employment law overview netherlands€¦ · employment law overview an alliance of employers’ counsel worldwide 2021-2022 / netherlands 3. limitations on bacKground checKs During

| 1 employment law overview

2021-2022 / netherlandswww.leglobal.org

employment law overview netherlands 2021-2022Palthe Oberman / Proud Member of L&E GLOBAL

an alliance of employers’ counsel worldwide

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2021-2022 / netherlands

table of contents.

i. General overview 03ii. HirinG praCtiCeS 04iii. employment ContraCtS 06iv. workinG ConditionS 08V. Anti-DiscriminAtion LAws 10vi. pay eQUity lawS 12vii. SoCial media and data privaCy 13 viii. termination of employment ContraCtS 14iX. reStriCtive CovenantS 19X. tranSfer of UndertakinGS 21Xi. trade UnionS and employerS aSSoCiationS 23Xii. employee BenefitS 27




i. general overview

2. Key Points•Employmentlawisnotconsolidatedintoasinglecode.

•Employeeshaveastronglegalposition.•Preventivedismissalassessment.•Relatively longperiodof salarypaymentduringillness.

•NewDutch employment law as from1 January2020:theBalancedLabourMarketAct.

3. legal frameworKDutchemployment law isnotconsolidated intoasingle code. The employment relationship underDutchlawisgovernedbythecompulsorystatutoryregulations laid down in (for example) the DutchCivil Code. The relationship can furthermore begovernedby (amongother things) the conditionslaid down in a Collective Labour Agreement (ifapplicable), internal regulations (if applicable)and the individual employment contract. Judicialprecedent is an important part of the legalframeworkbecausemanyemploymentmattersareinfluencedbycaselaw.

4. new develoPments ThemostrecentdevelopmentinDutchemploymentlaw is the introduction of the WAB, as from 1January2020.TheBalancedLabourMarketAct isthe latest addition to theWork and Security Act(introducedin2015).

Extra birth leave has been introduced as of 1January2019.Partnerswillnowhavefivedaysofbirthleaveatfullpayafterthebirthoftheirchild(basedonfull-timeemployment).Partnerscantakethisleaveimmediatelyafterthebirthoftheirchild,buttheycanalsospreaditoverthefirstfourweeksafterthebirth.

Asof1July2020,partnerscantakeadditionalbirthleave for up to 5 weeks. First, the partner musttake the5daysofbirth leave (basedon full-timeemployment). During this leave, the employee isentitled to70%ofhisorher salary (increaseduptothemaximumdailywages).Theadditionalbirthleavemustbetakenwithin6monthsofthechild’sbirth(onorafter1July2020).

Anotherdevelopmentisthatthestatepensionagewillbe increased.Asof1 January2019, thestatepension entitlement age has been increased to66yearsand fourmonths. The statepensionagewillremain66yearsandfourmonthsin2020and2021. In2022,thestatepensionagewill increasebythreemonthsandwillbe67years in2024.Asfrom2025,thestatepensionagewillbelinkedtolifeexpectancy.

Thecalculationofthetransitionpaymenthasalsochangedasof1January2020.UndertheWAB,theentitlementtoatransitionpaymentisestablishedimmediatelyuponcommencementofemployment,rather than after 24 months of employment.The maximum transition payment is EUR 83.000gross or a maximum of one annual gross salary,if it exceeds EUR83.000. See sectionVIII. part 3.for further changes to the transition payment asintroducedintheBalancedLabourMarketAct.

1. introductionDutchemployment law iselaborateandrelativelycomplex. It isdivided into individualandcollective lawandiscloselyrelatedtosocialsecuritylaw.ThefollowingtextwillreportthelatestdevelopmentsinDutchemploymentlaw.




ii. hiring Practices 1. requirement for foreign emPloyees to worK

a. employment permit

If an employerwants to hire a foreign employeein a legal manner, several requirements have tobemet.Firstofall,theforeignemployeehastobeinthepossessionofaresidencepermit.Secondly,theemployerisobligedtoobtainanemploymentpermit. Employees with Dutch nationality andemployees from one of the countries of theEuropean Economic Area and Switzerland areexemptfromtheserules.

B. tHe employment relationSHip

WhenanemployeeworksintheNetherlands,Dutchlawdoesnotnecessarily govern theemploymentrelationship. A foreign employee could remain inthe employment of his foreign employer on thebasis of his foreign employment contract with achoiceof law in favourof the lawsof the foreigncountry and then (for example) be seconded tothe Netherlands. In other words, the employeris not obliged to offer employees from anothercountryaDutchemploymentcontractwhen theyare transferred to the Netherlands. Employeescancontinuetoworkonthebasisoftheircurrent(foreign)employmentcontract.

TheNetherlandsisapartytothe(EU)ConventionontheLawapplicabletoContractualObligations/Rome I Regulation. This Convention/Regulation isapplicabletointernationalemploymentlawissues.Itstatesthatregardlessofthegoverninglawoftheemploymentcontract,thepartiesareentitledtotheprotectionaffordedbythecompulsoryregulationsthat would apply if no applicable law had beenchosen.Themoreanemployeeislegallyorsocio-economically integrated in the Netherlands, the

sooner a Court will decide that the employmentcontractislinkedtotheNetherlands,asaresultofwhichDutchlawwouldbeapplicable.ThePostingofWorkersDirective(inDutch:Detacheringsrichtlijn)andtheTermsofEmployment(Cross-borderWork)Actmustalsobetakenintoaccount.

Incaseofaninternationalemploymentrelationship,theDutchtaxauthoritiesgrantspecialtaxbenefitstoforeignemployeeswhoaretemporarilyassignedto a Dutch subsidiary or branch from abroad,e.g. employees who reside in the Netherlandsor employees who are recruited by a Dutchemployer.Undertheso-called30%Ruling,30%oftheemployee’ssalarymaybepaidoutastax-freecompensationforcosts. Ingeneral,anaddendumshould be added to the employment contractdeclaring the applicability of the 30% Ruling inrespectoftheagreedwages.Themainconditionsrelatedtothe30%Rulingpertainto:

•iftheemployeehasaspecificexpertise,whichis(almost)notavailableintheNetherlands;

•the employee has obtained a valid individualdecisionoftheTaxandCustomsAdministration;

•inaperiodof24monthsbeforetheemploymentin the Netherlands commenced, the employeemusthave livedmorethan150kminastraightlinefromtheDutchborder.

2. does a foreign emPloyer need to establish or worK through a local entity to hire an emPloyee?Foreign employers can hire employees in theNetherlandseitherthroughalocalentityoraforeignentity. Before deciding on how to structure theirbusinessintheNetherlands,foreignemployersareadvisedtoconsiderthetaxconsequences.



2021-2022 / netherlandsan alliance of employers’ counsel worldwide

3. limitations on bacKground checKs During the pre-employment phase, only personaldataspecificallyrequiredforthepositionthattheapplicant applied for, can be screened. Standardscreeningproceduresarenormallynotallowed inthe Netherlands. In the pre-employment phaseno extraordinary personal data of the candidatesmaybescreened.Thisisonlyallowedifthereareexceptional requirements for the vacancy thatmakethistypeofscreeningnecessary.

