Update Dutch employment contracts as per 2015

As per 1 January 2015, the Netherlands introduced new legislation with respect to labour contracts.

At Dolk Hesper we often help foreign companies to hire their first staff upon start-up in the Netherlands. In this process we work together with several experienced labour lawyers.

In this blogpost, we want to share our understanding of the most important changes in Dutch labour law:

Notice of termination labour contract

Up until 2015, an employment contract for a definite period of time terminated automatically. No written notice of termination needed to be given and no severance compensation needed to be paid. However, from 1 July 2015 this will change for employment contracts for a definite period of time of 6 months or more. The employer needs to notify the employee in writing ultimately 1 month in advance that the employment contract shall either terminate automatically or if the employer wishes to extend the employment contract, under which conditions this extension is offered. A failure on the part of the employer to do so will result in damages on the part of the employer, amounting to 1 gross monthly salary (if no notification is given), or the salary over the period of delay (if notification was not given in a timely manner).

To avoid confusion: this notification is not to be confused with notice of termination. In other words, a failure to provide (timely) notification to the employee does not prevent the employment contract for a definite period of time from terminating by operation of the law upon expiry of the contractual term; it ╩╣merely╩╣ results in an obligation to pay damages to the employee.

What to do?

Keep an overview of the expiry dates of their employees contracts and the deadline for sending a notification. Also, have a standard notice letter in place.

Trial period in labour contracts

As per 1 January 2015 fixed-term labour contracts for 6 months or shorter can no longer contain a trial period.

What to do?

If you want a trial period for your first employees, either offer a contract for 9 or 12 months (with 1 month trial period), or a short contract of 3 months.

 

Competition clause in labour contracts

As per 1 January 2015 it is only advisable to take up competition clauses for permanent labour contracts. For fixed-term contracts, the employer must show very strong business reasons that must be taken up in the written competition clause.

What to do?

If a competition clause is crucial for your type of business, it might be best in your case to offer a permanent labour contract to your first employee.

 

Automatic conversion into permanent labour contract

As per 1 January 2015, a permanent labour contract comes into being when 1) the fourth contract commences, or 2) when the period of two years is exceeded. However, one fixed-term contract with a longer term than two years is still possible.

What to do?

Keep an overview of the labour contracts that you offer your employees with expiry dates.

 

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