The Kingdom of Netherlands is a modern European country, formerly colonized by Spain up till the 16th century. It was an instituting member of both the NATO and EU and contributed to the introduction of the Euro. Bordering Belgium (which was initially part of it), as well as Germany, Netherlands has a land area of over 41,000 square kilometers. It is composed of coastal lowlands and under-sea-level polders, which add to its total agricultural landmass. The area comprising the four large cities of Amsterdam, Rotterdam, The Hague, and Utrecht is the most densely populated.
The Dutch, followed by people from other EU states and Turkey, comprise the largest ethnic groups in the Netherlands, and Christianity is the most practiced religion. Over 91 percent of the country’s population lives in urban areas. The Netherlands has a parliamentary constitutional monarchy with four countries represented, namely Netherlands, Aruba, Curacao, and Sint Maarten. The country has a per capita GDP of $52,799 and a population of 16.8 million people. Agriculture and fishing are its largest exports. Trade-in goods and services make up 83 percent of their GDP.
In the Netherlands, a permanent contract is for an indefinite period of time. Notice must be given by employer or employee before the contract can be terminated.
Employers pay a lower unemployment insurance contribution for employees with a permanent written agreement and a higher one for employees with a flexible contract. The difference between the high and the low unemployment insurance premium is five percentage points. For all other employment contracts other than permanent employment ones, such as on-call contracts, the higher rate applies.
In the Netherlands, an employment contract (oral or written) establishes a legal relationship between the employee and the employer. It is mandatory to provide a written contract within 1 month of concluding the employment start date.
The mandatory written or electronic contract includes the following information:
Name and place of residence of employer and employee
Workplace location
Employee’s job and nature of the work
Usual working hours
Amount of salary and payment periods
The date the employee joined the company
Term of the contract (if for a definite period)
Length of the trial period (if applicable)
Annual leave and how it is calculated
Length of notice period for employee and employer
Pension scheme (if applicable)
Non-compete or non-solicitation clause (if applicable)
Applicable collective agreements
Some clauses are only valid if agreed in writing, for example, a non-compete or non-solicitation clause. Such clauses can only be included in permanent employment contracts, and not in fixed-term contracts. If the employer wants to include these clauses in fixed-term contracts, they must provide a business necessity in the contract.
In the Netherlands, a temporary contract is concluded for a fixed period. Employers and employees agree on the length of the agreement, which automatically ends by operation of law. Sometimes the precise final date is unknown; in that case, the contract ends upon completion of the project. Temporary contracts can also be made to replace an employee who is ill or on maternity leave.
Neither the employee nor the employer may terminate the contract before the final date unless they have agreed to such termination in advance. If the contract term is 6 months or longer, written notice must be given at least 1 month prior to the end date, whether or not the contract will be renewed. This obligation is known as the advance notice obligation under the Dutch Civil Code. A temporary contract can only be extended a maximum of 3 times within 3 years.
Temporary employees are entitled to 70% of their wages for 2 years if they become sick, unless otherwise stipulated in a collective labor agreement. Collective agreements may provide higher rates
Temporary agency work is governed by the Civil Code and, where applicable, collective labor agreements. The agency employs the worker and places them with a client employer, where the worker performs the work under the client's supervision and direction.
Agency workers are entitled to the same remuneration as employees who are working directly for the client employer. For employment security for agency workers, there is a “Phase System” that is governed by three phases under the ABU collective labor agreement and Civil Code.
In the Netherlands, a probationary period must be agreed to in writing by employer and employee. In case of open-ended employment contracts and fixed-term contracts of 2 years or more, probationary period cannot exceed 2 months. In case of temporary contracts with no specific termination date or fixed-term agreements of two years or less, probationary period cannot exceed 1 month. No probation may be arranged for fixed-term contracts of 6 months or less.
Employment contracts can be terminated without notice or reasonable grounds during the probationary period by either party.
