Dutch contracts and employment law
Dutch laws covering employment and contracts in the Netherlands are many and various. Here are some expert tips on negotiating your employment contract.
The laws covering employment in the Netherlands are many and various. Your personal contract will determine your pay and specific conditions. Dutch legislation covers key areas such as trial periods, holidays, notice and dismissal, minimum wages, health and safety, and equal treatment. The system for dismissal is particularly unusual in being so protective of employees: in most cases the employer needs permission from the UWV WERKbedrijf or the court to fire you. Useful information regarding working practices, employment law and the minimum wage can be found on the Ministry of Social Affairs and Employment website (www.szw.nl) or the UWV WERKbedrijf website (www.werk.nl).
If you want to check the market rate for your salary or calculate bruto/netto rates (before/after tax and social security deductions), try www.loonwijzer.nl. It is standard practice in the Netherlands to get extra wages (usually 8 percent of your yearly salary) as a ‘holiday allowance’ (normally paid in May) plus four weeks of paid leave.
Sanne van Ruitenbeek of Pallas Advocaten provides the following important information:
> If you work in the Netherlands, Dutch law is partly and often fully applicable to your employment, even if the law of another country is declared applicable in your contract.
> The number of succeeding employment contracts for a fixed term is limited to three. The total duration of fixed term contracts is limited to two years. If the duration of the contracts or the number of fixed contracts exceeds the legal limit, the employment contract will automatically become a contract for an unlimited term. An interval of six months between contracts, however, breaks the chain of consecutive temporary contracts.
> If the contract is for less than two years, the trial period cannot be longer than one month. The maximum duration of a trial period is two months. Trial periods in contracts for less than six months are invalid. During the trial period, both employer and employee are allowed to terminate the employment contract with immediate effect.
> The notice period for the employee is usually one month. If the notice period for the employee is extended, the notice period for the employer should be double the notice period of the employee.
> Employment contracts for an unlimited term can only be terminated by the employer with consent of the employee, the labour office (UWV WERKbedrijf) or the Court. The court and labour offices assess whether there are grounds for a valid termination. If an employer gives notice of termination without obtaining prior approval, the employee could nullify the termination. This rule is not applicable in the case of summary dismissal (such as fraud or theft by the employee). Courts are however very reluctant about accepting summary dismissals. It is therefore very important to contact an employment lawyer immediately if you are fired on the spot.
> The legal minimum number of holidays per year is four times the weekly working time. This means 20 holidays in the case of a fulltime employee working a five-day week. However, it is common practice in the Netherlands for a fulltime employee to be entitled to approximately 25 holiday days per year in addition to Dutch public holidays. By law, there is an expiration date of six months for taking the legal minimum number of holidays. Employees therefore must take all their holidays within six months after the year in which the holidays were accrued. Should the employee not take the holidays on time, the holidays will lapse without any compensation or payment. The expiration date of six months is not applicable to the holidays that the employee is entitled to on top of the legal minimum number of holidays. These extra holidays will not lapse until after a period of five years.
Collective Labour Agreement (CAO)
This is a written agreement covering working conditions and benefits, which is drawn up by employers, employers’ organisations and employee organisations (such as unions). A CAO operates at company or industry sector level and the provisions (number of holidays, for example) are often more generous than statutory requirements. It should state in your contract whether a CAO is applicable; you don’t have to be a member of a union to benefit. If no CAO applies – all must be registered – you will need to negotiate your own terms and conditions. The largest trade union federation in the Netherlands is the FNV (www.fnv.nl).
The Dutch social security system is one of the most comprehensive in Europe but access to the welfare system is becoming more restrictive. There are three strands:
- National Insurance administered by the social insurance bank (www.svb.nl), which includes old age pension (AOW) and child benefit (AKW);
- Employee Insurance administered by UWV (www.uwv.nl), including unemployment benefit (WW, see below), long-term disability (WIA) and sickness (ZW); and
- Social Assistance administered by municipalities (www.rechtopbijstand.nl).
Specific conditions apply to each benefit. Also, do check that your residence rights are not affected if you apply for benefits. Your official documents will need to be in good order. Consult the Ministry of Social Affairs and Welfare website (www.szw.nl) for more information.
Unemployment benefit (WW)
Your employment history will determine the amount and duration of payments. For the first two months you get 75 percent of your last earned salary, and thereafter 70 percent (there’s a maximum monthly rate of EUR 2,939 gross). You must have worked 26 out of the previous 36 weeks before the first day of unemployment (or less for those not in regular employment). It can be restricted if other benefits are in operation. You apply for benefit online at www.werk.nl or at a local office of UWV WERKbedrijf.
Sanne van Ruitenbeek, Pallas Attorneys-at-law / Expatica
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Updated 2012, 2015, 2016.
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