Employment Law Q&A Country Guide

What are the laws and regulations governing employment, labour and industrial relations in [your country/jurisdiction]?

The most important laws and regulations an employer has to comply with are:

• The Dutch Civil Code: The Civil Code contains provisions on, for example, probationary period, holidays (annual leave), notice periods and dismissal.
• The Minimum Wage and Minimum Holiday Allowance Act: This Act stipulates that the employer must pay at least the minimum wage and minimum holiday allowance (statutory annual leave).
• The Working Hours Act: This Act regulates working hours and statutory rest periods.
• The Working Conditions Act: This Act lays down general provisions regarding a company’s health and safety policy.
• The Work and Care Act: This Act contains rules for leave and the different types of leave to which employees are entitled.
• Equal treatment Act: This Act provides, i.a., that no difference can be made in working conditions between men and women, between full or part time working employees, between employees with a permanent or temporary employment agreement and between people with and without disabilities or chronic diseases.

Which authorities and/or regulatory bodies enforce employment, labour and industrial relations laws and regulations in [your country/jurisdiction]?

The Social Affairs and Employment Inspectorate (in Dutch: Inspectie Sociale Zaken en Werkgelegenheid) supervises the compliance of employers with statutory laws and regulations concerning working conditions, working hours, labour relations and social security.

What are the main employment requirements under the employment laws and regulations in [your country/jurisdiction] that employers should be aware of?

• If an employee becomes medically incapacitated for work, the employer must adhere to the Eligibility for Permanent Incapacity Benefit (Restrictions) Act.
• Every employer is obliged to conclude an agreement with a health and safety service provider or company doctor. The company doctor assists the employer with the reintegration of sick employees.
• The employer must pay the employee a minimum wage and holiday allowance of at least 8% over the gross annual salary.
• The employer is responsible for compliance with the Working Hours Act subject to a fine.
• The employer must ensure a safe and healthy work environment.

What are some of the employment rights and benefits to which employees in [your country/jurisdiction] are entitled by law?

• An employee is entitled to at least 70% of the maximum daily wage during the first 104 weeks of his illness. During the first 52 weeks thereof the employee is entitled to at least the statutory minimum wage.
• Under certain circumstances an employee is protected against dismissal. E.g. during the first two years of an illness or during maternity leave.
• An employee is entitled to a transition payment if the employer has taken the initiative for the termination of the employment agreement or if a fixed-term contract has not been renewed at the employer’s initiative, provided that the dismissal was not prompted by seriously imputable conduct on the part of the employee.

What are the procedure and requirements to employ foreign persons and expatriates in [your country/jurisdiction]?

If the employee is not from the European Economic Area, the employer will usually have to apply for a work permit. If the employee does not have a citizen service number (in Dutch: burgerservicenummer), the employer must compel the employee to apply for one with the tax authorities. Furthermore, when parties enter into an employment agreement, they will have to agree, amongst other things, on which law is applicable to the employment agreement and which court is competent. The employer must also take into account that a foreign employee is entitled to the same terms of employment and working conditions as a Dutch employee.

What are the common avenues on which employers rely to terminate employment contracts?

An employer can terminate an employment contract amicably (thus without conducting formal legal proceedings) in two ways. Firstly, the parties can terminate the employment agreement by mutual consent and conclude a settlement agreement. Another possibility is that the employer terminates the employment agreement unilaterally, but the employee consents to the termination in writing. In both situations, the employee has a fourteen-day reflection period in which he can reneges his consent. In that case, the employment agreement continues as usual.

When the employee neither consents to the termination nor is willing to sign the settlement agreement, the employer may terminate the employment agreement unilaterally by obtaining a dismissal permit of UWV (UWV is an autonomous administrative authority and is commissioned by the Ministry of Social Affairs and Employment to implement employee insurances and provide labour market and data services) or by requesting the court to terminate the employment agreement.

How do employees terminate employment contracts? Are employees strictly required to fulfil the termination notice period (if any)?

If the employee has an employment agreement for an indefinite period of time, the employee may terminate the employment agreement without cause, taking into account the applicable notice period. A notice of termination takes effect at the end of a month, unless another termination date has been agreed in writing or has been ordered by common practice.If the employee has an employment agreement for a definite period of time, it must first be established whether the parties have agreed that termination before the end of the term is possible. If so, the employee can terminate the employment agreement contract prematurely with due observance of the notice period. 

The statutory notice period for an employee is one month, unless parties have contractually agreed differently. A contractual notice period may, however, not exceed six months. A notice period longer than one month for the employee is only valid if the notice period for the employer is at least twice the duration of the employee’s notice period. The parties may agree that the employee shall not be bound by a notice period at all.During the probationary period, the employee may terminate the employment contract with immediate effect.

What employment dispute resolution forums are there in [your country/jurisdiction] and what are their respective jurisdictions/purpose?

• Termination of the employment agreement due to economic reasons: the UWV or an independent dismissal committee set up by a collective bargaining agreement will rule on the dismissal request.
• Termination of the employment agreement after long term sickness: the UWV will assess the dismissal request.
• Termination of the employment agreement due to other (personal) reasons: the parties should bring legal proceedings with the subdistrict court.

What are the laws governing trade unions and collective agreements in [your country/jurisdiction]?

Trade unions and collective agreement matters are subject to the general provisions of labour law. These provisions are laid down in the Minimum Wage Act, the Working Hours Act, the Working Conditions Act, the Work and Care Act and in the Civil Code.