4. restrictions on aPPlication/interview questionsThe employer can only ask about an applicant’shealthsituationifamedicalexaminationisrequiredfor the job by law. Of course, it is prohibited todiscriminateagainst applicantson thegroundsof– among others – gender, race, age, civil status,religion, and so on. On 25 May 2018, the newEU Regulation on privacy entered into effect. Allcompanies were given two years to comply withthe new rules laid down in the regulation. If theemployerfailstodoso,finesuptoEUR820.000or10%oftheyearlyturnovercanbegiven.

The Recruitment Code of the Dutch Associationfor Personnel Management and OrganisationalDevelopment (in Dutch: NederlandseVereniging voor Personeelsmanagement &Organisatieontwikkeling, abbreviated to: NVP)containsbasicrulesthatemployersshouldobserveduringtherecruitmentandselectionprocess.Thepurpose of this code is to provide a standard fora transparent and fair recruitment and selectionprocedure.ThisCodeisnotbinding,butemployeescanderiveprotection fromthese rules.TheCodeforexampleprohibitstherequirementofaphotooftheapplicantpriortotheapplicantbeinginvitedtoaninterview.



iii. emPloyment contracts1. minimum requirementsAn employment contract under Dutch law maybe concluded orally or in writing. Pursuant toArticle 7:655 of the Dutch Civil Code, however,theemployerwillnonethelessneedtoinformtheemployee inwritingwithrespecttothefollowing(amongothers)termsandconditions:

•thenameandresidenceoftheparties;•theplacewheretheworkistobecarriedout;•thepositionandajobdescription;•thehiringdate;•iftheemploymentcontractisforafixedperiodoftime,thetimeperiod;

•thevacationrightsorthemethodofcalculatingvacationrights;

•thedurationofthenoticeperiodstobeobservedbythepartiesorthemethodofcalculatingtheseperiods;

•thesalaryandthepayment intervalsand, iftheremuneration depends on the results of theworktobeperformed,theamountofworktobeperformedperdayorperweek,thepriceperitemandthetimethatwillbeinvolvedinperformingthework;

•thecustomarynumberofworkinghoursperdayorperweek;

•theemployee’spensionrights(ifapplicable);•theCollectiveLabourAgreement(ifapplicable).

2. Fixed-term/Open-ended contractsAnemploymentcontractcanbeagreeduponforafixedperiodoftime(fixed-termcontract)orforanunspecifiedperiodoftime(open-ended/permanentcontract).Iftheidentityoftheemploymenthasnotchanged(forexample,withrespecttotheworkto

beperformed, salary and secondaryemploymentconditions), a fixed-term employment contractthatfollowsanopen-endedemploymentcontract(thathasnot terminated inawayasprovidedbyArticle7:677paragraph4oftheDutchCivilCode)willbecomeanopen-endedemploymentcontractbyoperationoflaw.

PursuanttoArticle7:668aoftheDutchCivilCode,afixed-termemploymentcontractwillautomaticallyconvertintoanopen-endedemploymentcontractif:

•a chain of temporary employment contractscovers36monthsormore;

•achainofthreefixed-termemploymentcontractsiscontinued.

A chain is a series of fixed-term employmentcontractsthatsucceedeachotherwithnomorethansixmonthsinbetween.Thisruleisalsoapplicableto employment contracts between an employeeand various employers that must reasonably bedeemedtobeeachother’ssuccessorswithregardtotheworkperformed.

Since1January2020,it ispossibletoshortentheintervalperiodofsixmonthstothreemonthsinaCollectiveLabourAgreement, if thenatureof theactivity so requires. This applies, for example, toseasonallabour.

a. notifiCation oBliGation

Onemonthbeforetheterminationofafixed-termemployment contract of sixmonthsor longer, anemployermust notify the employeewhether theemployment contractwill be extended or not (inDutch: aanzegverplichting). If so, the employermust also inform the employee about the termsand conditions for extension. If the employerdoesnot informtheemployee,theemployeehas




a right toclaimsalaryduring theperiod inwhichtheemployer is inviolation(uptoamaximumofone monthly salary). For fixed-term employmentcontracts shorter than six months or contractswithnofixedenddate, such as for the lengthofaspecificproject,thisnotificationisnotrequired.

3. trial PeriodAprobationaryperiodmustbelaiddowninwriting.Incaseofanopen-endedemploymentcontract,anemployment contract for an indefinite period oftimeoranemploymentcontractfixedforaperiodoftwoormoreyears,themaximumprobationaryperiod is two months. In employment contractsfor afixed-termofmore than6months, but lessthantwoyears,themaximumprobationaryperiodis onemonth. It is not possible to agree upon aprobationary period in an employment contractthathasatermofsixmonthsorless.

The probationary period for both the employerandtheemployeeshouldbeequal.Aprobationaryperiod is not valid if the employee involved isalreadyemployedattheemployer,butatadifferentpositionandwillbecarryingoutmoreor lessthesameworkthathe/shehasdoneelsewherewithinthe company. A probationary period conflictingwiththelawisnullandvoid.

4. notice PeriodDutch law provides for the following statutorynoticeperiodsforanemployer:

•fewerthan5yearsofservice:1month•more than 5 years, but fewer than 10 years ofservice:2months

•10ormore yearsof service,but fewer than15yearsofservice:3months

•15ormoreyearsofservice:4months

The employee must take into account a noticeperiodofonemonth.A longernoticeperiodmaybeagreeduponifitislaiddowninwriting.Inthatcase,thenoticeperiodtheemployerhastoobservemustbetwicethenoticeperiodtheemployeehastoobserve.

ThenoticeperiodmaybereducedunderaCollectiveLabourAgreement.Pleasenote thatanyvariance

should be within statutory limitations, in defaultofwhichthestatutorynoticeperiodisapplicable.Unlessagreedotherwise, thenoticeperiodstartsrunning at the beginning of themonth followingthemonthinwhichnoticeisgiven.

Incasetheemployeehasreachedtheretirementageduringhisorheremployment, theapplicablenoticeperiodfortheemployerisonemonth.



iv. worKing conditions 1. minimum worKing conditionsThe Working Conditions Act (in Dutch:Arbeidsomstandighedenwet) contains the mostgeneral provisions and requirements regardingworkingconditionsandstipulatesthatanemployerandemployeearejointlyliableinsupportinghealth,safetyandwellnessintheworkplace.Theemployerhastosetupaworkingconditionspolicywithinthecompany.Theemployermust,amongotherthings,prevent sicknessandanydanger to thehealthofemployeesandmakeaneffort to reintegrate sickemployeesintheworkingprocess.Theemployerisrequiredtousetheservicesofaworking-conditionsservice,aninstitutionthatassiststheemployerintheoverviewandevaluationoftherisks,assistssickemployees,advisestheemployeronreintegrationofsickemployees,andmore.

2. salaryIn principle, employer and employee are free toagree to the wages to which an employee shallbeentitled.However,theActonMinimumWagesand Minimum Holiday Allowances (in Dutch:Wet minimumloon en minimumvakantiebijslag)contains certain minimum wages and minimumholiday allowances, which are normally adjustedeach year. A collective labour agreement, ifapplicable,mayalsocontainsalaryscalesthatarebindingonindividualemployees.

