and are here to support you in creating robust employment contracts that meet all legal requirements. For further advice or assistance, please contact us.

Disclaimer: This article is provided for informational purposes only and does not constitute legal advice. For specific guidance on your situation, I recommend consulting with a qualified professional.