Successive employers under Dutch law
The doctrine of successive employers (opvolgend werkgeverschap) ensures that the protections of the chain rule (ketenregeling) and the transition payment calculation cannot be circumvented simply by changing the formal employer. Under Article 7:668a paragraph 2 of the Dutch Civil Code, contracts with different employers count as links in the same chain if those employers are deemed to be each other's successors in relation to the work performed.
The Supreme Court has held that two employers are successive employers (opvolgende werkgevers) when there is a sufficient connection between the activities performed under the successive contracts - in particular where the employee effectively continues the same or similar work for a different legal entity that has a connection to the previous employer. The employee's awareness of the connection is no longer required, following the Supreme Court ruling in Van Tuinen/Taxicentrale Wolters (2012) and subsequent legislative clarification.
Practical consequences under Dutch law
If successive employer status is established, the period of employment with the previous employer counts towards the three-year maximum and the three-contract limit. An employee who has worked for two years under two fixed-term contracts with employer A, and is then hired on a new fixed-term contract by employer B (who is the successor), will be entitled to a permanent contract after just one year with employer B - because the chain has already been running for two years.
The successive employer doctrine also applies for calculating the transition payment. All employment periods with successive employers are aggregated, which can significantly increase the transition payment on dismissal. Employers involved in restructurings, take-overs, or the use of agency workers converted to direct employment should assess the opvolgend werkgeverschap risk carefully.
Transfer of undertaking under Dutch employment law
In the event of a transfer of undertaking (overgang van onderneming), the successor employer automatically assumes all rights and obligations under the transferred employees' contracts by operation of law. The successive employer rules under Article 7:668a are additional to - not a replacement of - the transfer of undertaking regime.
The successive employer doctrine is also relevant for the calculation of statutory notice periods. Article 7:672(10) of the Dutch Civil Code provides that where different employers must reasonably be considered each other's successors in relation to the work performed, their employment contracts are deemed to constitute one continuous contract for the purpose of calculating the length of service. The practical consequence is that a new employer who takes on a worker from a predecessor employer cannot reset the seniority clock: the total period of continuous service, including time with previous linked employers, determines the applicable statutory notice period of one to four months under Article 7:672(2) of the Dutch Civil Code.