Hire in The Netherlands

An employment contract can be agreed upon for a fixed period of time (fixed-term contract) or for an unspecified period of time (open-ended/permanent contract). A fixed-term employment contract will automatically convert into an open-ended employment contract if either of the following occurs:

• A chain of temporary employment contracts covers 36 months or more.
• A chain of three fixed-term employment contracts is continued.

A chain is a series of fixed-term employment contracts, which succeed each other with no more than six months in between. This rule is also applicable to employment contracts between an employee and various employers that must reasonably be deemed to be each other’s successors regarding the work performed. It is possible to shorten the interval period of six months to three months in a Collective Labor Agreement if the nature of the activity so requires. This applies, for example, to seasonal labor.

One month prior to the termination of a fixed-term employment contract of six months or longer, the employer must give notice to the employee whether the employment contract will be extended or not. The employer is also required to inform an employee who has a fixed-term contract about openings with an open-ended employment contract.

A probationary period must be concluded in writing. No probationary period can be applied in an employment contract with a term of six months or less.

The maximum probationary period in open-ended contracts is two months. In fixed-term contracts, the maximum probationary period is one month if the contract’s duration is between six months and two years, and two months for longer contracts. Probationary periods are not permitted for fixed-term contracts lasting up to six months.

The established probationary period for both the employer and the employee should be the same. A probationary period is not valid if the employee involved is already employed at the employer, but at a different position and will be carrying out more or less the same work that they have done elsewhere within the company.

During the probationary period, either party may terminate the employment contract with immediate effect, without notice or stating the reasons.

Regulations and Rules Regarding Working Hours in The Netherlands:

The average working week in The Netherlands consists of 5 days with between 36 and 40 working hours.

An employee may work a maximum of 12 hours per shift, and the maximum working hours per week is set at 60. However, it’s important to note that an employee may not work the maximum number of hours every week.

When viewed over a longer period, the working hours are as follows:

• Per week during a 4-week period: on average 55 hours per week during a period of 4 weeks; however, deviating agreements on this can be made in a collective arrangement (CAO for example). Nonetheless, an employee may never work more than 60 hours per week.
• Per week during a 16-week period: on average 48 hours per week during a 16-week period. The specific hours that the employee works per day and per week are determined through agreements between the employee and employer.

Rest after working hours:

• After a working day, an employee must have 11 consecutive hours of non-work time. This rest period may be shortened to 8 hours once in a 7-day period if the nature of the work or the business circumstances require it.
• In the event of a 5-day work week, an employee must have 36 consecutive hours of non-work time after the end of the work week.
• For a longer work week, the employee must have at least 72 consecutive hours of non-work time in a period of 14 days. This period may be split into two periods of at least 32 hours each.

Breaks:

• If an employee works for more than 5.5 hours, they are entitled to at least 30 minutes of break time, which may be split into two 15-minute breaks.
• If an employee works for more than 10 hours, they must have at least 45 minutes of break time, which may be split into several breaks, each lasting at least 15 minutes.
• A collective arrangement (such as a CAO) may include agreements on fewer breaks, but if the employee works for more than 5.5 hours, they must have at least 15 minutes of break time.

In The Netherlands, there is no specific legislation governing compensation for working overtime. The terms of compensation for overtime should typically be outlined in the employment contract or established in a collective labor agreement if applicable.

If the employment contract or collective labor agreement does not specify overtime compensation, and if a dispute arises, the courts are likely to decide in favor of compensating the employee for overtime. This decision would be based on the expectation of what constitutes fair treatment from a “good employer” in such circumstances.

In The Netherlands, employers are mandated to engage the services of a working conditions service, an institution that aids employers in conducting risk assessments, offers advice on reintegrating sick employees, assists sick employees, and provides other related services. Employers are encouraged to establish a robust complaint procedure. Additionally, they must inform their employees about their right to address health and safety concerns with the company’s occupational health and safety service agency.

