What you need to know about a labour agreement

By: Together Abroad 22-03-2012 1:03 PM
Categories: Tips for internationals,

The labour agreement describes the relation between an employer and an employee.
An agreement needs to comply with three requirements for it to be a labour agreement:

  • the employee himself carries out work for the employer;
  • the employer pays the employee for the work carried out;
  • there is an authority relationship between the employer and the employee.

A labour agreement may be arranged either in writing or verbally. However, it is wise to have a labour agreement in writing. There are some advantages to having the labour agreement in writing because a number of rights and duties are then recorded.

The employer is obliged to have a number of issues in writing for the employee.

  • name and address of both the employer and the employee
  • the address of the work location
  • the employee’s job description
  • the number of hours an employee works daily or weekly
  • the amount of pay and when it is paid out
  • date of commencement of employment
  • term of the employment contract ( if it is a temporary contract)
  • term of the (possible) trial period
  • amount of holiday allowance
  • the number of free days or the way in which the claim to free days is calculated
  • term of period notice or the way in which this term is calculated
  • (possible) pension scheme
  • (possible) non-competition clause
  • the collective labour agreement (CAO), should it be applicable

Fixed term labour agreement
In a labour agreement for a fixed term an end date is recorded. The agreement is therefore ended legally.
It is possible to enter into a several fixed term labour agreements one after the other without it turning into a permanent contract. There is, however, a limit to this. A temporary contract automatically changes into a permanent contract in the following situations:

  • After three fixed term labour agreements, entered one directly following the other or within a three month period, the fourth contract automatically becomes a permanent contract.
  • If during the second or next fixed term labour agreement the term of 36 months is exceeded, the contract automatically becomes a permanent contract. The term between contracts should not exceed a three month period.

Please note: Should the first temporary contract of 36 months or longer be followed immediately by a temporary contract of three months maximum, then the arrangement in which the contract is automatically changed to a permanent contract is not valid. Should the new contract exceed this three month term, then the employee has a right to a permanent contract.

A cao (collective labour agreement) may state that a permanent contract can only be realized after six instead of three temporary contracts. Or after 42 instead of 36 months.

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