Fixed-term employment agreements: new rules for notification of termination

The Legal Expat Desk (LED) is an information hub by GMW Advocaten, advising the expat community living and working in the Netherlands since 2006. LED regularly publish articles covering a wide spectrum of legal topics.

In the article "Working in the Netherlands: changes to Dutch labour law" dated December 11, 2014, I pointed out changes in Dutch employment law for 2015. The first changes have come into force per January 1.

In this article, I will go into greater detail on the introduction of new rules regarding notification of termination.

An overview of the notification requirement

The notification of termination is a statutory obligation for the employer. It means that the employer has to notify the employee, when that employee has signed an employment agreement for a fixed period of time, on whether the agreement will be extended.

The obligation of notification applies to fixed-term employment agreements for a period of six months or longer, and does not apply to a fixed-term agreement in which the end date is not set on a calendar date (for example, an agreement on the duration of a project).

The term of notification is statutory, requiring a minimum term of one month. The obligation consists of the following:

1. The employer notifies the employee in writing (e-mail is considered sufficient) at least one month before the end date of the employment agreement;

2. In which the employer informs the employee whether his employment is extended;

3. And if so, under which conditions.

Transitory law

The new law has a transitory provision: the obligation to notify the employee does not apply to employment agreements which expire within a month from January 1, 2015. This prevents the obligation from arising before the new law actually comes into force.

However, an employer has to notify employees whose employment agreements are scheduled to end on February 1 or later. This means that if your employment agreement ends on February 1, your employer should have notified you by January 1, 2015, at the latest.

Consequences when the notification is not (fully) applied

When the employer does not comply with these obligations fully, the employment agreement still ends on the date agreed upon - unless the agreement is (tacitly) extended. 

In this case, the employee can claim compensation, which equals the employee’s salary over each day the employer is too late with the notification. The maximum amount the employee can claim is therefore one monthly salary.

This applies to every (extended) employment agreement for a fixed period of time. For example, when the employer extends the employment agreement twice, in both cases without giving notice, the imposed sanction is twice a monthly salary.

Lapse of the entitlement to compensation

The employee has to assert his right to compensation within two months from the end date as agreed upon in the fixed-term employment agreement. If he fails to do so within this statutory term, the entitlement to this compensation lapses.

Thus: when the employer does not inform the employee whether his employment is extended, and the employee does not claim the compensation within two months after the end date as agreed upon, the employer does not have to pay any compensation. This is especially conceivable in case the employment agreement is tacitly extended.

Please note that when this is the case, the old employment conditions remain in force, with the proviso that the extension will be for one year at a maximum.

Willemijn Lenders is specialised in employment law at GMW Advocaten / Legal Expat Desk. For more information, please comment below.