In The Netherlands, there are no mandatory requirements for bonus or commission payments, meaning employers are not obligated to provide such benefits. However, if employers do offer bonuses, they must ensure equal treatment among all employees to avoid discrimination claims. The criteria for bonus eligibility should be objective, often based on individual or company performance.

Notably, in the financial sector, the variable part of remuneration cannot exceed 20% of the fixed remuneration, a stricter regulation compared to the 100% cap in many other parts of the EU.

Additionally, there is a mandatory holiday allowance paid annually in May.

Female employees are entitled to 26 weeks of maternity leave, which can begin as early as eight weeks before the expected delivery date. The remaining weeks can be taken after childbirth. For women expecting their third child or more, the paid maternity leave duration is 12 weeks, with six weeks before and six weeks after the expected delivery date. Maternity leave is granted with full pay if the employee has completed at least 80 days of service with the employer in the 12 months before her expected delivery date. Maternity benefits are paid at the average daily wage rate for the duration of the absence from work. Additionally, female employees receive a medical bonus of INR 3,500 if health benefits are not provided by the employer. If a woman’s job allows, she may work from home after utilizing maternity benefits, based on mutual agreement between her and the employer.

The law also provides for adoption leave of 12 weeks for women adopting a child under three months old. A commissioning mother, who provides her egg for embryo implantation in another woman, is entitled to 12 weeks of leave from the date the child is handed over to her. The woman giving birth, known as the host or surrogate mother, is not eligible for this leave.

Employers are required to inform female workers of their rights under the Act at the time of appointment, both in writing and electronically.

While paternity leave is offered to government employees, it is not mandated in the private sector, and its provision is at the discretion of the employer.

Under Dutch law, employers must adhere to statutory notice periods when terminating an employment contract:

– Less than five years of service: One month’s notice
– More than five years but less than 10 years of service: Two months’ notice
– 10 or more years but less than 15 years of service: Three months’ notice
– 15 or more years of service: Four months’ notice

Employees are typically required to provide one month’s notice. However, the employer and employee can agree to a shorter or longer notice period in writing, up to a maximum of six months. In such cases, the employer’s notice period must be twice as long as the employee’s.

Dismissal notices must take effect at the end of a month, unless otherwise specified in a collective labor agreement or employment contract. Exceptions may occur during the trial period or in cases of substantial misconduct, such as theft, where contracts can be terminated immediately and without notice.

Dismissed employees in The Netherlands are entitled to a transition payment, also known as statutory severance (‘transitievergoeding’), starting from the first day of their employment contract. This payment is calculated as follows:

– An employee receives one-third of their monthly salary for each year of service.
– The transition payment is capped at EUR 83,000 gross or one annual salary, whichever is higher.

However, employees do not receive a transition payment if they terminate their employment contract, unless the termination results from seriously culpable actions by the employer. Employers can seek compensation for the transition payment if they dismiss an employee due to long-term occupational disability after two years of sickness.

In cases of dismissal based on cumulative grounds, the court may grant an additional severance payment of up to half of the transition payment. This is in addition to the statutory transition payment the employee is entitled to receive.

In The Netherlands, non-compete clauses and non-solicitation clauses are subject to certain regulations:

1. Non-compete clauses:
– Non-compete clauses are generally prohibited in fixed-term employment contracts unless the employer can demonstrate a substantial business interest for including such a clause.
– Non-compete clauses must be agreed upon in writing and be limited to terms that are reasonably necessary to protect the employer’s business interests.
– Typically, the duration of a non-compete clause is one year, and limitations on territory and activities depend on the industry and the employee’s position.
– Employers can enforce non-compete clauses in court and claim damages from the employee. Penalty clauses are often included in employment contracts to stipulate the consequences of violating the non-compete clause.

2. Non-solicitation clauses:
– Non-solicitation clauses prevent employees from soliciting their employer’s customers or employees during or after their employment.
– Similar to non-compete clauses, non-solicitation clauses must be agreed upon in writing and are subject to limitations on their scope and duration.
– Employers can enforce non-solicitation clauses in court and seek damages from employees who violate them. Penalty clauses are commonly included in employment contracts to address violations of non-solicitation clauses.

