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About employment contracts

Your legal rights and obligations differ according to the type of employment contract you have. The basic principles of the different contractual options are explained below.

Three common labor contractual options

  • Temporary labor contract
  • Permanent labor contract
  • Contract with an employment agency

Any contract should include:

  • Name and address of the employer and employee and where you will be working.
  • Job title and job description.
  • Start/end dates. Contracts can be of fixed length (should include start and end dates), or indeterminate length (contract end with notice).
  • Trial period (if any). If the contract is for less than two years, the trial period is generally one month (unless agreed otherwise with the CAO, but the maximum is two months).
  • Number of hours of work.
  • Salary and other expenses.
  • Notice period for termination for both you and your employer.
  • Temporary labor contract

Temporary labor contract

A temporary contract has a start date and end date. The contract will end on the agreed date without a dismissal procedure. We strongly advise you to make sure that you get the contract in writing, although a verbal agreement is also valid in the Netherlands. The employer is obliged to inform you in writing of the main issues covered in the contract within one month after the start date. Within legal limits, both employers and employees are free to decide what will be covered by the contract. As of 1 January 2015, a trial period for any temporary contract under six months is prohibited. If the employer wants to include a trial period, then the contract must be longer than six months. For example, a seven-month contract with a trial period of one month is allowed. For all employment contracts concluded for longer than six months, it is obligatory for the employer to give notice to the employee if the employer does not intend to extend the contract. If the employer does wish to extend the contract, then the employer must also notify the employee of the terms and conditions for extension. From 1 July 2015, a new law will come into effect (Flexwet), which aims to limit the gap between flexible and permanent employment. Hiring the same employ­ee for more than two years on consecutive temporary contracts is no longer permitted. After two years of temporary contracts, or when a fourth contract is offered, the presented new contract must be of a permanent nature. It is only possible to prevent a change from a temporary to a permanent contract if there is a man­datory period of at least six months between the two contracts. Otherwise it is legally viewed as one con­tract with consecutive days. Prior to 1 July 2015, this mandatory period is three months.

Permanent labor contract

A permanent labor contract can be ended by one of the parties. The legal “term of notice” need to be respected. The rules are different for employers and employees. The employee has the legal right to end the contract without a procedure but he must respect the legal and agreed period, which is usually a minimum of one month’s notice. Prior to 2015, the dismissal of any employee was au­dited by the UWV (Employee Insurance Agency) or the district court in regards to whether the dismissal was legally valid. As of 1 January 2015, employers can only opt for one dismissal route and which route is taken depends on the specific reason for the dismissal:

  • Redundancy (e.g. business economic reasons, reorganization) or long-term disability – audited by UWV WERKbedrijf
  • Dismissal on personal grounds (underperformance, culpable behavior, strained employment relationship etc.) – audited by the Subdistrict Court

In contrast with the current situation, it will be possible to appeal against the decisions of both the UWV WERKbedrijf and the subdistrict court. In addition, the employer may terminate the employment agreement with the consent of the employee. The possibility to terminate the contract by mutual consent will remain in place. Yet, under new legislation the employee will have a period of 14 days to withdraw or to rescind its cooperation with the termination by mutual consent. The employer must notify the employee of this possibility in writing within two days after the employee has given his consent.

Contract with an employment agency

The contract with an employment agency (uitzendbureau) differs fundamentally from a contract with an employer described above. The employment agency is your legal employer while you work in a company that hires you from the employment agency. In particular, your protection against dismissal during a certain temporary period is not regulated. On the other hand, both you and the company you are working for can terminate your employment at any given time during the agreed employment period. Employment agencies have their own Collective Labor Agreement. There is an “Allocation of Workers by Intermediaries Act” (Wet Arbeidsbemiddeling en Allocatie door Intermediairs) that regulates issues related to employment agencies, for example:

  • Employment agency employers are prohibited from charging temporary workers money (or any other consideration) for being given temporary work.
  • Employment agencies must inform temporary workers in writing about the working conditions at the place of work in advance.

For expert assistance:  Pallas Attorneys-at-Law