CHANGES TO THE DUTCH LABOUR LEGISLATION
In the weeks ahead, there will be some changes to the Dutch Employment Legislation and these changes will be take effect from the 1st of July 2014. The intent of these changes is increase job security by putting a check on flexible employment practices thereby facilitating a natural progression for employees in The Netherlands from fixed term contracts to more permanent job contracts.
It is advisable to keep abreast of these changes as they will provide all stakeholders in the job market with the tools and information to make informed decisions about the employment relationship. Please review the information below and take note of the areas that are applicable to you.
1. Probationary Period:
The probationary period for new employees will no longer be permitted for contracts of 6 months or less. The implication of this is that probationary period will only be legal for employment contracts longer than 6 months in duration.
2. Notification period:
For employment contracts of 6 months or longer, a notification period of one month in advance is required for an employer to inform the employee as to whether or not their employment contract will be continued. If the employer fails to do this, he is obliged to pay a fine of one months salary to the employee. To claim this payment, the employee must submit the claim for a ‘notification fine’ to the court within two months.
3. Consecutive Fixed Term Conracts:
With the current legislation, a fixed term employment contract can be converted to an indefinite employment contract for two reasons i) if the duration of the contract has exceeded 3 years ii) if more than 3 fixed term contracts are concluded consecutively with intervals of three months or less. With the new changes in effect, Fixed contracts will be coverted by law to open-ended employment contract after a maximum of 3 temporary contracts within a two-year period and with an interval of less than 6 months. In effect, the chain rule which is curently 3X3X3 will be changed to 3X2X6.
4. Non-Compete Clause:
Non-Compete clause in fixed term contracts will be prohibited unless the employer can prove that there are over riding business concerns which require such protection.
5. Transitional Remuneration
This is paid to employees in case of non renewal of a fixed term contract that has lasted for 2 years or longer. Over the first 10 years, the employee is entitled to receive 1/3 of gross monthly salary for every year of service. This remuneration is capped at Eur75,000 or one year annual salary for employees that earn more than Eur 75,000 per year. Transitional Remuneration must always be paid to employees in case of termination or non renewal of the employment contract by the employer. No Transitional remuneration may be paid if, the employer has been declared bankrupt or if due to dismissal owing to culpability on the part of the employee.
6. Appeal following dismissal
The current system does not provide any opportunity for appeal after a court has issued a judgement in termination proceedings. Under the new regulation, an employee can initiate an appeal and put forward an appeal in cassation in order to rescind a granted dismissal. In addition to this, an employer may initiate proceedings for a rescission if a request for permission to give notice to employee has been denied by the UWV, this also works in reverse as an employee may also intitiate legal proceedings if permission to give notice has been granted to employer.
7. Termination with Mutual consent:
Under the new legislation, an employer and its employee can mutually agree to terminate the employment contract by way of a severance agreement. However the employer must include in the termination agreement that the employee has a termination period of 14 days after the date of the termination agreement without stating reasons. This means that the employee has the right for 14 days following the termination agreement to state that they do not consent to the termination agreement. If such a termination period is not included in the termination agreement, this period will be extended to 21 days.
If you have any concerns or questions on this new legislation, please feel free to contact the Together Abroad team.
References:www.eversheds.nl