3. maximum worKing weeKThe legislation on working hours and workingconditions isbasedon theWorkingHoursAct (inDutch:Arbeidstijdenwet). Theamountofworkinghoursdependsuponthesectorofindustryandthekindoflabourperformed.Ingeneral,anemployeeisonlyallowedtoworkamaximumof12hoursperday,foramaximumof60hoursperweek.Overaperiodof4weeksthemaximumnumberofworkinghoursis55perweek.Overaperiodof16weeksthemaximumnumberofworkinghoursis48hoursperweek.Thearrangementsonworkinghoursincludedin an individual employment contract, which arenot in conformity with the Working Hours Act,canbedeclarednullandvoid.TheWorkingHoursDecree (in Dutch: Arbeidstijdenbesluit) providesexceptions and additional measures for certainindustries(interaliathecaresector).

4. overtimeThere is no specific Dutch legislation oncompensation for working overtime. Whetherovertime will have to be compensated shouldfollowfromwhatwasagreedtointheemploymentcontract,supplementedbytheemployeehandbookorestablishedinaCollectiveLabourAgreement(ifapplicable).Evensupposing that theseprescribedsources are altogether silent with regards tocompensating employees for overtime servicesrendered, it is still possible that the employer isobliged to do so. Especially considering the highprobability that in a labour dispute, the Courtsare likely to decide that the employer shouldcompensate an employee for working overtime,becausethisiswhatmaybeexpectedfroma“goodemployer”inthesamecircumstances.




5. health and safety in the worKPlace

a. employer’S oBliGation to provide a HealtHy and Safe workplaCe

Following the Working Conditions Act, theemployer isobligedtoprovideahealthyandsafeworkenvironment for its employees. The specificrules for employer and employee to ensure ahealthyandsafeworkplaceare further laiddownin the Working Conditions Decree (in Dutch:Arbeidsomstandighedenbesluit).

Employers are obliged to make a Risk InventoryandEvaluation,whichmentionsalltherisksintheworkingenvironment,andthepreventivemeasuresthataretaken,orwillbetaken,tominimisethoserisks. Employers are also obliged to enter into aservice agreement with a certified occupationalhealthandsafetyserviceagency.

B. Complaint proCedUreS

In principle, employees should first discuss anycomplaints with their employer. Employers areadvised to have a proper complaint procedure inplace. In case the company has a works council,employees may also report health and safetyrelatedmatters to theworks council. In addition,employees have the right to address healthand safety related matters with the company’soccupational health and safety service agency.Employers have the obligation to inform theiremployees about that possibility. In the lastinstance, employees may report violations ofhealthandsafetyregulationswiththeSocialAffairsandEmploymentInspectorate.




V. Anti-diSCriminAtiOn laws1. brief descriPtion of Anti-diSCriminAtiOn laws According to Dutch legislation, discrimination onanygroundwhatsoeverisprohibited.

In the Dutch Equal Treatment Act (in Dutch:Algemenewetgelijkebehandeling),discriminationon the following grounds is explicitly prohibited:religion, personal beliefs, political opinion, race,sex,nationality,hetero-orhomosexualorientationandcivilstatus.

In addition, in specific employment laws,discriminationonthefollowinggroundsisexplicitlyprohibited:age,sex,handicapandchronicdisease,temporary/permanentemploymentcontractsandworkinghours(part-time/full-time).

2. extent of Protection In principle, discrimination directly based on thegrounds mentioned above is never permitted,exceptforcertainsituationsinwhichdiscriminationisexplicitlyallowedbylaw.

The discrimination laws also cover indirectdiscrimination.Indirectdiscriminationoccurswhenaneutralbehaviour(e.g.apolicyorpractice)resultsin discrimination based on one of the groundsmentionedabove.

Indirectdiscrimination–anddirectdiscriminationwith respect to age, temporary/permanentemployment contracts and working hours – canbe justified if objectively necessary to achieve alegitimateaimandproportionatetotheaimsought.

Agreements between employers and employeescontrary to discrimination laws can be void orvoidable.Theemployeecanalsoholdtheemployerliable for damages resulting from discriminatingbehaviouroftheemployer.

3. Protections against harassmentTheDutchEqualTreatmentActprohibitsharassmentand sexual harassment. The Working ConditionsActcontainsanobligationforemployerstopreventharassmentfromoccurringattheworkplace.Iftheemployer fails to do so, administrative fines canbegiven,andtheemployercanbeheld liablefordamages resulting from discriminating behaviouroftheemployer.

4. emPloyer’s obligation to Provide reasonable accommodations The Dutch government encourages companiesto hire disabled persons. As an incentive thegovernment may grant financial benefits. Anemployerisresponsibleforalltheemployees.Ifanemployeeisdisabled,his/herworkplaceshouldstillbesafeandaccessible.Theemployerisresponsiblefor this. If the workplace needs to be adapted,theemployercanasktheWorkPlacementBranchof the Employee Insurance Agency for financialcompensationtoestablishthis.




Allemployeesshouldbeabletofulfiltheirreligiousduties. The employer cannot interfere with this,untilacertainpoint.Forexample,theemployerisnotobligated tosetupaprayer roomforhis/heremployees. There are no specific laws about thissubjectintheNetherlands.

5. remediesIn employment relationships in the Netherlands,discrimination claims are not that prominent.In practice, the employer and employee as wellas Dutch Courts tend to search for reasonable,pragmaticandpracticalsolutions.

AnemployeecanasktheNetherlandsInstituteforHumanRights (inDutch:CollegevoordeRechtenvandeMens)foranopinionaboutdiscrimination.TheInstitutecangivea(non-binding)opinionandadvice,buttheInstitutewillnotawardafinancialcompensation.Anemployee isnotobliged toaskanopinionof the Institutebeforegoing toCourt.TheCourt is not obliged to follow theopinionofthe Institute,but theopinionof the Institute canplayanimportantrolebecauseoftheexpertiseoftheInstitute.



vi. Pay equity laws 1. extent of Protection Presently, offeringunequal pay forworkof equalvalue is a violation of (i) articles 7:646, 7:648and 7:649 of the Dutch Civil Code, (ii) the EqualTreatmentforMenandWomenAct(inDutch:“Wetgelijkebehandelingvanmannenenvrouwen”)and(iii) the General Equal Treatment Act (in Dutch:“Algemenewetgelijkebehandeling”).

A legislative proposal on equal pay for womenand men (in Dutch: “Wet gelijke beloning vanmannen en vrouwen”) is pending in the Houseof Representatives. According to the explanatorymemorandum, there is still a significant pay gapin the Netherlands. The Act is intended as anadditional measure to be incorporated into theDutchEqualTreatmentAct.

2. remedies Under existing legislation, the presumption ofevidence to demonstrate unequal pay rests withtheemployee. It isuptothe individualemployeetodemonstratewhetherhe/shemayunjustifiablyearn less than a colleague performing the samework.However,itcanbedifficultfortheemployeeto acquire the relevant facts and figures. If theemployer refuses to provide actionable data orimpedes efforts to adjust salaries to achieve payequity,theemployeecaninitiateaprocedurewiththeCourts.

