25 Key Questions About Dutch Employment Law Answered

POV; You’re not Dutch, you’re not familiar with the rules of employment. You get that job and an employment contract, but you’re a bit scared. This is all understandable, of course. You don’t understand all the legal terms. You start working, and there are all these rules that you’re not fully aware of, and it’s tough moving to a new country with all these labor laws that you’re unfamiliar with.

That’s why we’ve compiled this helpful list of frequently asked questions about Dutch employment law to help ease your mind and get you up to speed.

Dutch Employment Law Questions for Employees

1. When does a contract of employment exist in the Netherlands?

In the Netherlands, there is an employment contract when an agreement exists between the employee and employer whereby the employee performs tasks for the employer, is paid, and there is some degree of subordination. In most European countries, there are no legal conditions for a contract of employment, and this is so in the Netherlands. If you are working for an employer, are paid a salary, and there is a level of subordination, a contract of employment can exist without it being in written form.

2. Can your employer unilaterally modify your working conditions?

Your employer can’t unilaterally change your working conditions, such as a relocation. Typically, an employer cannot vary your contract. However, this can be a possibility in a situation where there is a “business need” greater than your own or where there is a change clause in your contract. The employer must carefully assess this, and a good reason for a variation must be stated.

3. How many fixed-term contracts can an employer give you before a permanent contract is formed automatically?

In the Netherlands, you can have a maximum of three temporary contracts for a maximum period of three years. After that, your contract is converted to a permanent contract. This law ensures that temporary contracts cannot be prolonged endlessly without job security.

4. Can your employer terminate your contract? And what about in a trial period?

Simply, as a general rule, an employer cannot terminate you. The Netherlands is one of the few countries where employers need permission. It’s in the law what grounds an employer must have, and then he has to go either to the Employee Insurance Agency (UWV) or the cantonal court (Kantonrechter). During the trial period, the employer cannot legally terminate a contract without prior permission within that time. For this reason, any trial period (maximum is generally two months) should be clearly defined in writing to avoid disputes.

5. How does a contract of employment end then?

Well, you can give notice, which is usually one month, depending on the terms of your contract. This is the case even if you have a temporary or permanent contract.

For an employer to terminate a permanent contract, it’s a big deal; they have to get permission from a governmental organization, either a cantonal judge or the UWV (and then take the notice period into account). For a temporary contract, the employer just needs to wait until the end of the temporary contract and not renew unless the possibility of an earlier termination is in the contract itself.

6. If a company rescinds their signed offer contract before the start date, is there a basis to bring it to court?

This all depends on whether you have a trial period in the contract. If there is no trial period in the contract, you can bring them to court and ask the company to pay wages that would otherwise have to be paid during the contract. They can rescind the contract even before the starting date if there is a trial period. However, there are situations in which the employer has to pay damages. For example, you’ve had many talks with them, and you flew over from one place to another to have the negotiations, they told you that you are the perfect candidate, you made arrangements to come and live here and so forth….. then you can go to court. But they can rescind the contract if you have a notice or trial period. If you have a high position and leave a company to work for someone else, you can take them to court. If you were unemployed, it’s different than if you were employed. And it also depends on your position, the trust that has been given to you, the amount of money we’re talking about, whether you can go back to your old employer or not, and what that entails exactly……. for instance, were you the head of a department and that is no longer an option for you now, etc.

7. What is a settlement agreement (VSO)

A settlement agreement, or vaststellingsovereenkomst as it is called according to Dutch terminology, is a legal agreement used to terminate the agreement between employee and employer mutually. It offers the possibility of avoiding time-consuming and costly dismissal procedures (for the employer) and is thus usually requested by them. The VSO must contain certain specifics provided by the Dutch civil code, such as the terms for the agreement’s end, including date of end, date of final settlement, and compensation. The employee is provided a two-week reflection time after signing the agreement. During this time, the employee can withdraw from the agreement proposed. The agreement must also be neutrally formulated to show it was not an employee’s fault.

8. What is the minimum number of holiday days an employee is entitled to in the Netherlands?

In the Netherlands, the law requires full-time workers to take a minimum of 20 days of paid holiday. For part-time workers, this is prorated. In practice, most full-time workers get between 25 and 30 days (if lucky!) holiday, particularly those in better-paid jobs.

