The Netherlands: Temporary employment contracts: the “chain rule” after 1 January 2020
The chain rule stipulates when successive, temporary employment contracts are converted into an employment contract for an indefinite period of time. At the moment, this is the case when more than three temporary employment contracts succeed each other or if the duration of the successive contracts exceeds a period of two years. With the introduction of the Balanced Labour Market Act (Wet arbeidsmarkt in balans) this latter period has been extended from two to three years.
2 x 3 x 6
An employer can agree to three, successive, temporary contracts with an employee without a permanent contract being created. In the event of a fourth contract, the employee will automatically have a contract for an indefinite period of time. This applies, provided the contracts succeeded each other with intervals of not more than six months. In addition to this, when the duration of the successive contracts is more than two years, intervals of six months or less being incorporated in the calculation, a permanent contract will be created. The current chain rule can therefore be summarised as follows: a maximum of 2 (years) x 3 (contracts) x 6 (months interval).
Change 1: 3 x 3 x 6
With the introduction of the Balanced Labour Market Act the maximum period of the chain rule will be extended from two to three years. Therefore, from 1 January 2020 onwards, the chain rule will read as follows: a maximum of 3 (years) x 3 (contracts) x 6 (months interval).
Change 2: temporary recurring work
In the case of seasonal work the interval of six months can be shortened to three months (3 x 3 x 3). The government is of the opinion that it should not only be possible to be able to deviate from the length of the interval with regard to seasonal work, but also with regard to other recurring temporary work that can be carried out for a maximum of nine months per year. If the nature of the work requires it, the interval can be shortened to three months in the CLA. In this connection jobs in the cultural sector come to mind (e.g. jobs that depend on the theatre season) or training coaches at sports clubs who, for instance, have a three month (winter)break. It is up to the CLA-parties to decide for which specific recurring temporary jobs the interval can be reduced.
Change 3: substitute teachers in primary and special education
Currently, it can be determined in a CLA that the chain rule is not applicable to substitute teachers in primary and special education, who replace a teacher due to illness. It appears from evaluation that this exception has been used on a large scale. For this reason the government considers it undesirable to make the exception dependent on CLA negotiations. By the introduction of the Balanced Labour Market Act temporary substitute teachers in primary and special education, who replace a teacher due to illness, are legally excluded from the chain rule.
No transitional law
The changes referred to above have immediate effect as from 1 January 2020. This means that a chain rule of three years applies to an employment contract ending on or after 1 January 2020, even if the employment contract commenced before 1 January 2020. This is different if, under current law, the chain rule has been deviated from in a CLA, in favour of the employee. In that case those CLA provisions will prevail.