Employment contract

An employment contract (arbeidscontract) is an agreement between an employee and an employer, containing working arrangements. In the Netherlands, you can enter into an employment contract for a fixed term (a temporary contract) or for an indefinite period (a permanent contract). It can be agreed in writing or verbally. In the employment contract, you indicate whether a Collective Labour Agreement (CAO) applies.

How often can someone receive a fixed-term contract

If temporary contracts are continually extended, immediately or within 6 months, permanent employment will follow after 2 years or starting with the 4th consecutive contract (chain provision). If included in their CAO, you may give seasonal workers in, for instance, the food and beverage or agricultural sector a new temporary contract after only 3 months.

Written statement of employment details

As an employer, you must give your employees a contract in writing that contains the details of their employment. If you intend to provide the information electronically, your employee must give his or her express consent for you to do so. You can include the data in your employment contract, but you may also provide the data separately.

The information must include at least:

• the name and place of residence of the employer and the employee
• the location(s), at which the work is carried out
• the employee's job and the nature of the work
• the usual working hours
• the amount of the salary and the payment periods
• date when the employee joined the company
• term of the contract (if for a fixed term)
• (if applicable:) length of the trial period
• holiday entitlement
• notice period
• (if applicable) pension
• (if applicable) non-compete or non-solicitation clause
• whether a Collective Labour Agreement (CAO) applies

Equal treatment and pay

You have to treat and pay your employees equally. Working conditions must be the same for all your employees. Discrimination based on religion, beliefs, political opinions, race, gender, age, disabilities or any other grounds is unlawful.

Balance Employment Market Act

A new law comes into force on 1 January 2020 to regulate flexible work, dismissal and the financing of unemployment benefit. Through the Balance Employment Market Act (Wet arbeidsmarkt in balans, WAB), the government wants to make it more attractive for employers to offer a fixed contract rather than a flexible one. At the same time flex workers must be given more stability in their job and income. Under the new law, measures are taken in several areas:

Unemployment benefit (WW)

• You pay lower unemployment insurance contributions (WW) for fixed contract employees than you do for flex workers. The difference is 0.5%.

Dismissal and transition payments

• Cumulative grounds for dismissal is added to the list of reasonable grounds for dismissal.
• If cumulative grounds are a factor in an employee’s dismissal, the judge can rule that you have to pay them an extra compensation, on top of the transition payment they are entitled to. This extra compensation can run to half the amount of the transition payment.
• Your employees are entitled to a transition payment from the first day of employment, also during the trial period. Under current law, employees are entitled to a transition payment only after two years’ employment or more.
• Every employee who is laid off receives a transition payment of one third of a monthly salary per year of employment. It does not matter how long the employee was employed by you.
• You can claim compensation for the transition payments for your employees if you have to close your business due to retirement, illness or death, and you employ fewer than 25 employees.
• Per 1 April 2020, the Transition Payment Compensation for Long-term Illness Regulation will come into force. Its purpose is to prevent you having to make double payments when an employee is ill for a long time.

Temporary personnel and chain provision

• You can keep an employee on as a temporary worker for a longer period, as the chain provision, the period after which consecutive temporary contracts have to be turned into a permanent one, is extended from 2 to 3 years.
• You can re-hire staff with a temporary contract after a pause of 3 months, instead of 6. You can only do so if the work is temporary seasonal work, which an employee can do for a maximum of 9 months per year, and if it is agreed in the collective labour agreement (CAO).

Payroll employees and on-call workers

• Payroll employees will have the same labour conditions as your permanent employees. They will also be entitled to a fitting pension scheme.
• You have to call an on-call worker at least 4 days in advance. On-call employees will be entitled to pay over the hours they have been called in for, if you cancel the work less than 4 days in advance. A cao may contain an agreement to shorten this 4-day period to 1 day.
• After 12 months, you have to give your on-call employee a fixed hours contract. The number of hours must be the same as the number of hours worked by your on-call employee on average during the past 12 months.