9. Is the employee responsible for finding a backup when they go on vacation or sick leave?

In Dutch employment law, employees are not responsible for finding a backup when they go on sick leave or vacation. The responsibility of staffing levels falls under the employer. When employees take accrued vacations or report illnesses, employers are required to manage staffing needs and business continuity, not the workers.

10. Can the employer mandate the employee share travel plans during vacations?

Under Dutch labor law, sharing holiday travel plans with your employer is not a legal requirement. Employers may approve or refuse holiday requests based on business requirements, but employees are not obligated to provide their exact holiday plans. Sharing holiday plans would normally be a matter of understanding between the employer and the employee.

11. Can I still take vacations if I am sick from burnout?

Yes. Everyone in the Netherlands is entitled to vacation. Dutch law recognizes burnout as a valid reason for sick leave, so you are permitted to take a holiday while you are sick. However, you should discuss your holiday plans with a company doctor (bedrijfsarts or arboarts) and obtain their approval. You should also continue to apply for a holiday in the same way you usually would. They can refuse if your employer feels the specific holiday request could upset your recovery or reintegration. The company doctor can also assess this and make a decision. If there is no barrier, you are free to take the holiday entitlement.

12. Is it legal for the employer to ask employees not to discuss salaries with each other?

No law in the Netherlands prevents employers from including pay secrecy clauses in contracts or asking employees to keep their salary confidential. Still, the practice is in a legal grey area, and the legal situation is about to change radically as a result of the EU Pay Transparency Directive, which member states, including the Netherlands, must adopt by June 2026. The directive will outlaw pay secrecy clauses, provide employees with the right to ask about their pay level and the average pay level between comparable employees and oblige employers to be more transparent about pay and how it is set. Important to remember is that these developments are not yet in force.

13. Can employees in the Netherlands have side jobs?

Yes, employees in the Netherlands can work side jobs without permission from their employer. Since summer 2022, employees in the Netherlands are allowed to have side jobs unless their employer has a good reason to object. Employers can object to side jobs on certain grounds, for instance, working too many hours in the side job, which impacts your role, working for a competitor, or hindering reintegration after a period of sickness.

14. Are there rules governing salaries in The Netherlands?

Here’s a summary of the law on salaries: There are none. There is no law about wages in the Netherlands since wages are generally decided by Collective Labor Agreements (CLA) between employees and employers. For those workers who do not fall under the CLA, the wages are then negotiated by individual workers and employers. The only exception is the minimum wage, which differs depending on local or national law. The recently updated data shows the minimum wage is close to €2133.60 for a month based on a 36-hour week.

15. Are employees entitled to a salary increase annually in the Netherlands?

No, it is not obligatory for employees to receive an annual pay rise in the Netherlands. A pay rise is a general process in their company, perhaps a 3-4% rise given each year, but that would be at the discretion of the employer. Salary increments are typically negotiated, and an employer is not obliged to grant an increase unless it is stated in the contract or the CLA. However, an employee can raise the issue in the discussion if he feels discrimination is taking place. For example, another worker with the same skills and experience is being paid much more. You are perfectly in your right to do this.

16. What is a transition allowance?

In the Netherlands, transition allowance (or transition payment or severance pay) is a statutory payment made by employers upon the end or non-renewal of the agreement by the employer.

17. Are transition allowances also applicable for temporary or fixed-term contracts?

Yes, it doesn’t matter what kind of contract you have. Even if they’re not extending your contract, it just ends; they still have to give you a transmission period. The allowance is payable from the first day’s date of work regardless of the nature of the agreement and is calculated as one-third of the monthly salary for each yearly service, with partial-year service pro-rated.

18. I am in a performance improvement plan (PIP). How long is it expected to last?

The PIP typically lasts three to six months, closer to six months, depending on the work. Employees need to show major improvement, or it’s over, really. Employers cannot ask for unreasonable improvements beyond your control. This is to prevent them from acting unreasonably so that you don’t pass the PIP. Always be formally objective if you think that the employer is doing something unreasonable. You can do this by sending an e-mail.

