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Dutch Employment Contracts and Essentials to Know About

In the Netherlands, fixed-term employment contracts provide different levels of job security across three distinct phases: in Phase A, the employer has the freedom to terminate the contract, while in Phase B a reason is required for termination and the right to severance pay exists, and in Phase C, higher job security is provided.

Permanent Vast Contracts cannot simply be canceled by your employer; they must adhere to specific rules regarding the notice period and dismissal procedures.

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Last updated: 02/05/2024

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Guide to the Dutch Employment Contract

In the Netherlands, fixed-term contracts are divided into three phases: “Phase A”, “Phase B”, and “Phase C”. These contracts offer different levels of job security to employees.

“Phase A” is the initial stage of a fixed-term contract and can last up to 52 weeks (one year). During this phase, the employer can terminate the contract at any time without providing a reason and is not obligated to pay severance. However, the employee can terminate the contract at any time with notice.

After completing “Phase A”, an employee can move to “Phase B”, which can last up to three (3) years. During this phase, if the employer terminates the contract, the employee has the right to a notice of termination and severance pay. “Phase B” provides a higher level of job security, and the employer must provide a valid reason for termination.

“Phase C” is the final stage and is generally offered after the completion of “Phase A” and “Phase B”. This contract provides the employee with higher job security. In “Phase C”, the employee has the right to a notice of termination and severance pay, and the employer must show a strong reason for termination.

When Does My Temporary Contract Become Permanent?

In the Netherlands, a worker’s temporary contract automatically becomes a permanent contract when they receive more than three consecutive temporary contracts, or multiple temporary contracts from the same employer over a period longer than three years. However, if different rules are set in a collective labor agreement (CAO), this may vary.

Permanent Contract after Three Consecutive Temporary Contracts

An employee automatically earns a permanent contract under the following circumstances:

• If they have received more than three temporary contracts from the same employer
  If more than three temporary contracts have been received for the same type of job from consecutive employers (For example, if an employee initially worked through an employment agency and then was employed directly by the employer. You can get free support from us to find out if this applies to your situation)
• The break between contracts is a maximum of six months. For temporary recurring jobs that are not limited to seasonal work and can be performed for up to nine months of the year, the maximum break between contracts can be three months (This clause must be specified in the collective labor agreement [CAO])
• Unless other conditions are specified in the collective labor agreement (CAO). (Agreements in the Collective Labor Agreement [cao] take precedence)

Permanent Contract after Three Years of Temporary Contracts

An employee automatically earns a permanent contract under the following circumstances:

• If they have received multiple temporary contracts from the same employer over a period longer than three years, or temporary contracts for the same type of job from consecutive employers (For example, if an employee initially worked as a “uitzendkracht” (temp worker) through an employment agency and then was employed directly by the employer)
• The break between contracts is a maximum of six months. For temporary recurring jobs that are not limited to seasonal work and can be performed for up to nine months of the year, the maximum break between contracts can be three months. (This clause must be specified in the collective labor agreement [CAO])
• Unless other conditions are specified in the collective labor agreement (CAO). (Agreements in the Collective Labor Agreement [CAO] take precedence).

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At DYC Legal Consultancy, we provide legal support in preparing, reviewing contracts under Dutch law, and resolving issues related to these matters for our expat clients.

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Permanent Contract (Vast Contract)

A permanent contract (Vast Contract) does not include an end date for the termination of employment. This contract only ends when you reach retirement age or if you terminate the employment contract yourself. Your employer cannot simply cancel a permanent contract; they must adhere to specific rules regarding the notice period and dismissal procedures.

Employees on a temporary contract have the same working conditions as permanent employees. Employers must inform employees on temporary contracts about vacant positions for permanent roles. This obligation does not apply to employers of temporary staffing agencies. Tenants are obliged to inform temporary workers about vacant positions in the company in a timely and clear manner.

What are the Differences Between a Temporary Contract (Tijdelijk Contract) and a Permanent (Vast Contract) Contract?