Must a trade union be registered in [your country/jurisdiction]? If yes, what is the procedure for it to be registered?

To establish a trade union in the Netherlands, only two employees and a notary are needed. The notary draws up the statutes for legal and any trade union that has legal personality can conclude collective (bargaining) agreements provided the trade union is authorised to do so under its articles. 

What are the key elements to be incorporated in a trade union agreement?

Many companies are part of a collective bargaining agreement. In this written agreement, between one or more employers and one or more trade unions, labour conditions for all employees are set out, such as wages, payment for overtime, working hours, probation period, pension, holidays, and education. The provisions in a collective agreement are often more favourable for the employee than those prescribed by the Dutch Civil Code, but they may not contradict statutory law.

What trade union dispute resolution forums are there in [your country/jurisdiction]?

Many collective bargaining agreements stipulate that disputes relating to the interpretation of the collective bargaining agreement shall be submitted to a committee set up under the collective agreement.

When an employee’s wages are unpaid by the employer, what are the legal options available to the employee?

The employee can first summon the employer to pay the wages immediately. If the employer fails to pay, the employee can bring a claim in preliminary relief proceedings. The hearing will usually be held within four to six weeks (or sooner in more urgent matters) and – except when the judge decides that an immediate judgment is required – the judge rules normally within two weeks after the hearing.

What are the types of dismissal cases in [your country/jurisdiction]?

• Dismissal during the probationary period.
• Dismissal with immediate effect.
• Dismissal for economic or organizational reasons.
• Dismissal due to long-term incapacity for work.
• Dismissal due to other (personal) reasons (inadequate performance, damaged working relationship, misconduct of the employee).

What are the factors taken into account in determining the types of dismissal cases in [your country/jurisdiction]?

The grounds for dismissal are exhaustively mentioned in the Dutch Civil Code. The cause for termination also determines which authority assesses the termination. 

When an employee has been unfairly dismissed, what are the legal options available to the employee?

The employee may bring legal proceedings to annul the dismissal. The employee can also opt to acquiesce in the termination of his employment agreement and start legal proceedings in order to be awarded the transition compensation and fair compensation or conclude a settlement agreement with the employer in which the parties mutually agree on the termination of the employment. After signing a settlement agreement, an employee is often entitled to receive unemployment benefits, provided the employee meets all the requirements set out in the Unemployment Act.An employee who has been dismissed pursuant to a dismissal permit from UWV may apply to the subdistrict court for reinstatement or compensation.

What is the limitation period imposed on employees to commence a legal action against the employer?

Expiry period

Unlike a limitation period, an expiry period cannot be interrupted.

• For requests to annul the termination of the employment agreement and for reinstatement of the employment agreement, an expiry period of two months after the end of the employment contract applies.
• An employee who has a fixed-term employment agreement of six months or longer must be informed by the employer one month before the expire date of the employment agreement about a possible continuation (the so-called ‘duty of notification’). If the employer failed to inform the employee in time, the employee may claim damages (of up to one month’s salary) within two months after the employment agreement has been terminated.
• A claim for the statutory transition payment expires three months after the employment agreement has been terminated.

Limitation period

• A wage claim is subjected to a limitation period of five years.

When an employee decides to take legal action against the employer, what are the steps to observe and comply with pursuant to the statutory requirements?

If an employee does not reach a settlement with an employer, the employee can initiate legal proceedings before the subdistrict court. Depending on his claim, the lawyer will submit a writ of summons or an application to the court. The employer is given the opportunity to respond to the claim after which usually a court hearing is scheduled. During the court hearing, both parties may explain their arguments in detail and the judge may ask questions. After the hearing, the judge will normally deliver a judgment within a few weeks.

In taking a legal action against the employer, can an employee represent himself?

Yes, an employee may represent himself before the subdistrict court. However, if the employee appeals against a decision of the subdistrict court, the employee must be represented by a lawyer. 

What happens if an employee’s death takes place before the completion of the legal action filed by the employee?

Termination by mutual consent

If the employer and the employee have agreed on a severance payment before the death of the employee, for example in a settlement agreement, the heirs of the deceased employee are, in principle, entitled to payment of that compensation.

Legal proceedings

If the judge has given a judgment terminating the employment agreement and the employee dies before the intended date of termination of the employment agreement, the awarded compensation is due to the employee’s heirs.

If the judge has not yet given a judgment and the employee dies before the judge delivers a judgment, the employment agreement ends by operation of law as a result of the employee’s death. The employer does not owe any compensation. 

Does the aggrieved party have a right to appeal against the decision? If yes, is there a limitation period to file for an appeal?

Yes, a party may appeal within three calendar months after the judgment.

Is there any alternative dispute resolution available? If yes, what are the key differences between the alternative dispute resolution and a suit filed in court?

Most disputes relating to employment law are dealt with by the regular court. However, it is possible to opt for arbitration in the collective bargaining agreement or in the employment agreement. The advantage is that the case will be heard behind closed doors. In addition, arbitration proceedings take often less time. The disadvantage is that arbitration is generally more expensive. Another possibility is to solve an employment conflict through mediation. Key differences are: mediation is cheaper than court proceedings, mediation is often a quicker procedure, there is more room for emotional feelings and recognition during mediation and the outcome of the mediation is generally accepted by both parties. The law also offers the possibility of establishing an independent committee that can issue dismissal permits instead of UWV. The advantage is that it is possible to deviate from the UWV guidelines for selection for redundancy and the reflection principle (the reflection principle requires that job losses must be proportionally distributed among the various age groups).