Should the abovementionedAct enter into force,theburdenofproofwill shift from theemployeetotheemployer.Thiswillbestructuredaccordingto a certification system. Large companies (withmorethan50employees)mustobtainacertificateshowing that they pay women and men equally,meaning that women and men in the samepositionandwiththesameworkinghours,receiveequal pay. The certificationwill be grantedby anindependentbody.

Lastly, individuals who suspect that they are notbeing paid an equal wage can file a complaintwith theNetherlands Institute for Human Rights.BeforeanemployeecansubmitacomplainttotheInstitute,he/shemustfirstapproachtheemployerwith the complaint. The employer then has twomonthstoactonthecomplaint. Incaseswhereinthe employeeworks for a company that has notinstalledaprocedureforcomplaints,theemployeecan immediately approach the NetherlandsInstituteforHumanRights.

3. enforcement/litigation Theemployeecansubmitadiscriminationcomplaintto theNetherlands Institute for Human Rights. Itis also possible to request an official opinion onthe complaint from the Institute. In that case, aprocedure for such complaints will be launched.This is only possible in discrimination cases. TheNetherlands Institute for Human Rights assesseswhether the discrimination complaint is justifiedonthebasisofthelegislationonequaltreatment.Bear inmindhowever, that the judgmentsof theInstitutearenotlegallybinding.

4. other requirementsInadditiontothecertification,theemployermustprovide information in the annual report on theextent of the differences in pay between femaleand male employees. This will only apply if theActonequalpay forwomenandmen is formallyadopted. Per the proposed Act, the Minister ofSocial Affairs and Employment is given the legaltask to inform the Dutch parliament, every twoyears,astothedevelopmentsconcerningthepaygapintheNetherlands,whattheexpectationsareandwhichpoliciesarebeingdevelopedinthisareatoreducethepaygap.




vii. social media and data Privacy 1. restrictions in the worKPlace

a. Can tHe employer monitor, aCCeSS, review tHe employee’S eleCtroniC CommUniCationS?

Theemployercanrestricttheuseof Internetandsocialmediaduringworkinghoursbyaguideline/code of conduct that states the rules about thisusage. The employermust inform the employeesabout the email and Internet-policy within thecompany. The employer is allowed to checkwhether these rules are being followed, but thesurveillanceofprivateuseofInternetduringworkcannot conflictwith the employee’s fundamentalrightofprivacy.

If theemployer checks thisbyusing investigationequipment, the employees must be informedbeforehand about this. If the employer notices aviolation, the employeemust be informed aboutthisaswell.EspeciallywiththenewEURegulationonprivacythatenteredintoeffecton25May2018,employersmustdecideineachsituationwhatlevelofprivacyisrequired.

2. emPloyee’s use of social media to disParage the emPloyer or divulge confidential informationIn the Dutch Civil Code, it is laid down that anemployeemayneverinsulthis/heremployer.Also,theemployeeisnotallowedtodiscloseconfidentialinformation about the company. In Dutchemployment law, a severe insult of theemployeror his/her family members, as well as divulgingconfidential information about the companymayresultinanurgentreasonfordismissal.




viii. termination of emPloyment contracts 1. grounds for termination A fixed-term employment contract or a contractfor a specific project ends by operation of lawuponexpirationof thetermorcompletionof theproject, without notice being required. However,as from 1 July 2015 an employer is obliged tonotify the employee at least one month beforetheendingofafixed-termcontractofsixmonthsor longer whether the employment contract willbeextendedand,ifso,subjecttowhattermsandconditions.Furthermore,pursuanttoArticle7:657oftheDutchCivilCode,theemployerisobligedtoinformanemployeewhohasafixed-termcontractaboutvacancieswithanopen-endedemploymentcontract.

An open-ended employment contract can beterminatedinthefollowingways:

•the employer gives notice after receivingpermissionfromagovernmentalorganisation;

•the employee consents after the employer hasgiven notice, without the abovementionedpermission;

•courtproceedings;•mutualconsent;•dismissalbecauseofanurgentreason;•noticegivenbytheemployee.

a. employer GiveS notiCe to terminate

Incaseofdismissaloneconomicgroundsorbecauseof long-term incapacityofwork,anemployercanterminateanemploymentcontractbygivingnoticeafter the Employee Insurance Agency (in Dutch:UWV)hasgivenpermissiontodosobyadismissalpermit.TheEmployeeInsuranceAgencywillgrant

permissiononlyifthereisareasonablegroundfordismissal and redeployment within a reasonableperiodoftimeis(evenaftertraining)notpossibleor reasonable. The Employee Insurance Agencyproceduretakesapproximatelyfourweeksassoonasithasreceivedallthenecessaryinformation.

Afterpermissionhasbeengranted,noticeistobegiven with due observance of the notice period.Due to thetime involved inobtainingpermissionfromtheEmployeeInsuranceAgency,theemployercandeductthedurationoftheprocedurefromthenoticeperiod(providedthatatleastonemonthofnoticeremains).

Notice must be given with effect from the endof the calendar month, unless another day hasbeen designated by written agreement, internalregulations, a Collective Labour Agreement or bycustom.PleaseseesectionIII.part4.aboveforthenoticeperiodthathastobeobserved.

Permission will not be granted in case – amongothers – termination is impossible because ofa statutory prohibition against terminating anemploymentcontractbygivingnotice,forinstance,during illness shorter than104weeks (unless theillnessstartsaftertherequestforpermissiontogivenotice was received by the Employee InsuranceAgency),pregnancy, if theemployee isamemberorthesecretaryoftheworkscouncil.

Since2015,thereisapossibilityofappealagainstadecisionoftheEmployeeInsuranceAgency.

B. termination witH tHe ConSent of tHe worker

In case an employer has given notice withoutpermission of the Employee Insurance Agency,anemployeecangivehis/herconsentconcerningthe termination of the contract. However, there




is a reflection period of 14 days, during whichthe employee can withdraw his/her consent.The employer has to point out the reflectionperiod within two days after the employee hasgivenhis/her consent. If theemployer fails todoso, the reflection period will be extended to 21days. In principle, the employee does not waivehis/her right to receive the benefits on the basisof the Unemployment Insurance Act (in Dutch:Werkloosheidswet)whenhe/shegives consent, ifhe/shemeetstheconditionsofthatAct.

C. termination By deCiSion of tHe CoUrt

TheCourtcanterminateanemploymentcontractincaseareasonablegroundfordismissalexistsandredeploymentwithina reasonableperiodoftimeis(evenaftertraining)notpossibleorreasonable.An employment contract can be terminatedby decision of the Court, by filing a petition fordissolutionincaseof:

•frequentanddisruptiveabsenceduetoillness;•unsuitability for theposition/underperformance(otherthanbecauseofillness);

•culpableactsoromissionsoftheemployee;•refusal to work due to a serious conscientiousobjection;

•impairedworkingrelationshipasaresultofwhichtheemployercannotreasonablybe requ i redtocontinuetheworkingrelationship;

•dismissalbasedoncumulationground;•other reasons and/or circumstances (byway ofanexception).

