Fixed-term and permanent contracts under Dutch employment law

Q: What are the main differences between a fixed-term and a permanent contract under Dutch law?

A fixed-term contract (arbeidsovereenkomst voor bepaalde tijd) has a set end date and terminates automatically. A permanent contract (arbeidsovereenkomst voor onbepaalde tijd) runs indefinitely and can only be ended through a formal termination procedure, such as dismissal via the UWV or cantonal court, or by mutual consent.

Q: Can a fixed-term contract be converted to a permanent contract under Dutch law?

Yes. Under the chain rule (ketenregeling), a fixed-term contract automatically converts into a permanent contract if the employee has had more than three consecutive fixed-term contracts or if the total duration exceeds 36 months. Both parties can also agree to convert a fixed-term contract to a permanent one at any time.

Q: Is an employee entitled to severance pay when a fixed-term contract ends?

Yes. Since 2020, employees are entitled to a transitional allowance (transitievergoeding) from the first day of employment, including when a fixed-term contract ends without renewal. The amount equals one-third of a monthly salary per year of service.

What is a fixed-term contract and what is a permanent contract under Netherlands law?

Eva Jongepier, Chief Legal Editor – Dutch Employment Law - employment lawyer in the Netherlands
publication date: June 20, 2024
last updated: August 30, 2026

Fixed-term and permanent contracts under Dutch employment law differ in duration, termination rules, and employee protections. This article explains how the two contract types differ, when a fixed-term contract converts into a permanent one under the chain rule, and what happens when either type of contract ends.

Understanding the basics of an employment contract under Dutch law is useful background before reading further. A fixed-term contract has a set end date, after which employment terminates automatically unless renewed. A permanent contract runs indefinitely and can only be ended through a formal termination procedure.

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Definition of employment contract types under Dutch law

Under Dutch law, there are two main types of employment contracts: fixed-term agreements and permanent agreements. A fixed-term agreement (arbeidsovereenkomst voor bepaalde tijd) is an arrangement where the duration is agreed in advance, for a set period or until completion of a specific task. A permanent agreement (arbeidsovereenkomst voor onbepaalde tijd) has no end date and can only be terminated on one of the grounds set out in Article 7:669 of the Dutch Civil Code (Burgerlijk Wetboek).

Both contract types can still end within statutory limits in exceptional circumstances, such as bankruptcy of the employer or serious misconduct by either party.

Duration of fixed-term employment contracts under Dutch law

Dutch law does not set a statutory minimum duration for a fixed-term contract. Under the chain rule (ketenregeling, Article 7:668a of the Dutch Civil Code), a fixed-term contract converts automatically into a permanent contract once the employee has had more than three consecutive fixed-term contracts, or once the combined duration of successive contracts exceeds 36 months, whichever happens first. A collective labour agreement may vary these limits. See duration of employment in the Netherlands for the full renewal and conversion rules.

Conditions for termination of fixed-term employment contracts under Dutch law

A fixed-term contract ends automatically on its agreed end date and does not require notice of termination as such. Ending a fixed-term contract early is only possible if the contract itself contains an early termination clause (tussentijds opzegbeding); without one, the employer must apply to the subdistrict court for dissolution on a valid ground under Article 7:669. See termination of an employment contract under Dutch law for the full procedure.

For fixed-term contracts of six months or longer, the employer must separately inform the employee in writing at least one month before the end date whether the contract will be renewed (aanzegverplichting). Failure to do so results in a penalty equal to one month's salary, or a proportionate amount if the notification is late.

Benefits of permanent employment contracts under Dutch law

A permanent contract offers the employee greater job security: it can only be ended through a formal dismissal procedure, mutual consent, or on one of the statutory grounds under Article 7:669. In practice, permanent contracts are also more often accompanied by additional benefits such as pension contributions or more generous remuneration, though this depends on the individual employer and the applicable collective labour agreement rather than being a statutory requirement.

The rules on fixed-term and permanent contracts connect to several other areas of Dutch employment law, covered in more detail elsewhere:

The chain rule (ketenregeling) - how many fixed-term contracts can be offered before a permanent contract arises
Consecutive employment contracts and successor employer rules - how chain rule rights follow the employee when employers change
Statutory notice periods - the notice periods that apply when ending an employment contract
Dismissal protection under Dutch law - the statutory dismissal prohibitions and protections
Transition payment upon dismissal - the severance payment due when a contract ends, including a fixed-term contract that is not renewed
The subdistrict court in employment disputes - how employment disputes are resolved in the Netherlands

Key legal sources

Article 7:669 of the Dutch Civil Code - sets the statutory grounds required to terminate a permanent contract
Business.gov.nl: employment contracts - official guidance on fixed-term contracts and conversion to permanent

Frequently Asked Questions

What are the main differences between a fixed-term and a permanent contract under Dutch law?

A fixed-term contract (arbeidsovereenkomst voor bepaalde tijd) has a set end date and terminates automatically. A permanent contract (arbeidsovereenkomst voor onbepaalde tijd) runs indefinitely and can only be ended through a formal termination procedure.

Formal termination procedures include dismissal via the UWV or the cantonal court (kantonrechter), or termination by mutual consent. The type of contract directly affects notice requirements, severance payments, and the level of dismissal protection available to the employee.

Can a fixed-term contract be converted to a permanent contract under Dutch law?

Yes. Under the chain rule (ketenregeling), a fixed-term contract automatically converts into a permanent contract if the employee has had more than three consecutive fixed-term contracts, or if the total duration exceeds 36 months.

Both parties can also agree to convert a fixed-term contract to a permanent one at any time through mutual consent. The chain rule applies to contracts that follow each other within a gap of six months or less.

Can an employer terminate a fixed-term contract before the end date?

An employer can only terminate a fixed-term contract early if the contract contains an early termination clause (tussentijds opzegbeding). Without such a clause, the employer must apply to the cantonal court for dissolution.

Valid grounds for early termination must exist under Article 7:669 of the Dutch Civil Code. If the employer terminates without proper grounds or procedure, the employee may claim damages or compensation.

What notice obligations apply to fixed-term contracts in the Netherlands?

For fixed-term contracts of six months or longer, the employer must inform the employee in writing at least one month before the end date whether the contract will be renewed (aanzegverplichting).

Failure to provide this notice results in a penalty equal to one month's salary. If the employer notifies late but before the end date, a proportionate penalty applies for the days of delay.

Is an employee entitled to severance pay when a fixed-term contract ends?