Working in the Netherlands: changes to Dutch labour law

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.

The Dutch labour law is about to change drastically. The first changes will come into force on January 1, 2015. Other changes will come into effect as of July 1, 2015. Here is an overview of the most important alterations that will affect employees in the Netherlands.

Trial period

A trial period in fixed-term contracts of six months or less will be prohibited. This prohibition will be applicable to contracts that will commence after January 1, 2015.

Non-competition clause

A non-competition clause in fixed-term contracts will be prohibited as well, unless the contract specifies the necessity of such a clause in light of severe company interests. This is applicable to all contracts that are entered into after January 1, 2015.

Notification of termination

One month before the termination of a fixed-term contract (of six months or longer), an employer must notify the employee in writing whether the employment agreement will be extended or not.

If the employer does not notify you, you are entitled to an amount equal to the salary over the period the employer should have given notice of the termination of the employment agreement, up to a maximum of one month’s salary.

This obligation will enter into force immediately on January 1, 2015, so will also apply to already existing contracts that will expire after the start of 2015.

Conversion in an employment agreement for indefinite time

Under current regulations, an employee can be employed on a fixed-term contract three times and/or for a period of no more than three years. This cycle is cancelled when there a period of at least three months and one day between consecutive contracts.

As of July 1, 2015 this article will be changed in a way that an employment agreement for an indefinite period will occur automatically when:
› A maximum of three contracts is exceeded;
› The maximum time frame of two years is exceeded;
› In both of the above mentioned situations a period of no more than six months and one day has passed between consecutive contracts.

Transition allowance

As of July 1, 2015 the "transition allowance" is introduced. This compensation replaces the current severance payment in case an employment agreement is terminated.

You are entitled to this allowance in cases when the employer initiated the termination of the employment agreement, plus the total duration of the employment agreement exceeds 24 months.

The transition allowance will be calculated as follows:
› For every year of service less than 10 years, the employee receives one third of his monthly salary.
› For every year of service that exceeds 10 years, half of his monthly salary is granted.
› When the employee is older than 50 years, he is entitled to one monthly salary for every year of service that exceeds 10 years.
A maximum of 75.000 euros in total applies, unless the employee’s yearly salary exceeds this amount, in which case this higher amount counts as maximum.

Reconsideration period

In case of amicable termination (mutual consent, settlement agreement), a reconsideration period of 14 days will be introduced per July 1, 2015, on behalf of the employee. Within those 14 days, the employee may withdraw his consent, which leads to continuation of the employment agreement or reopens negotiations.

The employer is obliged to inform the employee about this possibility. If he doesn’t, the reconsideration period is extended to three weeks.

A final note

This article gives a broad overview of the planned changes to Dutch labour law, however it does not cover all details exhaustively.

If you are unsure whether the clauses taken up in your employment agreement are legally valid; or if you want to know more about your entitlements in case the employer intends to terminate the employment agreement, then do not hesitate to get legal advice to be ensured about your legal position.
 

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