Employment contracts in the Netherlands are governed by specific legal frameworks, distinguishing between fixed-term and indefinite-term agreements. These frameworks ensure clarity and protection for both employers and employees.
Fixed-Term Employment Contracts
A fixed-term contract specifies an end date or a duration linked to a project. It terminates automatically on the end date, requiring no formal notice. However, for contracts exceeding six months, the employer must notify the employee at least one month before the contract ends. Failure to comply obliges the employer to compensate the employee up to one month’s gross salary.
Dutch law limits the consecutive use of fixed-term contracts. If an employee signs three successive contracts or the total duration exceeds three years, the contract converts into an indefinite-term agreement. A gap of six months or more resets this chain.
Indefinite-Term Employment Contracts
Indefinite-term contracts provide employees with enhanced legal protection as they lack a predetermined end date. Termination is subject to mutual consent or strict legal grounds, such as performance issues or organizational restructuring.
Salary and Benefits
Dutch law mandates that employees receive at least the statutory minimum wage and an 8% holiday allowance. Additionally, employees are entitled to a minimum of 20 vacation days (in case of fulltime employment) per year, with many contracts granting more generous allowances.
Post-Contractual Clauses
Post-contractual clauses, such as non-competition and confidentiality agreements, are common. These clauses protect the employer’s interests during and after the employment relationship. For fixed-term contracts, non-competition clauses are in principle invalid, except in case of compelling business interests.
By adhering to these provisions, employers and employees can foster clear and legally sound working relationships.
This blog was written by Jordi Rosendahl, attorney-at-law and partner at Lexence.
Jordi Rosendahl specialises in employment law and dismissal law. He advises employers, directors and employees on their position under employment law and assists them in negotiations and during procedures at UWV or the District Court.
For inquiries, contact Jordi Rosendahl at j.rosendahl@lexence.com or +31 6 5176 2726.
Jordi Rosendahl