A temporary contract is valid for a specific duration, for example, a few months or one year. Typically, neither employees nor employers can cancel a temporary contract during the interim period. A permanent contract, on the other hand, continues until terminated by either the employee or the employer. A permanent contract is also known as an indefinite contract.

A permanent contract ends when an employee resigns or when the employer terminates the contract. (The employer must comply with dismissal rules.)

Consecutive Employer (Opvolgend Werkgeverschap) Situation

Consecutive employment can occur in situations such as a company takeover or when an employee first works through an employment agency and then starts working directly under an employer. This means the employee transitions to a different employer but continues performing the same or similar tasks.

Whether a situation of consecutive employment exists depends on certain conditions.

Contracts for Beroepsbegeleidende Leerweg (BBL)

Contracts for the Beroepsbegeleidende Leerweg (BBL) do not count for the chain rule (ketenbepaling). It does not matter when the contract was made or ended.

Employees Under 18 Years of Age

The chain rule does not apply to employees under 18 who work an average of no more than 12 hours per week.

Are There Different Rules for Temporary Contracts in the Collective Labor Agreement (CAO)?

Different rules for temporary contracts can be set in the Collective Labor Agreement (CLA). For example, it can be specified that an employee can receive a maximum of six consecutive temporary contracts and that temporary contracts can last up to four years.

Deviation from Ketenbepaling in the Collective Labor Agreement (CAO)

There are limited ways to deviate from ketenbepaling through a Collective Labor Agreement (CAO). A CAO can deviate from ketenbepaling in the following situations:

Temporary Employment Contract

In the collective labor agreement (CAO), the number of three contracts can be increased to a maximum of six, and the two-year period can be extended up to four years.

Operation of the Business

Sometimes, the nature of the business’s operation may necessitate additional temporary contracts or longer temporary contracts. In this case, a CLA can allow for a maximum of six (instead of three) temporary contracts, and the maximum duration for temporary contracts can be extended to four (instead of two) years.

Non-application of Ketenbepaling

Some sectors, such as professional football, operate exclusively with temporary contracts. Different rules apply for working with temporary and permanent contracts in these sectors. The government decides which functions and sectors this situation is suitable for. Subsequently, these different rules are included in the relevant CLAs.

As of August 1, 2018, for teachers working on temporary contracts in place of a sick teacher in a primary school, if a CLA is applicable for primary schools, multiple temporary contracts do not result in a permanent contract. You can learn more about changes to the ketenbepaling regulation for special functions.

As of January 1, 2020, the law has been amended to specify that teachers working temporarily in place of a sick teacher in primary or special education will not automatically have a permanent contract after multiple temporary contracts. This will now apply without needing to be specified in the CLA.

Management Positions

If a management position in a company or organization is concerned, deviation from the two-year period is possible with a written agreement (including CLA).

Education

If an employment contract is primarily made for the purpose of educating an employee, the ketenbepaling may be determined to be entirely or partially non-applicable through a CLA.

Rotational Temporary Work

If “rotational temporary work,” which can be done for up to nine months a year, is concerned, the interim period can be shortened to three months by a CLA. This is not limited to seasonal work only. There should be consensus in the CLA about this.

As is evident, employment contracts in the Netherlands are subject to a series of legal requirements and obligations, and it is important to seek legal advice from a qualified attorney before signing any contract. Consulting with a qualified lawyer helps ensure that you fully understand the implications of the contracts.

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At DYC Legal Consultancy, we provide legal support in preparing, reviewing contracts under Dutch laws, and resolving issues related to these matters for our expat clients.

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Dutch labor unions, Dutch employment law attorneys, Dutch employment relations, recruitment procedures, employer employment contracts, employee employment contracts, employer rights, and employment law consultancy in the Netherlands, Dutch employment contract examples, labor law violations, and employee compensation in the Netherlands. Employment law is an important branch of law that regulates the relationships between employees and employers and aims to balance working life. Employment law is based on laws and regulations that determine the rights and protections of workers, as well as the obligations of employers. These regulations aim to provide a fair and honest relationship between employees and employers, and to strengthen stability and confidence in the labor market..