9 Important aspects of Dutch employment law

28 juli 2021

Are you an employee in the Netherlands, or are you planning to work under Dutch law? Scroll down to view the list of 9 important aspects of Dutch employment law.

Dutch employment law

1. Fixed term or indefinite term

Employees are very well protected under Dutch law. It is not at all easy for an employer to terminate an employment contract. In short, there are two contract options: a contract for an indefinite period, or a fixed term contract. The latter expires automatically on the agreed end date. A contract for an indefinite period can only be terminated by the employer based on permission from the Employee Insurance Agency (UWV) or the court, mutual consent, or urgent cause for dismissal with immediate effect. The same applies to the termination of a fixed term contract before the end date. Because of this high level of protection, employers often want to work with (short) fixed term contracts initially. 

2. Maximum fixed term contracts

It is not possible to enter into many fixed term contracts with the same employer. After 36 months your employment contract automatically reverts into an indefinite employment. This is a result of the Dutch ‘chain regulation’. Also, if the employment has not lasted 36 months yet, the fourth fixed term contract between the same parties automatically reverts into an indefinite employment. 

3. Minimum wage

Under Dutch law you have the right to earn the statutory minimum wage, as well as 8% holiday pay. For 2021 employees older than 21 must receive € 1.701,- gross per month, excl. holiday pay, for a fulltime workweek. 

4. Probation period

A probation period can only be agreed upon in a contract for an indefinite period, or in a fixed term contract which lasts 6 months or more. Therefore, employers often choose a minimum duration of 7 months for the fixed term contract. 

5. Incapacity for work 

During sickness or injury you have the right to receive a minimum pay from your employer of 70% of your salary during 104 weeks. You and your employer must observe all rules and regulations with regards to your reintegration. It is not allowed to terminate an employment contract of an employee who is unfit for work due to sickness or injury, or during pregnancy and maternity leave. 

6. Failure to give notice

Based on Dutch law you are entitled to receive notice about extension or termination of a fixed term contract one month before the end date of the contract. If you are not informed on time, a penalty of a maximum of one month’s salary is to be paid to you by your employer. 

7. Transition fee

If the employer wishes to terminate your employment contract – either by not extending a fixed term contract, after initiating a dismissal procedure or even during a probation period – you are entitled to receive a statutory transition fee. This amounts to 1/3 month’s salary for each year of employment.  

8. Post-employment restrictions

Under Dutch law it is only possible to impose post-employment restrictions on an employee with a fixed term contract, if the contract includes the specific compelling business reasons for doing so. These reasons need to be specified per contract, for each employee in their specific role. Often the clause in the contract does not meet these standards, making it invalid.

9. Unemployment benefits

If you have worked in the Netherlands on the basis of an employment contract you can request unemployment benefits at the UWV. In order to receive them, there are several requirements. For instance, you need to continue applying for a new job, you must have worked at least 26 weeks in the past 36 weeks, you need to have your residence in the Netherlands and you must not be culpably unemployed. The benefits will not be granted if you yourself resigned from your previous job.

Hopefully now you know more about Dutch employment law. But please note that there are many more rights and obligations to be aware of. Some of which might be included in an applicable collective labor agreement. If you wish to learn more, feel free to contact me. Or visit this website.

Are you an employer with workers in the Netherlands? Or planning to hire employees under Dutch law? Please click here to read the blog that’s written especially for you.