Compensation failure to give notice (fixed-term contracts)

This information is provided by: Netherlands Enterprise Agency

You must give temporary employees with a fixed-term contract notice at least 1 month before their contract of employment ends. In doing so, your employees will know if their contract might be renewed or not and under what terms. If you fail to give notice or you give notice too late, your employee is entitled to compensation. The amount of compensation (Dutch) depends on both the type of contract and to what extent you have exceeded the notice period. Your employee may claim the compensation up to 2 months after their contract has ended.

Failure or too late: compensation

If you fail to give the proper notice period at all, compensation amounts to 1 monthly gross salary. If you are too late, compensation will be proportional. If, for instance, your giving notice is 1 week too late, your employee is entitled to compensation of 1 gross weekly salary. Your employee's gross salary depends on their contract, and compensation must always be based on their most recent one.

Gross monthly salary fixed-hours contract

If your employee has a fixed-hours contract, their gross monthly salary comes down to their gross hourly rate multiplied by the number of hours worked each month. To this you add any extra wages, such as commissions or for piece work.

Gross monthly salary 'on call' contracts or 'minimum-maximum' contracts

To calculate the gross monthly salary of employees that have 'on call' or 'minimum-maximum' contracts, you must take their average working hours per month. You calculate the average working hours by adding together all hours they have worked for you and then divide this total by the number of months their contract lasted. The gross monthly salary comes down to multiplying the average number of working hours with their gross hourly rate. To this you add any extra wages, such as commissions or for piece work.

Please note: in the case of a minimum-maximum contract your employee's average working hours should always be at least the contractual minimum hours.

Employee's absence

If your employee was absent due to leave, strike or illness for one or more full months, you do not have to take this time into account when calculating their average gross monthly salary.

Gross monthly salary commission or piece work

To calculate the average gross monthly salary of employees that receive commissions or are paid for piece work, you add together all their earnings over the contract period and divide it by the number of months of that contract. If they receive a monthly salary as well, you add these two figures together.

Employee's absence

If your employee was absent due to leave, strike or illness for one or more full months, you do not have to take this time into account when calculating their average gross monthly salary.