Employment law in The Netherlands
Dutch labour law is intricate and, in certain respects, differs greatly from other legal systems. In particular, the position of the employee, especially with respect to dismissal, is better protected than in many other countries.
Our law firm provides a broad range of services to employers in all aspects of employment law. These services include drafting all relevant employment documentation, termination of employment contracts and advising on various employment law matters in The Netherlands.
Definition contract of employment
A contract of employment consists of three essential elements. Firstly, an undertaking by the employee to perform certain activities. The crucial factor in this respect is that the employee will be personally bound to the employer (i.e. he must perform the activities himself and may not appoint another in his place without his employer's consent).
Secondly, an obligation on the part of the employer to pay the employee's salary.
Thirdly, a relationship of subordination by virtue of which the employer is entitled to give the employee instructions which the latter must follow.
If all three elements are present, the relationship between the parties will be deemed a contract of employment. Conversely, the absence of any of these elements will preclude the existence of a contract of employment.
Form contract of employment
Contracts of employment are not required to have any particular form. Consequently, they may be concluded orally or in writing.
Contracts of employment may be entered into for a definite or indefinite period. A contract for a definite period in principle terminates by operation of law upon the expiry of that period. The duration of a contract of employment for a definite period is thus fixed in advance. The duration of a contract for an indefinite period, on the other hand, is not. Consequently, it does not terminate by operation of law but upon notice.
The parties to a contract of employment, whether definite or indefinite, may agree to a trial period during which either party may decide, without sanctions, that the contract should not continue. A trial period must be agreed in writing. If the contract of employment is entered into for an indefinite period, the trial period is subject to a maximum of two months. If the contract of employment is entered into for a definite period, the maximum trial period depends on the length of this definite period. If the definite period is less than two years, the maximum trial period is one month. If the definite period is two years or longer, the maximum trial period will be two months.
If the duration of a contract of employment is not defined with reference to time, but, for instance, with reference to the completion of a certain project, the trial period may not exceed one month. Only pursuant to a collective bargaining agreement may a one month trial period be extended to two months. At all times, the trial period should be of equal length for both employer and employee. A trial period which is longer for one party than the other, or which exceeds the maximum length, is void.
Employer's obligations
The employer' primary obligation, to remunerate the employee, derives from the definition of a contract of employment given above. In principle, the parties are free to decide on the amount of wages provided that a certain minimum, as set forth in the Minimum Wages and the Minimum Holiday Allowance Act, is paid. Employees of 23 and over are entitled to this minimum wage and younger employees to a percentage thereof.
This Act also provides that an employer is, in principle, obliged to pay a holiday allowance equal to a certain percentage, currently 8%, of the employee's salary.
In addition to a holiday allowance, an employee is entitled to holiday. Annual holiday entitlement is equal to at least four times the number of days worked per week under the contract of employment. An employee who works five days a week is therefore entitled to a minimum of 20 days' holiday a year. It is the employer who determines, after consultation with the employee, the times at which the employee may take holiday. In the event of illness, an employee is entitled to receive at least 70% of his salary for a period not exceeding 52 weeks.
An employer may not discriminate between men and women, for example, with respect to pay. This obligation is laid down, inter alia, in Article 119 of the EC Treaty which provides that men and women shall be entitled to equal remuneration for the performance of the same work. In this respect, remuneration means basic salary plus all other benefits, whether in money or in kind, which an employer pays an employee by virtue of the contract of employment. Employers may not discriminate between men and women in any other respect either, whether this concerns the conclusion of a contract of employment, the provision of training facilities, other conditions of employment, the policy with respect to promotions, or the termination of the contract of employment.
The employer is under a further obligation to take measures in connection with the safety of the enterprise. This obligation refers to the lay-out and maintenance of the work place, the materials to be used in the course of the work, and also the instructions to be given to the employee in connection with this work, and is aimed at protecting the employee, insofar as possible, against injury and disease.
If an employer fails to prove that he has fulfilled this obligation or fails to prove gross negligence on the part of the employee, he will be liable for any damage suffered by an employee.
An employer is not under an obligation to provide an employee with actual work. It will nevertheless often be in the employee's interest to perform work. This will be the case, for example, if his salary is performance-related or performance will increase the likelihood of his retaining the employment or will favour his position in the labour market. Case law has established that an employer may not prevent an employee from performing the agreed work without a well-founded reason, failing which, he will, broadly speaking, be obliged to put the employee to work. If a well-founded reason does exist, a weighing up of the employer's interest in not allowing the employee to do the agreed work, on the one hand, and the employee's interest in performing that work, on the other, will usually ensue.
Employee's obligations
An employee is under an obligation to perform the agreed work to the best of his abilities and to follow the employer's instructions. An employee will not be liable to an employer for damage he causes to third parties in the course of his employment unless the employer proves that this resulted from willful or reckless misconduct on the part of the employee.