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The employment relationship
Country specific laws
What laws and regulations govern the employment relationship?
Employment law is set out in many separate statutes. Book 7(10) of the Civil Code is regarded as the main statute, but other acts are equally important, including:
- the Act on Collective Bargaining Agreements;
- the Works Councils Act;
- the General Act on Equal Treatment;
- the Unemployment Act; and
- the Notification of Collective Dismissals Act.
Who do these cover, including categories of worker?
The legislation can potentially cover numerous categories of worker, pursuant to the base rule that an employment agreement is an (oral or written) agreement under which one party (the employee) undertakes to perform work on the instruction of another party for a certain period in exchange for wages. The principle of ‘substance over form’ applies in this regard – for example, an independent contractor can be qualified as an employee if the facts warrant such a qualification.
In addition, there is a legal (rebuttable) presumption that a relationship between parties qualifies as an employment agreement if a person, over a consecutive three-month period, performs work for another person or legal entity for payment of a financial contribution and such work is carried out on a weekly basis or for at least 20 hours over one month. The interested party may state facts in an effort to invalidate this presumption.
There is also a presumption that where an employment agreement has lasted at least three months, the contracted work is assumed to amount to at least the average working hours per month in the three preceding months.
Other contractual relationships and workers other than employees
Distinct from employees within the meaning of Book 7(10) of the Civil Code are other categories such as civil servants, apprentices and temporary workers. Specific rules apply to such workers and their contractual relationships.
Specific rules also apply to foreign workers and managing directors.
On July 1 2015 new protection was introduced for employees working under, for example, a services agreement with their employer. Both parties to the services agreement are jointly liable for the employee’s wages. In case of a chain of service agreements (ie, subcontracting), the employee must file a claim with either the employer or the closest link in the chain before moving to the next party in the chain.
Are there specific rules regarding employee/contractor classification?
Must an employment contract be in writing?
No, although written form is preferred and is common practice.
Given the statutory definition, an employment agreement can be concluded orally or in writing.
A written (express) agreement may take the form of a formally drafted agreement or letter signed by both parties. In either case, and pursuant to EU Directive 91/533/EEC, the employer must inform the employee in writing of (at least) the following:
- the parties’ identities and place of residence;
- work location(s);
- start date;
- a description of the role or job title;
- confirmation of normal working hours per day or week, initial base salary and other wage components, eligibility for or method of calculating holidays and applicable notice period;
- whether the employee will participate in a pension scheme;
- whether a collective bargaining agreement applies; and
- whether the employment agreement has been entered into for a fixed period and if so, the duration thereof.
Are any terms implied into employment contracts?
Yes. Given the statutory definition, an employment agreement can be concluded orally or in writing, so any such agreement and its applicable terms can be implied as well as expressed.
Are mandatory arbitration/dispute resolution agreements enforceable?
Yes, although such arrangements are uncommon, as the law states specifically that parties must always have access to the civil courts, given the existence of specialised tribunals which deal with employment disputes professionally and swiftly.
How can employers make changes to existing employment agreements?
The employer can contractually reserve the right to unilaterally amend the terms and conditions of employment, and invoke this right in circumstances where its own interests outweigh those of the employee. Positive advice from the works council is usually an indication to the court that such circumstances apply. If a unilateral amendment clause has not been included in the employment agreement, it is more difficult for the employer to change the terms and conditions of employment.
According to the Supreme Court, unilateral amendment clauses are primarily aimed at collective changes and if there is no such clause in the employment agreement, the employer must conduct the necessary negotiations with individual employees. In these negotiations employer and employee must conduct themselves diligently. When assessing whether the employees should accept a change, it should be considered whether the employer has sound reasons for the change. If that is the case, it should then be determined whether acceptance of the employer’s reasonable proposal could reasonably be expected from the employee.
In case of collective changes, in the absence of a unilateral amendment clause, an employer will generally need to demonstrate that continuing with the current terms and conditions would be unreasonable, under the standards of reasonableness and fairness, or that there are unforeseen circumstances. These are both strict tests.
Is a distinction drawn between local and foreign workers?
The Act on Cross-border Work ensures that certain essential statutory rights under Dutch employment law apply to employees who work in the Netherlands, but whose employment agreement is subject to foreign law. These rights relate to issues such as health and safety, minimum wage and minimum holiday allowance. Further, there are a number of restrictions on applicable foreign law for employees who work in the Netherlands: a choice for foreign law cannot result in the loss of mandatory rights under Dutch law and a choice of law cannot set aside mandatory provisions of Dutch law.
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