In both cases, the enforceability of these clauses depends on their reasonableness, necessity, and compliance with Dutch labor laws. Courts may intervene if clauses are deemed overly restrictive or unfair to employees.

In 2019, the European Court of Justice (ECJ) ruled that companies operating within the European Union must establish a system to accurately record the working hours of their employees. This ruling emphasizes the importance of implementing an objective, reliable, and accessible system for tracking the daily work hours of each employee.

Key points regarding this ruling include:

1. Objective and Reliable System: The system implemented by employers must be objective and reliable, meaning it should accurately reflect the actual hours worked by employees without manipulation or inaccuracies.

2. Accessibility: The recording system must be accessible to both employers and employees, allowing for transparency and verification of recorded working hours.

3. Daily Workday Recording: Employers are required to record the daily work hours of each employee, ensuring that all hours worked, including overtime, are accurately documented.

4. Compliance with EU Law: This ruling aligns with EU laws and regulations aimed at protecting workers’ rights, ensuring fair treatment, and promoting work-life balance.

Overall, the ECJ’s decision underscores the importance of implementing robust time-tracking systems to ensure compliance with labor laws and to protect the rights of employees across the European Union.

The Social and Economic Council (SER) plays a crucial role in overseeing proposed changes in employment laws and decisions affecting employment in The Netherlands. It serves as an advisory board and resource for labor agreements, with representation from employees, employers, and independent advisors.

Key points about the SER and labor relations in the Netherlands include:

1. Composition and Function: The SER consists of representatives from employees, employers, and independent advisors in equal proportions. It advises on proposed changes to labor laws and facilitates discussions between stakeholders to promote consensus-based decision-making.

2. Union Membership: Union membership in the Netherlands is voluntary, and only about 16% of the Dutch workforce are unionized. While membership has seen a slight decline in recent years, labor unions still play a significant role in advocating for workers’ rights and interests.

3. Political Engagement: Dutch labor unions do not have official affiliations with political parties. However, they engage in political activities such as lobbying and participation in the SER to influence policy decisions affecting workers.

4. Labor Relations: The Netherlands has a tradition of transparent and institutionalized relations between management and employees, leading to fewer labor disputes and strikes compared to other EU countries. This collaborative approach fosters stability and consensus in the labor market.

Overall, the SER and labor unions contribute to The Netherlands’ well-established framework for labor relations, promoting dialogue, negotiation, and cooperation between employers and employees to address employment-related issues.

The employee should receive a payslip from the employer containing, at minimum, the following details:

– Gross pay
– Breakdown of this amount (basic wage, performance bonus, etc.)
– Employer deductions for taxes and contributions
– Minimum holiday allowance applicable to the employee
– Name of the employer and the employee
– Period covered by the payment (e.g., month, year)
– Agreed-upon number of working hours for the employee

Employees are entitled to a statutory minimum number of annual leave days, which is calculated as four times the weekly working hours. For instance, a full-time employee working 40 hours per week is entitled to a minimum of 20 days’ leave per year. However, many collective labor agreements offer a higher number of holiday days, typically ranging from 20 to 30 days for full-time employees.

Annual leave days will expire if not taken within six months after the year in which they were accrued, unless the employee was unable to take them for a valid reason. This rule applies only to the statutory minimum of annual leave days. Additionally, employees who are ill will still accrue the full number of leave days as those who are not ill.

Apart from annual leave days, employees are entitled to a holiday allowance, typically amounting to 8.33% of the annual salary, provided the annual salary does not exceed three times the annual equivalent of the minimum wage.

Employers in The Netherlands are required to continue paying the salaries of sick employees for the initial two years of illness. During this period, the employer must pay 70% of the employee’s salary, ensuring that the payment is not lower than the minimum wage during the first year of sickness. However, the minimum wage limit does not apply in the second year. Many employees in The Netherlands are covered by clauses in individual employment contracts or Collective Labor Agreements that provide more favorable terms for the employee.