Anewgroundfordismissal,calledthecumulationground, was introduced as part of the BalancedLabourMarketAct(inDutch:WAB).Thecumulationground allows an employer to combine differentgrounds for dismissal, whereas these othergrounds are, by themselves, insufficient to justifya dismissal. The cumulation ground can only beappliedforthedismissalmotivesmentionedaboveand cannot be employed for dismissals on thegroundsof(i)businesseconomicsor(ii)duetolong-termincapacityforwork.Incaseanemploymentisterminatedonthebasisofacumulateddismissal,the Court can grant an extra severance, equal toamaximum of half of the transition payment, inaddition to the statutory transition payment thattheemployeeisordinarilyentitledtoreceive.

AfterfilingthepetitionwiththecompetentCourt,the employee is offered the possibility to file astatementofdefence.TheCourtwillthensetadateforahearing,duringwhichthepartiescanexplaintheiropinions.TheCourt couldgrant the requestfor termination and dissolve the employmentcontract, or it could deny the request. The Courtmust take into account the notice period in thecasewhere the contract isdissolved. Since1 July2015, there is a possibility to appeal against theCourt’sjudgment.

d. termination By mUtUal ConSent

An employment contract can be terminatedby mutual consent. No notice period needs tobe observed (although it is usual to do so) andthe employer and the employee can agree on areasonableseverancepackage.Anemployeeis(inprinciple) entitled to unemployment benefits incasehe/sheacceptedtheproposaloftheemployertoterminatetheemploymentcontract.

If the parties agree on termination by mutualconsent, the employerwouldof coursenot needtosubstantiateitsreasonsforterminationtoeitherthe Court or the Employee Insurance Agency.However,theemployerwouldstillneedtoconvincetheemployee toagree. If theemployerdoesnothavesufficientreasons,theemployeemaynotbewillingtoacceptaterminationbymutualconsentatalloronlyiftheemployerpaysafairamountofseverance.

Theemployeehas a reflectionperiodof 14days,during which the employee can terminate thetermination agreement in writing. If no writtenreflection period is inserted in the terminationagreement,thereflectionperiodwillbeextendedto21days.

e. immediate diSmiSSal for UrGent CaUSe

Pursuant toArticle7:678of theDutchCivilCode,theemployermaysummarilydismissanemployeeif the employee has engaged in suchmisconductthattheemployercannotreasonablybeexpectedto continue the employment relationship anylonger. An urgent reason must exist, in which



case theemploymentcontractwillbe terminatedwith immediate effect. The urgent reason mustbecommunicatedtotheotherparty immediatelyandtheemploymentcontractmustbeterminatedwithoutnotice.

f. employee eleCtS to reSiGn

Anemployeeisalwayspermittedtoterminatetheemploymentcontractwithdueobservanceoftheapplicablenoticeperiod.

2. collective dismissalsIfanemployerwants todismiss20employeesormore within a term of three months within oneof the working areas of the Employee InsuranceAgency, itmust,accordingtotheDutchCollectiveRedundancy (Notification) Act (in Dutch: WetMeldingCollectiefOntslag),notifyandconsulttherelevant trade unions and notify the EmployeeInsuranceAgencyofitsintentiontodoso.Itisalsonecessary to take into account all employmentscontracts that will be terminated by mutualconsent. If the employer fails to comply with itsobligationunderthisAct,theemployeehasarightto nullify the termination of his/her employmentcontract.

3. individual dismissals

a. iS SeveranCe pay reQUired?

A statutory transition payment (in Dutch:transitievergoeding) was introduced, effective 1July2015.

From1January2020,employeesareentitledtoatransitionpayment(inDutch:transitievergoeding)fromthefirstdayofemployment,aswellasduringprobationary periods. An employeewill receive athirdofthemonthlysalarypercalendaryear.ThetransitionpaymentiscappedatEUR83.000gross-or iftheemployeeisentitledtoahigherannualsalary - then one annual salary. The transitionpaymentisnotdueiftheemployeeterminatestheemploymentcontract,unlessthisterminationisaresultofseriouslyculpableactionsonbehalfoftheemployer.

As of 1 April 2020, a new compensation schemeentered into force. Employers can apply forcompensation for the transition payment, if theydismissanemployeeonthegroundsoflong-termoccupationaldisability(aftertwoyearsofsickness).

Moreover,asof1January2021, intheeventofaclosureofabusinessbytheemployerforreasonsof illness or pension, the employer will now becompensated. Employers must satisfy a numberof narrowly circumscribed conditions in order toqualify for compensation. It is important to notethatthisoptionisonlyavailabletosmall-businessemployers(withlessthan25employees)whoowea transition payment incurred during a period ofsixmonths prior to the consent of the EmployeeInsuranceAgencyorterminationofanemploymentcontract.

For calculating the duration of an employmentcontract, one or more employment contractsbetweenthesameparties(orsuccessors)thathavefollowedeachotherwithintervalslastingnolongerthansixmonths,willbecountedtogether.

B. eXCeptionS to entitlement of tHe tranSition payment

There are a number of exceptions regarding thetransition payment, themost important ofwhicharesetoutbelow.

Thestatutorytransitionpaymentwillnotbedueiftheemployeeisyoungerthan18andtheaverageworkinghoursdidnotexceed12hoursperweek.Thetransitionpaymentwillalsonotbepayable ifthe employment contract ends as a result of theemployeereachingthepensionableage,oranotherageatwhichtheemployeeisentitledtoapension.Furthermore, the transition payment will not bepaidiftheemploymentisterminatedorotherwiseceasestocontinueasaresultofagraveculpableactoromission,onthepartoftheemployee(e.g.,a legally valid summary dismissal). In the lattercase, the Dutch Cantonal Court may also grantthetransitionpayment, inwholeor inpart, iftheabsenceofanypayment,regardlessoftheamount,wouldbedeemedunacceptableinaccordancewiththecriteriaofreasonablenessandfairness.



C. fair diSmiSSal payment

In addition to the statutory transitional payment,theCourtmayalsoawardafairdismissalpaymentin case of seriously culpable acts and omissionson the part of the employer. This only applies toexceptionalsituations.

d. additional deCiSionS and reGUlationS

In 2015, supplementary orders and decreesbecame effective. The ‘Decision on conditionsfor deducting costs from transition payments’stipulatesforexample,theconditionsunderwhichitispermissibleforanemployertodeductcoststhatweremadeforthebenefitoftheemployee,duringthe employment, from the transition payment.A distinction is made between transition costs(such as costs for retraining and outplacement)and employability costs (costs that increase anemployee’s employability outside the employer’scompany).

4. seParation agreements

a. iS a Separation aGreement reQUired or ConSidered BeSt praCtiCe?

InDutchemployment law,separationagreementsare used when the employment contract will beterminated with mutual consent (the so-calledsettlementagreement). Inanagreementas such,theemployerandemployeearrangeunderwhichconditions they may terminate the contract. Asettlement agreement is not a legal requirementbut is considered best practice (as an employeeis also able to apply for unemployment benefitsafter concluding a (legally correct) settlementagreement).

