Dutch labor laws regarding your contract of employment in the Netherlands are numerous; here are some expert tips on negotiating your employment contract.
The laws covering employment in the Netherlands are many and various. Your personal contract of employment will determine your pay and specific conditions. Dutch employment law covers key areas such as trial periods, Dutch vacation allowance, notice and dismissal, the Dutch minimum wage, health and safety, and equal treatment.
The Dutch labor law system for dismissal is particularly unusual, as it is very protective of employees: in most cases, the employer needs permission from the labor office, known as UWV WERKbedrijf, or the court to fire you.
If you want to assess an employment contract offer, you can check the market rate for your salary or calculate bruto/netto rates (before/after tax and social security deductions) at www.loonwijzer.nl. It is standard practice in the Netherlands to get extra wages (usually 8% of your yearly salary) as a holiday allowance (normally paid in May) plus four weeks of paid leave.
Dutch labor law overview
There are numerous aspects to Dutch labor law, however, which are explained below to help you negotiate your contract of employment in the Netherlands.
- If you work in the Netherlands, Dutch labor law is partly and often fully applicable to your employment, even if the law of another country is declared applicable in your contract of employment.
- The number of succeeding employment contracts for a fixed term is limited to three, but can also not exceed a limit of two years for the total duration of fixed-term contracts. If the duration of the contracts or the number of fixed contracts exceeds either legal limit, the contract of employment will automatically become a permanent 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 fewer 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 an employment contract for fewer 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 to end a contract of employment is extended, the notice period for the employer should be double the notice period of the employee.
- A permanent contract with an unlimited term can only be terminated by the employer with the consent of the employee, UWV WERKbedrijf or the court. The court and labor 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 under Dutch labor law. 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 full-time employees working five-day weeks, although it is common practice for full-time employees to be granted 25 holiday days per year, on top of Dutch national holidays. In the Netherlands’ employment 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 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.
Employment contracts under Collective Labour Agreements
A CAO (collectieve arbeidsovereenkomst) is a written agreement covering working conditions and benefits, which is drawn up by employers, employers’ organizations and employee organizations (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 of employment 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).
Changing jobs: Your employment contract and Dutch permit
Any changes in your work or partnership status must be reported to the IND within four weeks. You or your sponsor (such as an employer) can be penalized by the IND if changes aren’t reported, including contributions to repatriation costs.
If you change jobs, you don’t necessarily need a new Dutch residence permit, but the same rules will apply as for the first permit you were granted. So if you worked with a separate Dutch work permit, your new employer needs a new work permit, too.
If you worked as a highly-skilled migrant in the Netherlands, your new employer needs to be eligible to apply under the highly skilled migrant scheme, and will need to prove to the IND that you still meet the requirements of the highly skilled migrant scheme, for example, sending in your contract of employment to show you earn the required salary.
If you are applying to extend a Dutch residence permit, your circumstances will be assessed again in reference to the original application. The main exception is that after three years working on any given residence permit that allowed you to work (such as a partner’s permit or employee single permit), you no longer need a separate work permit to sign a contract of employment.
Highly skilled migrants can also change their purpose of stay into labor after three years, which allows them to work without a work permit and without meeting the requirements for the highly-skilled migrant scheme in the Netherlands.
Unemployment benefits (WW) in the Netherlands
Typically all working residents in the Netherlands must first pay Dutch social security contributions in order to receive any benefits. Your employment history determines the amount and duration of unemployment benefit payments. For the first two months you get 75% of your last earned salary, and thereafter 70%. You must have worked 26 out of the previous 36 weeks before the first day of terminating your contract of employment (or fewer for those not in regular employment), although benefits can be restricted if other benefits are in operation.
Dutch labor authority
Useful information regarding working practices, your contract of employment, Dutch labor law, and the Netherlands’ 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).
How many Netherlands vacation days?
The legal minimum number of vacation days in the Netherlands per year is four times the amount of days worked per week. This typically means 20 holidays in the case of a full-time employee working a five-day week (4×5 working days=20 Netherlands vacation days). However, it is common practice in the Netherlands for a full-time employee to be entitled to approximately 25 holiday days per year, in addition to more than 10 public holidays in the Netherlands.
Employees may be granted more vacation days in the Netherlands by result of personally negotiating the conditions of their employment contract. Otherwise, workers who are part of a Collective Labor Agreement (CLA, or CAO in Dutch) may also be granted a package of more Netherlands vacation or vakantie (vacation in Dutch).
CLAs are commonly formed between industries or employers and trade unions and binds all employees within that company to the union-agreed employment conditions, including salary levels, Netherlands vacation days, overtime, contract terminations, Dutch maternity leave and paternity leave, Dutch pensions, education, childcare, and other employee benefits. Such union ties are commonly formed in the Netherlands and often offer more favorable conditions than those prescribed by law, but can never be in contradiction to Dutch labor law.
Holiday pay in the Netherlands
The biggest question most employers ask is: what is the legal amount of holiday entitlement? During your vacation days in the Netherlands, employee benefits include the continued payment of your full wage.
Under Dutch employment law, employees are also entitled to a minimum holiday allowance of at least 8% of their annual salary (including salary, bonuses, and allowances) in addition to their vacation days in the Netherlands. The holiday allowance may be reduced or eliminated, however, if you earn more than three times the Dutch minimum salary and sign an agreement. Your holiday leave allowance is paid by your employer usually once a year (around May), and your employer must state the holiday allowance on your payslip.
Rules for using your Dutch vacation allowance
Your Netherlands vacation days must be taken within six months in the year after they were accrued, otherwise your vacation days in the Netherlands will lapse without any compensation or holiday pay.
There is, however, one exception to this rule; if an employee is not able to take holidays, for instance, due to sickness or workload. In this case, your holidays will not lapse until after a period of five years. This five-year time-limit is also applicable to all holidays accrued before reforms implemented in January 2012 and to all holidays which the employee is entitled to on top on the legal minimum number of vacation days in the Netherlands.
As a final resort, you can also come to a private agreement with your employer to extend the period in which you can take your vacation.
Changes to employee benefits
The European Court of Justice previously judged that sick employees should accrue the same number of holidays as employees who are fit for work. This judgement brought to light that Dutch legislation employee benefits concerning vacation was in violation of EU rules. For this reason, the law was changed in 2012.
Previously Dutch labor law stated that an employee who was unfit for work for more than six months would only accrue holidays over the last six months of sickness, regardless of the amount of sick leave taken in the Netherlands. As of 1 January 2012, however, the law stipulates that sick employees will not be treated differently from ‘healthy’ employees, which means holidays will be accrued during the whole period of sick leave. To prevent an employee accruing a significant backlog of holidays – which could be a risk for the employer – the new law also introduced the expiration date of six months.
In brief, the laws on vacations in the Netherlands include the following:
- The law does not distinguish between employees who are fit or unfit for work; both groups will accrue the same number of vacation days in the Netherlands and minimum Netherlands holiday pay.
- Employees should be able to take holidays during sickness in order to get a break from reintegration activities.
- If an employee does not take their minimum number of Netherlands vacation within six months after the year they accrued the holidays, the holidays will lapse, unless the employee has not been able to take the holiday for reasons such as sickness or workload.
- Holidays accrued before 1 January 2012 and holidays on top of the legal minimum number of holidays will lapse after five years.
- Twenty is the legal minimum number of vacation days for a full time employee.
- Holidays which have the shortest expiration date will be deemed to be taken first by the employee.