Applicable law to employment contracts: the Rome I Regulation
When an employment contract has an international dimension - for example, a Dutch employer hiring a foreign national, or a multinational posting a worker to the Netherlands - the question arises as to which country's law governs the contract. In the EU, this question is answered by the Rome I Regulation (Regulation (EC) No 593/2008 on the law applicable to contractual obligations). Article 8 of Rome I contains specific rules for individual employment contracts.
Under Article 8(1), parties to an employment contract may choose the applicable law. However, this choice cannot deprive the employee of the protection afforded by the mandatory provisions (dwingend recht) of the law that would apply in the absence of a choice - usually the law of the country where the employee habitually works. This means that even if the contract states it is governed by English or Belgian law, Dutch mandatory employment law provisions will apply if the employee habitually works in the Netherlands.
Habitual place of work
In the absence of a choice of law, Article 8(2) provides that the contract is governed by the law of the country in which the employee habitually carries out their work. This is a factual assessment based on where the employee actually performs most of their work, regardless of where the employer is established or where the contract was signed. For employees who work in multiple countries - such as in cross-border employment situations - the habitual workplace is determined by looking at the overall centre of gravity of the employment relationship.
Dutch mandatory provisions
Dutch employment law contains numerous mandatory provisions that cannot be contracted out of. These include: the statutory notice period under Article 7:672 of the Dutch Civil Code, the right to a transition payment under Article 7:673 of the Dutch Civil Code, the ban on dismissal during illness, the right to contest summary dismissal, and minimum wage entitlements. For employees working in the Netherlands, these provisions apply regardless of any foreign choice-of-law clause in the contract. An employment lawyer can advise on the specific mandatory rules applicable to your situation.
Under Article 8(2) of Rome I Regulation (EC) No 593/2008, in the absence of a choice of law the employment contract is governed by the law of the country where the employee habitually carries out their work; under Article 8(3), if no such country can be identified, the law of the country from which the employee is engaged applies. The freedom to choose a governing law under Article 8(1) cannot deprive the employee of the mandatory protections of the law that would otherwise apply - so Dutch rules on dismissal, the transition payment, and the statutory notice period under Book 7 CC apply regardless of any foreign choice-of-law clause if the employee habitually works in the Netherlands.