B. wHat are tHe Standard proviSionS of a Settlement aGreement?

The settlement agreement usually containsprovisionsincluding(amongothers):

•thenamesofthepartiesinvolved;•thereasonfortermination;•thedismissalpayment(canbezero);•theterminationdate;•whether or not the employee will be exemptfromwork;

•paymentoftheremainingnumberofholidays(ifany,orinderogationofthestatutoryprovision);

•the right of the employee to dissolve thesettlement agreement within 14 days afterconclusion.Ifthisisnotincludedintheagreement,thereflectionperiodwillbeextendedto21daysafterconclusion;

•usually full and final discharge when all theprovisions of the settlement agreement arefulfilled.

C. doeS tHe aGe of tHe employee make a differenCe?

Under Dutch law everyone from the age of 16years old is considered to be legally competentto sign a (employment) contract. However,whenthe employee is under 18 years old, the legalrepresentativeoftheunderageemployeecanvoida signed contract. Therefore, itwould bewise toinvolvethe legal representative(s)ofanunderageemployeewhensigningasettlementagreement.

d. are tHere additional proviSionS to ConSider?

Possible additional provisions in the settlementagreement to be considered are how to settlethe non-competition, non-solicitation and non-poachingclauses(ifany),toreconfirmthesecrecyclause and penalty clause, to return companypropertyand to refrain fromnegative statementsabout one other.



5. remedies for emPloyee seeKing to challenge wrongful terminationAfter concluding a settlement agreement, theemployeehasareflectionperiodof14days.Duringthatperiodtheemployeecanwithdrawthegivenconsent at any time, without having to give anexplanationforhis/herchangeofmind.Whenthisperiodisover,itisstillpossibleunderDutchlawtovoidacontract.Acontractisvoidableifforexampleoneofthepartiesmisusedthecircumstancesthattheotherpartywasinwhilesigningthesettlementagreement, or if a party was misled into signingthe contract by the other party. The time limitfor invoking a voidable settlement agreement onone of the above-mentioned terms is 3 years. Ifthe employment contract is not terminated bya settlement agreement, the possibilities for anemployeetochallengeawrongfulterminationarediscussedundersectionVIII.part1.above.

6. whistleblower laws In the Netherlands, we have the DutchWhistleblowersAuthority,which is foremployeeswho want to report an abuse in the workplacewithin the public or private sector. TheWhistleblowersAuthorityprovidesadvice,supportand, if necessary, carries out investigations. TheWhistleblowers Authority Act, which came intoforceintheNetherlandson1July2016,underliestheestablishmentoftheWhistleblowersAuthority.ThisActobligesallorganisationsintheNetherlandswith more than 50 employees to introducean internal reporting procedure for reportingabuses. The Act also bans retaliation against thewhistleblowers (individuals)whohave reported apossibleabuseinthepropermanner.



ix. restrictive covenants 1. definition of restrictive covenantsA restrictive covenant is a clause included in the(signed) employment contract that prohibitsthe employee from engaging in certain activitiesfor a specified period of time. The clauses mustbe written down in a language the employeeunderstands.Examplesofrestrictivecovenantsare:

•anon-competeclause;•anon-solicitationclause;•asecrecyclause.

2. tyPes of restrictive covenants

A. non-compete cLAuses

In principle, employing a non-competition clauseinafixed-termemploymentcontractisprohibited,unless the employer has a substantial businessinterestinincludingsuchaclause(whichmustbesubstantiatedintheemploymentcontract).

Non-competition clauses, effective for a certainscopeofactivities,acertaingeographicalareaand/or foracertainnumberofyears,mustbeagreeduponinwriting.Furthermore,theemployeemustbeatleast18yearsoldatthetimeofsignature.

The restriction must be limited to what isreasonably necessary to protect the employer’sbusinessinterests.Typically,adurationofoneyearisconsideredreasonable.Limitationsastoterritoryandthenatureofactivitiesdependsonthebranchinwhichtheemployeroperatesandthepositionoftheemployee.

The employer can enforce the non-competitionclause in Court and claim damages from theemployee. In practice, a penalty clause is usuallyagreeduponbetween thepartieson thebasisofwhichtheemployeehastopayanagreedamounttotheemployer,iftheemployeebreachesthenon-competitionclause.Theemployermightalsotakethenewemployer toCourtas thenewemployermightactunlawfullybyhiringanemployeewhileknowing that the employee breached the non-competitionclausewiththepreviousemployer.

Enforcement of the non-competition clause canalso be mitigated or denied by a Court. A non-competition clause may become (in whole orpartly) invalid if the responsibilities ensuing fromtheemployee’spositionaresubstantiallyamended.Ifthenon-competeclausepreventstheemployeefrom being employed elsewhere, the Court mayorder that the employer has to compensate theemployeeduringtheperiodinwhichtheemployerholds the employee to the non-compete clause.Theemployercanunilaterallyreleasetheemployeefrom his/her obligations under the non-competeclauseinwhichcasetheemployerwillnolongerberequiredtopayanycompensation.

b. non-soLicitAtion cLAuses

Employment contracts can also contain a non-solicitation clause, which stipulates that theemployee is not allowed to solicit his/heremployer’scustomersoremployeesduringorafterhis/her employment. The clause has to be in alanguagetheemployeeunderstands.Therearenootherrequirementsastoform. The employer can enforce the non-solicitationclause in Court and claim damages from theemployee. In practice, a penalty clause is usuallyagreeduponbetween thepartieson thebasisofwhichtheemployeehastopayanagreedamount




to the employer, if the employee breaches thenon-solicitation clause. Enforcement of the non-solicitationclausecanbemitigatedordeniedbyaCourt.

3. enforcement of reStriCtiVe COVenAntS – Process and remediesArestrictivecovenantcanbeenforced inCourt ifanemployeedoesnotcomplywiththerestrictions,which follow from contract. In Court, it will firstbe decided whether the restrictive covenant inthe employment contract is valid, and secondly,whethertheemployeebreachedit.

The clause is valid if the prohibition is limitedto what is reasonably necessary to protect theemployer’sbusinessinterests.Typically,adurationof one year is considered reasonable. Limitationsastoterritoryandnatureofactivitydependonthebranch in which the employer operates and theareawheretheemployeelives.

If it isdecided that theemployeedidnotcomplywith a validly agreed restrictive covenant, theemployercanrequesttheCourttoissueabanandto imposeapenalty.Theemployercanalsoclaimdamages from the employee for not complyingwithwhattheyagreedupon.

An employee can also go to Court and ask to(partially)voidarestrictivecovenant.

4. use and limitations of garden leave Inprinciple,gardenleaveisnotaconceptrecognisedunder Dutch law. Unilaterally releasing anemployeeofhis/herdutieswithouttheemployee’sconsent, is prohibited. If an employee does notagreetoarelease,theemployercansuspendtheemployee.However,theemployershouldbeabletosubstantiatethereasonbehindthesuspensionand if a fair reason isnot inplace, theemployeecanclaimreinstatement(eveninCourt).Themainquestion iswhat a “good employer”would do inasimilarsituation.Ifagoodemployerwouldhaveneverreasonablygivenarelease/suspensioninthissituation,itwouldbeunlawfulfortheemployertodoso.



x. transfer of undertaKings 1. emPloyees’ rights in case of a transfer of undertaKing

a. in General

TheDirective on employee rights and obligationsin connection with a transfer of undertaking isimplementedinArticles7:662–666oftheDutchCivil Code. According to these articles, a transferof undertaking is “a transfer resulting from anagreement,mergerorsplitofaneconomicentity,which entitymaintains its identity.” It is explicitlystipulated that a part of a companymay also beregardedasaneconomicentity.

