Dutch Rules on Law Applicable to Employment Contracts

The law of which country is applicable to an international employment contract?

This is the first question that needs to be anwered to determine what rights and obligations the employer and the employee are bound by.

Regulation on the law applicable to contractual obligations (Rome I)

Under Dutch Private International Law, the law that shall be applied is specified in the Rome I Regulation. The Regulation will be applied whether or not this results in the applicability of the law of a member state. Article 8 of the Regulation gives a certain order in rulings to determine by which law an individual employment agreement is governed.

1. Law chosen by the parties
The employment contract shall be governed by the law chosen by the parties. This choice has to be made expressly or has to be clearly demonstrated by the terms of the contract or the circumstances of the case.
There is one exception: this choice can not have the effect that it deprives the employee of the protection that cannot be derogated from under the applicable law determined by step 2, 3 or 4 in the order (see below).

2. Law where the employee carries out the work
When no law has been chosen by the parties, the law of the country in which the employee habitually carries out his work in performance of the contract is applicable.

3. Law of the place of business
When no law has been chosen by the parties and no country can be appointed as the country where the employee habitually carries out the work, the contract shall be governed by the law of the country where the place of business through which the employee was engaged is situated.

4. Law of the closest connection
When no choice of law is made by the parties and it appears from the circumstances as a whole that the contract is more closely connected with a country other than indicated under 2 or 3, the law of this country applies.

Exceptions
As mentioned under 1, the choice of law can not have the effect that certain protective rules for the employee are excluded.
Another exception can be found in Article 9 of the Regulation. According to this article, overriding mandatory provisions of a country are applicable to any situation falling within the scope of this country, irrespective of the applicable law appointed by the Regulation.

But what are such protective and/or mandatory provisions?

Exceptions under Dutch law

The European directive on secondment determines more concrete rules that should be considered as mandatory, and fall under the scope of the abovementioned exceptions. This directive is specific for secondment employees though. This therefor only gives some pointers in case of a ‘normal’ employment contract.

So, which part of the Dutch law falls under the exceptions?

Dutch employment law applicable to any situation falling within the scope of the Netherlands
There is still much uncertainty about what part of the Dutch law falls under the exception.
In literature and jurisprudence the law on the following subjects are mandatory:

• The minimum wage;
• Working conditions (safety and hygiene of the workplace);
• Maximum working hours;
• Sick-leave;
• Non-discrimination.

In conclusion

It is not easy to determine with certainty what law is applicable to an employment agreement. Even when a choice of law is made by the parties, other rulings can be determined to be overruling.

Please do not hesitate to contact our employment law contact person if you wish further advice on what law is applicable to your employment contract.