Dutch employment law basics for foreign employers
Hiring your first employee in the Netherlands? Dutch employment law has several fundamental differences from at-will employment systems.
What surprises foreign employers most about Dutch employment law?
Dutch employment law basics for foreign employers include the absence of at-will employment, the possible applicability of a sector-wide CAO, mandatory day-one transition payments, and the ketenregeling limiting consecutive fixed-term contracts.
Foreign employers hiring in the Netherlands for the first time often encounter a few surprises. There's no 'at-will employment': dismissing an employee requires a valid legal ground and, in most cases, approval from the UWV or a court. Many industries also have a CAO, a collective labor agreement between employer organizations and unions, which can set minimum terms like salary scales and holiday entitlements that override individual contract terms, whether you're aware of it or not.
On top of that, employees are entitled to a transition payment from day one under the Wet arbeidsmarkt in balans, and the 'ketenregeling' limits how many fixed-term contracts you can offer before a permanent contract becomes mandatory. At EenvoudigRecht, we draft Employment Contracts in English that account for all of this, for a fixed price.
Veelgestelde vragen
What's the biggest difference for foreign employers hiring in the Netherlands?
The absence of 'at-will employment' is usually the biggest shift. Dismissing an employee in the Netherlands requires a valid legal ground and, in most cases, approval from the UWV or a court, rather than being at the employer's discretion.
What is a CAO, and does it apply to my business?
A CAO (collectieve arbeidsovereenkomst) is a collective labor agreement negotiated between employer organizations and unions for a specific sector. If your industry has a binding CAO, it can set minimum terms, such as salary scales and holiday entitlements, that override individual contract terms.
Do employees get a transition payment even during a probationary period?
Yes, since the Wet arbeidsmarkt in balans (WAB) took effect in 2020, employees are entitled to a transition payment from their very first day of employment, including during a probationary period, if you end the contract.
How many fixed-term contracts can I offer before a permanent contract is required?
The 'ketenregeling' limits consecutive fixed-term contracts to three, or three years total, whichever comes first, after which the employee is automatically entitled to a permanent contract.
Why do probationary periods and non-compete clauses need specific wording?
Certain clauses, like a probationary period or a non-compete clause, must meet specific written-form requirements to be valid. Get the wording or format wrong, and the clause can be void, even if the employee agreed to it.
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