Dutch Employment Law

Hiring and Firing in The Netherlands

Who hires persons to work in The Netherlands will sooner or later get to know the relatively complex system of Dutch Labour Law. The rules are laid down in statutory regulations, like in the Dutch Civil Code, and in extensive case law. Hiring is relatively easy. Firing may be complex and in certain cases impossible or expensive.

Hiring

The regulations of Dutch Labor Law do not require the employer to provide a written contract of employment. However, it is good to realise that the absence of a written contract usually is advantageous for the employee. By not concluding a written contract before commencement of the contract, the employer misses the chance to stipulate important clauses. For certain clauses, like a non-competition clause, the written consent of the employee is a formal requirement.

The contract of employment may be concluded in the Dutch language, or another language. The use of contracts in other languages is not formally forbidden. This does not mean that one should not take into account that Dutch law is applicable. It is good to realise that Dutch Employment Law has many particularities. In our daily practice we are frequently confronted with companies using the same contract model in various countries. This seems to be an easy and fair solution, but this is not often the case. There is a high risk that some of the clauses used will be disregarded by the Court. It is very important to conclude a contract that is specifically designed for use within The Netherlands. This is not expensive or difficult and may help a lot.

Under certain restrictions one is free to conclude contracts of employment for a fixed or for an indefinite term. Fixed term contracts may be renewed under certain conditions. One cannot continue to renew such contracts over and over again. The law provides for a system where fixed term contracts become indefinite term agreements afer further renewal.

Firing

In The Netherlands it is not always easy to dismiss employees. The use of a mix of fixed and indefinite term contracts and the hiring of employees via temp agencies is therefore a good way to avail over a flexible work force. This will enable the employer to up size and down size the company in an effective manner.

The dismissal of employees with a contract for an indefinite term is generally not impossible, but this will most always cost time, effort and money. In the absence of mutual agreement or cause the employer may generally not terminate the contract of employment without a permit, to be obtained from the Dismissal Authority. This will take several months and it is not always predictable whether one will obtain the required permit or not. Another option is to ask the Court to dissolve the employment contract. In general, these proceedings are less time consuming. The Court may award compensation to the employee. This is dependent on various factors, like the circumstances of the case, the length of the contract of employment and the age of the employee. For more details see the explanation of the Dutch Cantonal Court Formula in our article on Redundancy Payments in The Netherlands.

Please note, that it is generally impossible to fire an employee during pregnancy or during sick leave.

Further information

It is not possible to address in detail all the issues of dismissal under Dutch Labor Law. Due to the complexity of the system it is wise to seek professional assistance prior to taking any measure.

For further information regarding Dutch Employment Law, please contact our contact person of the Labour and Employment Law Practice Group.