In the Netherlands, the weekly working time may not exceed 48 hours, on average, in a 16-week reference period and 55 hours, on average, during a 4-week reference period, including overtime. Employees can work a maximum of 12 hours in a shift and 60 hours in a week. Collective agreements may specify other daily and weekly hours that are still subject to the daily and weekly 12- and 60-hour limits, respectively. A longer workweek is possible as long as a rest period of at least 72 hours is provided every 14 days. The length of a night shift cannot go over 10 hours.
Working hours for young employees cannot be longer than 8 hours per shift or 40 hours per week over a 16-week reference period.
Employees can request their employers to work remotely if they meet certain criteria – employed with companies with more than 10 employees and have worked for more than 6 months. The statutory regulation for working from home does not apply to companies with fewer than 10 employees.
During the first year of employment, the employee is entitled to paid leave of 4 times their workweek (the number of days/hours per week). It means full-time employees earn annual leave of at least 20 days annually (based on a workweek of 5 days). Employment contracts and collective agreements provide additional annual leave.
Annual leave can be carried over to the first half of the next year, otherwise, they expire.
Employees are entitled to a minimum of 8% of their annual salary as vacation pay in addition to paid vacation entitlement. Vacation pay may be reduced if an employee earns more than three times the annual equivalent of the minimum wage. A collective labor agreement may state that there is no entitlement to holiday pay. They must receive at least 108% of the minimum wage in that case.
In the Netherlands, employees are entitled to 2 years of paid sick leave, with 70% of their wages or at least the minimum wage. Temporary employees are also eligible for this benefit.
Employees cannot be dismissed during sick leave, except when they do not cooperate with their reintegration plan.
In the Netherlands, female employees are entitled to a minimum of 16 weeks – up to 6 weeks before birth and 10 weeks after birth. In the case of multiple births, employees are entitled to a total of 20 weeks of leave. In case of termination of pregnancy at 24 weeks or after and stillbirth, employees are entitled to 16-week maternity allowance.If pregnancy ends before that, employees are entitled to sickness benefits.
An employee must notify her employer 3 weeks before taking maternity leave and no later than the second day after the delivery. During maternity leave and birth leave, the employee is entitled to Employment Insurance Agency benefit of 100% of the daily wage, without exceeding the maximum daily wage of EUR 309.91 (Euros).
An employer cannot dismiss an employee for pregnancy. The employment contract may not be terminated during the term of maternity leave and for 6 weeks after maternity leave.
In the Netherlands, the partner of a woman who gives birth (or multiple births) is entitled to paid paternity leave for the number of hours working per week (5 days on a full-time basis). A collective agreement may provide for longer paid or unpaid paternity leave. This paid leave can be taken any time in the first 4 weeks after the birth of the child.
Male employees are also entitled to 5 weeks of unpaid leave in the first 6 months after the birth of their child (the same duration for multiple births). Employees who take unpaid leave can claim benefits from the Employment Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV) for up to 70% of their salary, with a ceiling of 70% of the maximum daily wage, EUR 309.91.
The employee must notify the employer at least 4 weeks in advance in writing that he is taking the additional paternity leave, indicating when the leave starts, how many weeks of leave is requested and how is it spread over. Employers have the right to change the leave up to 2 weeks in advance, but only in the case of compelling business or service interests.
The required notice period provided by the employer depends on the length of employee service, as follows:
1 month for less than 5 years of service
2 months for more than 5 but less than 10 years of service
3 months for more than 10 but less than 15 years of service
4 months for 15 or more years of service
Employees may terminate an employment contract with 1 month’s notice. The notice period can be increased or decreased if put in writing. However, it cannot exceed 6 months. Fixed-term employees may be required to give notice to terminate their contract before expiry, if it is included in their contract.
In the Netherlands, the employer must provide a transition payment to the employee upon dismissal or the non-renewal of a temporary contract. This regulation applies to both permanent and temporary employees. The employee is also entitled to a transition allowance if they resign due to serious culpable acts or omissions by the employer. Employees are entitled to a transition payment upon dismissal from the first day of their employment contract. This also applies if they are fired during their probationary period.
The amount of transition pay depends on the employee's gross salary and the duration of their service. The reimbursement is capped at EUR 102,000 gross.
