New limits on the use of fixed-term employment contracts | HR news

By: Together Abroad 02-02-2015 12:21 PM
Categories: ** HR daily news, ** HR Legal Clinic,


In case of offering or renewing of a fixed-term contract mind the new “chain provision” (ketenregeling). This rule controls how many fixed-term contracts can be closed.

As from 1 July 2015 the number of fixed-term contract remains three; the maximum duration will be two years, instead of three years. This means that a fixed-term contract will be converted into an indefinite contract, automatically, if either the duration of successive fixed-term contracts exceeds two years or more than three fixed-term contracts are concluded following one after another with intervals of six months or less. Contracts will be viewed as successive if six months or less have passed between two contracts; currently this is three months or less.

A third contract for one year, entered into before 1 July 2015, falls under the current law and in principle will not change into an indefinite contract; it will end on the agreed date.

Contracts that are concluded or renewed after 1 July 2015 will fall under the scope of the new legislation. There are transitional rules. For that matter it is important to look at how long a chain has already been. E.g. If a contract is closed on or after 1 July 2015 within six months or less after the end of a previous contract, then previous contracts can be regarded as part of the new chain.

There are some exceptions to the new rule and deviation is allowed to some extent at collective level. Mind also those more flexible opportunities provided in an applicable Collective Labour Agreement can still be used until 1 July 2016, unless it expires earlier.
To get around this “chain provision” it was sometimes thought to simply sign a fourth contract and to make specific arrangements alongside to prevent a permanent position to follow. This was done by making an additional agreement about the duration and termination of the fourth contract, considering that the employer was willing to extend the contract provided that an end date was agreed upon in advance. This means, in fact, a temporary contract once again. This practice seemed allowed with reference to a decision of the Court of Appeal in Den Bosch in 2013 (Yachts Builders-judgment). However, the Dutch Supreme Court has cut off this "short cut" in a ruling early this year. A construction like this offers no way out, that much is clear.

It can make a difference if a fixed-term contract turns out to be converted in an indefinite one. It is important to anticipate and avoid undesirable effects, especially in view of the more rigid dismissal law as from 1 July 2015. Employers should also take into account the new obligation to pay (the so-called: “transition”) allowance in case of non-renewal after at least two years of employment.

Feel free to contact us for assistance or advice.
Ruig+Partners advocaten
Anna Kielczewska
www.ruigpartners.nl

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