An employment contract under Dutch law may be concluded orally or in writing. Pursuant to Article 7:655 of the Dutch Civil Code, however, the employer will nonetheless need to inform the employee in writing with respect to the following (among others) terms and conditions:
- the name and residence of the parties;
- the place where the work is to be carried out and if this is not fixed, the mention that the employee will work in various places;
- the position and a job description;
- the hiring date;
- if there is a probationary period: the duration and conditions;
- if the employment contract is for a fixed period of time: the time period;
- If the employment contract is entered into for an indefinite period;
- the vacation rights or the method of calculating vacation rights;
- the right to other paid leave, or the method of calculating this right;
- the duration of the notice periods to be observed by the parties or the method of calculating these periods;
- the salary including the specific elements, the payment intervals, the method of payment and, if the remuneration depends on the results of the work to be performed, the amount of work to be performed per day or per week, the price per item and the time that will be involved in performing the work;
- the customary number of working hours per day or per week;
- If the employee will participate in a pension scheme;
- the conditions and payment for working overtime;
- if the customary numbers or working hours per day or per week are unpredictable: the mention that the working hours are adjustable, the number of guaranteed hours and the payment for work on top of those guaranteed hours and the days and hours on which the employee can be obliged to work;
- the employee’s pension rights (if applicable);
- if the employment contract is a temporary employment agency contract, and if so the identity of the user undertaking;
- if the employment contract is an on-call contract;
- the Collective Labour Agreement (if applicable);
- the right to training offered by the employer (if applicable).
An employment contract can be agreed upon for a fixed period of time (fixed-term contract) or for an unspecified period of time (open-ended/permanent contract). If the identity of the employment has not changed (for example, with respect to the work to be performed, salary and secondary employment conditions), a fixed-term employment contract that follows an open-ended employment contract (that has not terminated in a way as provided by Article 7:677 paragraph 4 of the Dutch Civil Code) will become an open-ended employment contract by operation of law.
Pursuant to Article 7:668a of the Dutch Civil Code, a fixed-term employment contract will automatically convert into an open-ended employment contract if:
- a chain of temporary employment contracts covers 36 months or more; or
- a chain of three fixed-term employment contracts is continued.
A chain is a series of fixed-term employment contracts that succeed each other with no more than six months in between. This rule is also applicable to employment contracts between an employee and various employers that must reasonably be deemed to be each other’s successors with regard to the work performed.
It is also possible to shorten the interval period of six months to three months in a Collective Labour Agreement, if the nature of the activity so requires. This applies specifically to activities that can be performed for a maximum of nine months per year and cannot be consecutively carried out by the same employee for a period exceeding nine months per year, for example, seasonal labour.
One month before the termination of a fixed-term employment contract of six months or longer, an employer must notify the employee whether the employment contract will be extended or not (in Dutch: aanzegverplichting). If so, the employer must also inform the employee about the terms and conditions for extension. If the employer does not inform the employee, the employee has a right to claim salary during the period in which the employer is in violation (up to a maximum of one monthly salary). For fixed-term employment contracts shorter than six months or contracts with no fixed end date, such as for the length of a specific project, this notification is not required.
A probationary period must be laid down in writing. In case of an open-ended employment contract, an employment contract for an indefinite period of time or an employment contract fixed for a period of two or more years, the maximum probationary period is two months. In employment contracts for a fixed-term of more than 6 months, but less than two years, the maximum probationary period is one month. It is not possible to agree upon a probationary period in an employment contract that has a term of six months or less.
The probationary period for both the employer and the employee should be equal. A probationary period is not valid if the employee involved is already employed at the employer, but at a different position and will be carrying out more or less the same work that he/she has done elsewhere within the company. A probationary period conflicting with the law is null and void.
Dutch law provides for the following statutory notice periods for an employer:
- fewer than 5 years of service: 1 month
- more than 5 years, but fewer than 10 years of service: 2 months
- 10 or more years of service, but fewer than 15 years of service: 3 months
- 15 or more years of service: 4 months
The employee must take into account a notice period of one month. A longer notice period may be agreed upon if it is laid down in writing. In that case, the notice period the employer has to observe must be twice the notice period the employee has to observe.
The notice period may be reduced under a Collective Labour Agreement. Please note that any variance should be within statutory limitations, in default of which the statutory notice period is applicable. Unless agreed otherwise, the notice period starts running at the beginning of the month following the month in which notice is given.
In case the employee has reached the retirement age during his or her employment, the applicable notice period for the employer is one month.