According to the Collective Labor Agreement applicable to GoGlobal employees in The Netherlands, in case of incapacity to work, the employee will be entitled to the following benefits as long as the Total Employee Assistance Committee (TEAC) continues:

– 90% of the salary based on the time period during the first 52 weeks of incapacity to work, with at least the statutory minimum wage applicable to them.
– 80% of the salary based on the time period from the 53rd week up to and including the 104th week.

Emergency leave in The Netherlands is designed for unforeseen personal circumstances that require an employee to take immediate time off, such as caring for a sick family member or dealing with a death in the family. Employers are obligated to grant reasonable requests for emergency leave and must continue paying the employee’s salary during this period. Emergency leave, along with short absence leave, is considered legal leave schemes in the country. However, if the collective labor agreement or regulations of the works council or employee representation stipulate different arrangements, those will take precedence.

Short-term care leave allows employees to provide essential care to parents or ill children living at home, or partners, under specific conditions. During this leave, the employer is required to pay 70% of the employee’s salary, or the minimum wage if that is higher.

Long-term care leave can be requested if a child, partner, or parent of an employee is seriously ill and requires care. Unlike short-term care leave, the employer is not obligated to continue paying the employee’s salary during this period.

Special or extraordinary leave, not governed by law, is typically outlined in the collective labor agreement, company scheme, or employee contract. It includes various situations such as marriage, funeral, or other significant life events, with different durations of leave granted depending on the circumstance.

During periods of leave, holiday entitlement continues to accumulate, and employers are generally not permitted to deduct days taken off for leave from an employee’s holiday entitlement unless agreed upon otherwise in the collective labor agreement.

Maternity Leave:

Pregnant employees and those who have recently given birth are entitled to specific accommodations in the workplace. This includes extra breaks, exemption from night shifts and overtime, and a steady schedule of working hours and breaks. Four weeks prior to the expected due date until six weeks after childbirth, the employee is prohibited from working.

Maternity leave in The Netherlands consists of four to six weeks before the due date and at least 10 weeks after childbirth. If the employee takes less than six weeks before childbirth, the remaining time can be added to the postnatal leave. If the baby is born later than expected, maternity leave starts after the birth, potentially extending the total leave beyond 16 weeks. For multiple births, the entitlement is extended to at least 20 weeks. If the newborn requires hospitalization, maternity leave begins upon the baby’s discharge. In case of the mother’s demise during childbirth, her partner is entitled to maternity leave.

During maternity leave, the Employee Insurance Agency provides full compensation of the daily wage, capped at the maximum daily wage of EUR 219.28.

Breastfeeding:

For the first nine months post-birth, women are allowed to interrupt work for breastfeeding or expressing milk, up to a quarter of their working hours. Employers must compensate the employee for this time and provide suitable facilities for breastfeeding or expressing milk.

Partner/Paternity Leave:

Partners of employees are entitled to one week of paid paternity leave following childbirth, with the employer covering 100% of the salary. This leave can be taken immediately or spread over the first four weeks after birth.

Extended Partner Leave:

Partners can take up to five weeks of unpaid leave within the first six months after birth. They may receive benefits from the Employment Insurance Agency (UWV) during this period.

Parental Leave:

Employees with children up to 8 years old can take unpaid parental leave, capped at 26 times their weekly contractual hours. Parental leave ends when the child turns 8, and employers are not obligated to pay salaries during this period.

Adoption Leave:

Employees who adopt or foster a child are entitled to six weeks of adoption or foster leave, applicable to both parents. They may take this leave intermittently, and the employer cannot refuse unless it poses serious business problems.

In The Netherlands, employees are entitled to a number of paid public holidays. There are a total of 10 (11 every five years) public holidays in the Netherlands. Whether employees are free from work on public holidays depends on the agreements made between employers and employees in the CAO (Collaborative Labor Agreement) or those in the individual employment contract. There is no substitution if a holiday falls on a weekend.