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The employment relationship

Country specific laws

What laws and regulations govern the employment relationship?

Employment contracts are mainly governed by Book 7 of the Civil Code while the EU Rome I Regulation applies to international employment contracts with Dutch elements. Other important Dutch acts that apply include the Collective Labour Agreement Act, the Notification of Collective Redundancy Act, the Works Councils Act, the Working Conditions Act and the Unemployment Act. 

Who do these cover, including categories of worker?

The acts cover regular employees, but also temporary workers and managing directors. 

Misclassification

Are there specific rules regarding employee/contractor classification?

 The employment contract has been defined in Section 7:610 of the Civil Code and the services contract has been defined in Section 7:400 of the Civil Code.

The essential elements for establishing an employer/employee relationship are that the employer provides the employee with remuneration in exchange for the latter personally performing work activities, subordinated to the authority of the employer. Where this occurs for the same employer every week for three months or for at least 20 hours a month, an employment contract is deemed to exist, whether or not such a contract has expressly been concluded; in the event of any dispute, it is up to the employer to prove that there is no employment contract.

A services contract is defined as an agreement whereby one party, as an independent contractor (either directly or through a company owned by him or her), agrees to perform specific services for the principal. There is no master and servant relationship between the independent contractor and its principal and there is no obligation for the independent contractor to perform his or her services personally. 

Contracts

Must an employment contract be in writing?

No, an employment contract may be concluded either verbally or in writing. However, the employer must inform the employee in writing of the conditions applicable to his or her employment.

Are any terms implied into employment contracts?

The employer must inform the employee in writing of at least the following conditions that apply to the employee within one month of the start of employment:  

  • the parties’ identities and places of residence;
  • the place of work;
  • the function of the employee or the nature of his or her work;
  • the length of the employee’s normal working day or week;
  • the initial base salary and any other pay components, holidays and applicable notice periods;
  • the pension arrangement in place, if applicable;
  • the starting date of the employment;
  • the duration of the contract (if fixed term);
  • the daily or weekly working hours;
  • the duration of any probationary period;
  • the amount of paid annual leave or how leave entitlement is calculated; and
  • any collective agreement applicable to the employment.

Are mandatory arbitration/dispute resolution agreements enforceable?

Yes, subject to specific requirements; however, these are not commonly included in employment contracts.

How can employers make changes to existing employment agreements?

The terms and conditions of the employment agreement can be changed with the employee’s consent or by including a unilateral change clause in the employment agreement. The employer is entitled to enforce this clause if serious circumstances arise from not changing the terms and conditions which prevail over the interests of the employee. Without such a clause in place, changing the terms will be more difficult and will require the employee’s prior consent. However, when contemplating a change to the employee’s terms, the employer could refer to ‘the principles of acting as a good employee’ and require the employee’s acceptance of the employer’s reasonable proposal (relating to the changed terms), unless this could reasonably not be expected of the employee. This is quite a strict test. 

Foreign workers

Is a distinction drawn between local and foreign workers?

According to the EU Posted Workers Directive and the Dutch Terms of Employment Act, employees that are temporarily assigned to the Netherlands are entitled to a minimum level of Dutch protection, including with regards to minimum wage, safety and health and maximum working time. If the Netherlands qualifies as the country where the foreign worker is deemed to normally carry out is work, the mandatory rules under Dutch employment law apply, including any applicable industry-wide collective labour agreement and participation in an industry-wide pension plan.

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