The Dutch employment market - Part 2

As many of you will not have moved to the Netherlands on an expat contract governed by your home country laws, the rules that apply to those employed directly by a Dutch employer can be of great importance to you.

Dutch employment law

Even expatriates, whose contract explicitly states that a foreign law applies to the employment relationship, will find that they are subject to mandatory rules of Dutch employment law and / or Dutch rules of public order by means of binding allocation rules of international private law.

For this reason, we include an overview of the main issues contained in this law:

› Probation period

The probation period must always be confirmed in writing in your employment contract. During this probation period, employees can be dismissed or resign with immediate effect.

› Chain contracts

An employment contract for a fixed period terminates automatically by operation of law (van rechtswege) on the agreed end date. It is possible to have three - but not more - separate consecutive fixed-period contracts with one employer if the contracts in total do not exceed the three years permitted by law.

Each contract will end by operation of law. If the intervals between contracts do not exceed three months, or the total duration of all contracts exceeds three years, then the last employment contract is deemed to be a contract for an indefinite period of time, even if it is explicitly stated that it is a fixed contract.

› Terminating an employment contract

The Netherlands has a unique dual system of dismissal. If an employer wishes to terminate an employment agreement for an indefinite period of time, he has two options. His first option is to obtain prior approval from the UWV WERKbedrijf, before serving the notice of termination. The purpose of this procedure is to avoid unreasonable or socially unjustifiable dismissals.

Alternatively, an employer may at any time request the sub-district sector of the District Court to dissolve the employment contract. The request for the dissolution must be on the basis of serious cause, for instance poor performance or redundancy.

› Notice period

When terminating an employment contract for an indefinite period of time, an employer must apply certain predetermined notice periods. In the case of other contract forms, such as a contract of temporary employment (a so-called "temp" contract), termination is / can be with immediate effect.

› Severance payment

There are no statutory rules on severance payment and the court judges the necessity for compensation in each individual case, based on the probably deliberately vague standard of "reasonableness." Severance payment can be granted either as a lump sum, or as a periodically paid supplement to the unemployment benefit or lower wages in the next job.

Foreign temps

Back in September 2005, it was decided that all foreign temps working in the Netherlands ought to have a right to the same basic employment conditions as their Dutch colleagues.

Protection labour market

When applying for a work permit or a residence permit as a so-called highly skilled migrant, beware of the stringent legal protection of the Dutch labour market, making it difficult for non-EU / EEA / Swiss nationals to receive such a permit.

For EU nationals (with the exception of EU nationals from Romania and Bulgaria) as well as EEA and Swiss nationals, freedom of movement applies, in keeping with the Freedom of Labor Act (Wet Arbeid Vreemdelingen, or WAV).

This means that, when seeking to fill a job opening, employers in the Netherlands should search not only the Dutch labour market, but the entire EU / EEA labour market, before endeavouring to employ someone from outside this market.

Being a native speaker of a particular language will no longer automatically qualify you, if the Dutch authorities are of the opinion that your prospective employer should be able to find a Dutch / EU / EEA / Swiss employee who can also speak your language.

Please also note that when faced with the choice, the employer, who will be the one applying for your work permit, might well choose an employee who does not need a work permit over you (if you do need one) - as the application process is an expensive and time-consuming one. This is, without a doubt, unfair - yet something you should realistically take into account.

With any luck, the new regulations, aimed at simplifying and shortening this procedure, will succeed in levelling this aspect of the playing field.

Salaries in the Netherlands

Salaries in the Netherlands are always commensurate with the general cost of living and pay parity is generally only reached at very senior management levels. However, you will find that, in fact, the net wages are comparable as most expenses and some allowances are tax-exempt.

Citizen service number

Everyone who is employed legally has a "social-fiscal" number - the Citizen Service Number (burgerservicenummer) - for tax purposes. Without this number, your employer cannot properly pay out your salary for tax purposes or credit your contributions for your benefits. As of January 1, 2006, also expat family members need to obtain a Citizen Service Number.
 

This is the second part of the "The Dutch Employment Market" article written by Stephanie Dijkstra, editor-in-chief of The XPat Journal. Have a look at the current issue or subscribe here.
 

Previous in the Series
› The Dutch Employment Market - Part 1 (Sectors, Dutch language, Women in the workforce)