What are terms of employment?
Terms of employment are the terms on which an employee works for you. For example, salary and working hours. Oral agreements on employment conditions are valid. But it is better to put the agreements in writing. You do this in an employment contract.
Provide clear terms and conditions of employment
As of 1 August 2022, it is mandatory to provide clear terms of employment under the new 'Law implementing the EU directive on transparent and predictable working conditions'. For example, you must provide information about the terms and conditions of employment when an employee starts. Such as information about the location where the work is done and possibly the right to education. You also need to ensure a work pattern that is as predictable as possible.
Read more about the legislation for clear employment conditions.
Types of terms of employment
Primary terms of employment
Primary terms of employment are the main matters you need to agree on with your employee. Such as the wage, the position, and the number of hours that someone works. Primary terms of employment form the core of the employment contract. The main terms are:
- deductions and settlements from the salary
- any allowances, bonuses, commisions
- holiday allowance
- working hours
- leave days and leave arrangements
Secondary terms of employment
Secondary terms of employment are the conditions that come on top of the primary ones. Examples of secondary employment terms are:
- 13th month
- travel allowance
- pension scheme
- education opportunities
- career guidance
- company car
Offering flexible secondary terms of employment
You can offer your employees flexible secondary terms of employment. They can then choose part of the employment conditions they want. This is also known as 'a la carte employment terms'. For example: compensate overtime in money or in time off. Or take extra-statutory holidays as leave or use these days to pay for a bicycle.
Tertiary employment conditions
Tertiary employment conditions are provisions that are difficult to express in monetary terms. Examples of tertiary employment conditions are:
- Christmas hamper
- use of the company canteen
- high-quality work environment
Employment conditions in the law and collective labour agreement
Is there a collective labour agreement (CAO) for your sector? Check which agreements it contains about terms and conditions of employment. Some laws also contain rules related to terms of employment. The law prescribes a minimum for a number of employment conditions. You can make additional agreements about the conditions. These cannot deviate from the law or collective labour agreement.
As a good employer, you adhere to the following laws and regulations:
- The Dutch Civil Code (Burgerlijk Wetboek, BW). This contains rules about, for example, trial period,holidays,notice period, and dismissal.
- Minimum wage and Minimum Holiday Allowance Act. This states that you must pay at least the minimum wage and minimum holiday allowance.
- The Working Hours Act (arbeidstijdenwet, ATW). Here you will find rules about working hours and rest periods.
- Working Conditions Act. You must ensure that your employees can work safely and healthily.
- Work and Care Act. Here you will find information about a number of leave schemes to which your employee is entitled.
- Legislation on equal treatment. You must not discriminate against your employees. There should be no difference in terms of employment between:
- men and women
- natives and immigrants
- full-timers and part-timers
- employees with a permanent or temporary contract
- people with and without disabilities
- healthy people and people with a chronic illness
- Pay salary on time. You must pay the employee wages on time. The employment contract determines when.
- Pay slip required. With the first salary payment, you must provide a specification of the salary, the so-called pay slip.
Payroll employees: the same legal position and employment conditions
Payroll employees have the same terms of employment and legal status as your other employees. Do you hire employees through a temporary employment or payroll company? In that case, you must notify the temporary employment or payroll company of your terms and conditions of employment. You do this prior to the posting.