Inotherwords,theapplicabilityofArticles7:662-666oftheDutchCivilCodedependsonwhetherornot the identityof the transferredentity remainsthesame.AdirectcontractualrelationshipbetweenthetransferorandthetransfereeisnotrequiredfortheDirectivetobeapplicable:thetransfermaytakeplacethroughthemediationofathirdparty,suchastheownerorthepersonputtingupthecapital.

It is necessary to assess the facts in order toconcludewhetherornottheidentityoftheentitywilltransfer.Accordingtocaselaw,theidentityof(partof)acompanycanbedeterminedbyvariousfactors,including(butnotlimitedto):(a)thetypeofbusiness;(b)whetherornotitstangibleassets,e.g.buildings and movable property, are transferred;(c) the value of its tangible assets at the time ofthetransfer;(d)whetherornotthemajorityofitsemployees are taken over by the new employer;(e)whether or not its customers are transferred;(f) thedegreeof similaritybetween theactivitiescarried on before and after the transfer; and (g)theperiod, if any, forwhich thoseactivitiesweresuspended.

The European Court of Justice has - for example- ruled that in a labour-intensive company, thegroup of employees who do the work constitutetheeconomicentity. Ifanessentialpart (intermsof quantity or expertise) of these employees isemployed directly by the acquirer, in principle,preservationof the identityof theenterprise canbe assumed as a result of which the regulationspertaining to a transfer of undertaking areapplicable. In another case, the European Courtof Justice ruled that the identity of the companywasnotbasedonitsemployees,butonitstangiblefixedassets(inthatcase,buses).

If the criteria of the articles 7:662 – 666 of theDutch Civil Code aremet, upon the transfer of abusiness,therightsandobligationsoftheemployerandthatbusinessundertheexistingemploymentcontractswiththeemployeeswillbeautomatically(by operation of law) transferred to the acquirerof the business. A prohibition of termination isapplicableincasethereasonofsuchterminationisthetransferofundertaking.

B. employee repreSentation

The employer has to consult the works council(or other employee representative body) abouta proposed decision regarding the transfer ofactivities.Theemployerhas toprovidetheworkscouncil or employee representative body withinformation on the grounds of the intendeddecision,theconsequencesfortheemployees,andtheintendedmeasurestobetaken.Theemployeralso has to inform the individual employeesabout the transfer of an undertaking and theconsequencesthereoffortheemployee.




2. liability of former emPloyer and successorForoneyearafterthetransferofthebusiness,theseller and the acquirer are jointly and severallyliableforthefulfilmentoftheobligationsundertheemploymentcontractsinsofarastheseobligationsareaccruedbeforethetransfer.

a. penSion riGHtS

In principle, the buyer has to continue to applythepensionschemeoftheseller.Therearethreeexceptions: 1) if the buyer has its own pensionscheme which he offers to the transferringemployees;2)ifthebuyerhastoapplyamandatorysectoralpensionscheme;3) ifaCollectiveLabourAgreementdeviatesfromthepensionscheme.

B. employee’S oBJeCtion

If an employee explicitly objects to the transfer,theemployeewillnotenterintotheemploymentofthetransferee.Theemploymentcontractoftheemployeewillthusendbyoperationoflawatthetimeofthetransfer.



xi. trade unions and emPloyers associations 1. brief descriPtion of emPloyees’ and emPloyers’ associations Onlyincaseofacollectivedismissal,orifprovidedbyaCollectiveLabourAgreement,theemployerisobligedtoinformthetradeunionswhenitreportsits intention to implement the dismissal to theEmployee InsuranceAgency.Thedismissalcanbereported to the trade unions by sending them acopy of the written notification to the EmployeeInsurance Agency (provided that any applicableCollective LabourAgreement does not oblige theemployerto informthetradeunionsatanearlierstage).

As setoutunder sectionVIII.part2.above,afterthe report has beenmade, there is a one-monthwaiting period. No waiting period applies if thereport is accompanied by a statement of thetradeunionsconfirmingthattheywereconsultedand that they agree with the termination of thecontracts.

Frequently,asocialplan(e.g.terminationpackages)is negotiated. There is no legal obligation for theemployertonegotiatethecontentofasocialplanwiththetradeunions.Nevertheless,asocialplanoftenformsanimportantpartofthenegotiationswiththetradeunions,astheywillbasetheirsupporton the content of that plan. If the employer andthetradeunionsconcludeasocialplan,aCourtwillusuallyawardtheemployeeaseveranceamountinaccordancewiththatsocialplan,unlessapplicationwouldbeclearlyunfairtotheemployee.

2. rights and imPortance of trade unionsTrade unions play important roles in case ofcollective dismissals, strikes and collectivebargaining. Trade unions can also represent theindividual interestsofemployees.ContrarytotheWorks Council (see below) there is no statutorynumberofmembersandeveryonecanbecomeamemberofatradeunion.

3. tyPes of rePresentationTradeunionsare involved in collectivedismissals,strikes and collective bargaining. Members of atradeunioncanalsoberepresentedincaseofanindividualdismissal.

a. nUmBer of repreSentativeS

There is no minimum or maximum number ofrepresentativestoformatradeunion.Nevertheless,tradeunionswithalargenumberofrepresentativesobviouslyhavemoreinfluence.

B. appointment of repreSentativeS

Dutch law does not provide rules for theappointmentofrepresentativesoftradeunions.




4. tasKs and obligations of rePresentativesDutch lawdoesnotproviderulesabout thetasksandobligationsofrepresentativesoftradeunions.

5. emPloyees’ rePresentation in managementAll employees (including managers) can becomemembers of a trade union. Please note that anemployer cannot terminate an employmentcontract of an employee because of his/hermembership of a trade union. However, theemployeeisobligedtoactinaccordancewithrulesregarding the concept of “good employeeship”.Anemployeemaynotinterruptthebusinessofanemployer unreasonably, because of trade unionwork and such activities may only be performedduring office hours if the employer providedconsentbeforehand.

6. other tyPes of emPloyee rePresentative bodies

a. typeS of repreSentation

AccordingtotheDutchWorksCouncilAct(inDutch:Wetopdeondernemingsraden),anentrepreneurmaintaining an enterprise in which, as a rule, atleast50employeeswork, isobligedtoestablishaworkscouncilforthepurposesofconsultationwithandrepresentationoftheemployeesemployedbytheenterprise.Theobligationtoestablishaworkscouncil may also result from a provision to thiseffectinaCollectiveLabourAgreement.

B. nUmBer of repreSentativeS

Thenumberofworkscouncilmembersiscalculatedasfollows:

50 employees 50–100employees 100 – 200 employees 200–400employees 400 – 600 employees 600–1000employees 1000 – 2000 employees 2000+employees

Iftheemployergivespermission,theworkscouncilcandetermineanothernumberofmembersinitsregulations.

