What is the duration of employment in the Netherlands?
The duration of employment in the Netherlands determines the rights and obligations of both employer and employee. Under employment law in the Netherlands, you can have temporary or permanent employment contracts. The specified duration of an employment contract must be clearly understood by both parties, so they are aware of the date at which their obligations will end with the termination of the agreement.
What are fixed term employment agreements in the Netherlands?
Employment agreements that have been concluded with a fixed term (arbeidsovereenkomst voor bepaalde tijd) generally make the obligations and rights of both parties equally clear. The duration of employment is clearly outlined in the terms covered under the agreement, with the date of expiry being the official date of termination. The employer is generally under no obligation to give notice to the employee of the termination, as it is already codified in the agreement itself.
An exception applies under Article 7:668 of the Dutch Civil Code: if the duration of a Dutch employment contract is six months or more, the employer has a resulting obligation to inform the employee whether the contract will be extended. This must be done no later than one month before the expiry date stipulated in the contract. The employee must be informed of any updated or changed terms and conditions in this possible extension to the contract. Dutch law carries certain penalties when failing to meet these obligations. If the employer does not inform his employees at all, then he will be legally obligated to pay an amount equal to one month’s salary of the relevant employee. However, if he instead informs the employee, but not within the allocated period (one month), then a penalty proportionate to the time lost will be imposed.
What are periodic employment agreements in the Netherlands?
An employment agreement in the Netherlands that exists for an unspecified period (arbeidsovereenkomst voor onbepaalde tijd) has no set expiration date. Under Dutch employment law the route to take in determining the duration of the agreement and thus its termination is quite different from the above-mentioned fixed-term agreements, and the level of protection available to employees in this instance is significantly higher compared to other legal systems.
Ending such an agreement without the employee's consent generally requires either dissolution by a competent court, or a dismissal permit granted by the Employee Insurance Agency (UWV).
How do you renew an employment agreement in the Netherlands?
Under Article 7:668a of the Dutch Civil Code (the chain rule, ketenregeling), fixed-term employment contracts can be renewed up to three times, and the entire duration of a fixed-term agreement may not exceed 36 months including any granted extensions. If an agreement is renewed a fourth time or exceeds the 36-month limit, it automatically converts into a permanent contract.
Simple renewal of the agreement can be accomplished via means of a notification letter. Fixed-term contracts can also be modified or even changed into an indefinite term contract by agreement.
These principles of renewal also apply to employment agreements under Dutch law that have succeeded each other within six months. Under the Dutch employment contract regulations, the employer cannot circumvent these limitations by reintroducing a new employment agreement for their employees every few months.
Key legal sources
- Article 7:668a of the Dutch Civil Code - statutory basis for the chain rule (ketenregeling), including the six-month interruption period
- Article 7:668 of the Dutch Civil Code - employer's obligation to notify the employee of contract renewal or non-renewal (aanzegverplichting)