19. Can a works council member be dismissed on cumulative grounds?

The answer is yes. Works council members are protected during the period of three years that they’re in the works council. That is a very strong, strict protection. Regarding cumulative grounds, there are situations where this is possible, but an employer would need to prove that it has nothing to do with you being in the works council – which is quite tough.

20. What is a non-compete clause?

This is a clause that prohibits you, after your employment contract has ended, from working in the same field of business, the same line of business, working for a competitor, to start your own business and competing with your former employer to work with former clients of your employer and so on. That’s a non-compete clause. And if you violate that clause, there’s usually a clause that says that you have to pay a sum.

21. Are “non-compete” clauses enforceable?

There are a lot of common misconceptions regarding the so-called “non-compete” clauses in employment contracts. Most of these clauses are inapplicable since they prevent the employee from performing a very broad range of work or are too unrelated to their former employer’s line of business.

Also, very often, employers exploit those clauses in settlement agreements, although they are non-enforceable from a legal perspective. Employees have to read the clauses in their contracts or settlement agreements carefully to give effect to the passage restrictions, which should be limited as far as competitive work is concerned directly with that of the previous employer. It must be noted that as of 2022, the Supreme Court in the Netherlands has already invalidated many broad non-compete clauses.

22. What are the legal obligations of employers in the Netherlands to provide a safe and non-toxic work environment, and what can employees do if they face such issues?

Employers here must provide a safe and non-toxic work setting. Employees who feel this is not being adhered to can take several actions. They can first report any issues to their employer, who is required to acknowledge and resolve a toxic work environment. They can also get in contact with the Labor Inspection (Arbeidsinspectie) if the employer does not rectify the situation in the first step. This body can intervene and ensure that the employer’s obligations are fulfilled. Alternatively, legal advice can be sought as the employer is liable for damages if they fail to provide a safe and non-toxic work environment.

23. What is the law on recording people in the Netherlands? I think my employer has behaved in a toxic manner, and I want to prove it.

The law is very lenient about that. Every judge will approve if you record a meeting without the others knowing, so long as it helps you get to the truth. If your boss says something incriminating on tape, such as, “You are a complete failure, and you’ll never find another job,” etc., then this is the kind of thing that may be useful to have on tape. So the answer is, yes, you can record it. There is no law against that in the workplace, provided you’re part of the conversation. It has to be a matter concerning you directly.

Dutch Employment Law Questions for Employers

24. How much sick leave do I pay?

In the Netherlands, an employer has to pay up to two years of sick pay. Normally, the employer must pay 70% of their employee’s last earned salary. In the first year of illness, the payment must be at least the statutory minimum wage, and some employment contracts or collective labor agreements (cao’s) may specify a higher percentage—sometimes up to 100% of the salary for a certain period. After two years, if the employee is still unable to work, they may be eligible for a WIA benefit (Wet werk en inkomen naar arbeidsvermogen), a government disability benefit. During the two-year continued payment period, the employer also has obligations to support the employee’s reintegration, such as offering suitable work and collaborating on recovery plans.

25. Do you suggest having legal insurance for an employer?

Insurance will be all worth it if you ever have to go to court. Why? First of all, it pays your bill; second, you have the right to choose your lawyer. You pay a monthly premium, of course. The employer usually pays 750 or 1500 euros, which is what it costs for an attorney to go through the whole settlement agreement, discuss it, negotiate, and so on. It may be worth considering if you’re an employer with several employees because you could be ‘good’ for several years with one or two procedures.

Moving to the Netherlands and familiarizing yourself with its employment laws can be daunting, especially if you have no experience with the local system. The good news is that you can make your working experience here much more straightforward with some insight into your rights and obligations.

Conclusion

Whether it is a matter of deciphering the terms of your employment contract, understanding your holiday entitlement, or knowing about side jobs, this guide clarifies the most common matters that will crop up. Even though you may be miles from home, the Dutch labor law is designed to protect employees and provide a transparent system for employees and employers. For additional support, especially if you have individualized questions about your Dutch employment contract or any conflicts that might ensue, it’s always ideal to consult with legal professionals in Dutch labor law. If you’re confused or in need of assistance in interpreting your rights, reach out to Flott Advocatuur.