C. nomination of repreSentativeS

Employees can stand for election for the workscounciliftheyhavebeeninserviceforatleastoneyear. The election of the members of the workscouncil is executed by a secret written vote onthe basis of one or more lists of candidates. Anemployeeisallowedtovoteifhe/shehasbeeninserviceforatleastsixmonths.

d. taSkS and oBliGationS of repreSentativeS

Information Right of the Works Council

The works council is entitled to receive allinformation,whichitreasonablyneedstoproperlyperform its duties. The information shall beprovidedinwriting,ifrequested.Atleasttwiceperyear theemployer shall inform theworks councilorally or in writing of the expectations regardingtheactivitiesandtheresultsoftheenterpriseinthecomingperiod,inparticularwithrespecttomattersinwhich the prior advice of theworks council isrequiredandtoallinvestmentsintheNetherlandsand abroad. Furthermore, the employer mustprovidetheworkscouncilwithspecificinformationconcerning any proposed decision on which theprioradviceoftheworkscouncilisrequired.


3 members5members7 members9members11 members13members15 members2moremembers,uptoamaximumof25members,forevery1000employeesbeyondtheinitial2000



Right of Advice

Pursuant to Article 25 paragraph 1 of the DutchWorks Council Act the employer is obliged torequesttheadviceofitsworkscouncilinadvance,incaseofan intendeddecision regarding,amongothers:

•transfer of control of the company or a partthereof;

•establishment, take-over or relinquishment ofcontrolofanothercompany,orentering intoormaking a major modification to or severing apermanent co-operative venture with anothercompany, including entering into or effectingmajor changes of or severing of an importantfinancial participation on the account of or forthebenefitofanothercompany;

•terminationoftheoperationsofacompanyoramajorpartthereof;

•majorreductionsorexpansionsorotherchangestothecompany;

•majorchangesintheorganisationalstructureofthecompanyorintheallocationofpowerswithinthecompany.

Theadvicemustberequestedwithinareasonabletimeframetoallowtheworkscounciltohaveasayinthedecisionthatistobetaken.Therequestforadvicemustincludeasummaryofthereasonsforthe decision, the expected consequences (if any)andthemeasuresproposedinresponse.Theworkscouncilcannotissueitsadviceuntilthematterhasbeendiscussedinatleastoneconsultationmeeting.If,aftertheadvicehasbeenissued,theemployerdecides togo throughwith theplanneddecision,it must inform the works council accordingly inwriting.

Should the employer’s decision deviate from theadvicegivenbytheworkscouncil,theemployermustgiveafullaccountofthereasonswhy(inwriting).Theexecutionofthedecisionmustbepostponedfor one month. During that month, the workscouncilmay lodgeanappealwith theCompaniesChamberoftheCourtofAppealinAmsterdam(inDutch: Ondernemingskamer van het GerechtshofAmsterdam).Anappealmayalsobelodgediftheemployer fails to request advice. An appeal mayonlybelodgedif,inweighingtheinterestsinvolved,theemployerinallreasonablenesscouldnothavearrived at the decision. The Companies Chamber

can reject the decision only if the decision was“manifestlyunreasonable.”

Except for the one-month waiting period, thereare no statutory terms for the works councilconsultation. The Dutch Works Council Act onlyrequires that the advice should be requestedwithinareasonabletimeframetoallowtheworkscouncil tohaveasay in thedecisionthat is tobetaken.Ingeneral,approximatelytwomonthspassbetweensubmittingtherequest foradviceto theworks council and receiving the works council’sadvice.Thedecisiontoreorganisecanonlybetakenand implemented if the works council renders apositiverecommendationor,ifitissuesanegativerecommendationornoadvice,afteraone-monthwaitingperiod.

Right of Consent

Pursuant to Article 27 paragraph 1 of the DutchWorks Council Act the employer is obliged torequest theprior consentof itsworks council fordecisionsregardingtheestablishment,modificationor withdrawal of regulations concerning (amongothers)pension insurance,profitsharing,workinghours, job classification and remuneration. Ifthe works council refuses to give its consent,the employer can ask the Cantonal Court to giveconsent.TheCantonalCourtwillonlygiveconsentifthedecisionoftheworkscouncilisunreasonableor if the intendeddecisionof theentrepreneur isnecessarybecauseofcompellingbusinessinterests.

The request for consent must be in writing andmust include a summary of the reasons for theintendeddecisionandtheexpectedconsequencesfortheemployees(ifany).Theworkscouncilcannotgive consent until thematter has beendiscussedin at least one consultation meeting. After theconsultation meeting, the works council mustinformtheemployerassoonaspossibleaboutthedecision,writtenandreasoned.Afterthedecisionof theworks council, theemployerhas to informthe works council as soon as possible about thedecisionthathasbeentakenbytheemployerandonwhichdatethedecisionwillbeimplemented.

Theconsentisnotrequiredifthematterisincludedin a Collective Labour Agreement or a regulationofemploymentconditionsestablishedbyapublicbody.



IfanydecisionasmentionedinArticle27paragraph1oftheDutchWorksCouncilActistakenwithouttheconsentof theworks councilor theCantonalCourt, that decision is void if the works councilinvokes the nullity of the decision within onemonthafterbeinginformedaboutthedecision,orin absence of being informed,within onemonthafterthedecisionwasimplementedandtheworkcouncilwasawareofthat.

Theworks council can ask the Cantonal Court tooblige the employer not to execute the decision.TheemployercanasktheCantonalCourttodeclarethat theworks councilwrongly invoked nullity ofthedecision.

Right of Advice re: Appointment and Dismissal of Director

The employer must give the works council theopportunity to give advice about every intendeddecision toappointordismiss thedirectorof theemployer.Theadvicemustberequestedwithinareasonabletimeframetoallowtheworkscouncilto have a say in the decision that is to be taken.The employer informs the works council aboutthe reasons of the intended decision. In case ofthe appointment of the director the employerhas to provide information so that the workscouncilcangiveanopinion.Theworkscouncilcanrequest for thematter tobediscussed inat leastone consultationmeeting. If, after theadvicehasbeen issued, theemployerdecides togo throughwith its intended decision, it must inform theworks council accordingly in writing. Should theemployer’sdecisiondeviatefromtheadvicegivenbytheworkscouncil,theemployermustgiveafullaccountofthereasonswhy(inwriting).Thereisnorightofappeal.

Employees’ Representation in Management

Inprinciple,everyemployee(includingmanagers)can stand for election for the works council ifthe employee has been in service for at least 12months. Only the executive director is excludedfromelection.



xii. emPloyee benefits 1. social securitySocialsecurityintheNetherlandscanbesubdividedinto social insurance benefits (in Dutch: socialeverzekeringen)andsocialwelfarebenefits(inDutch:sociale voorzieningen), depending on the sourceof the funding. Social insurance is funded fromthecontributionspaidbyemployees.This systemis compulsory. All employees are automaticallyinsured and pay a contribution. Social welfarebenefits are financed from central governmentalfunds.

a. reQUired ContriBUtionS

Dutch law requires employers to make certainwithholdingsfromtheemployee’ssalaryforincometaxpurposesandtheemployee’snationalinsurancecontributions.Anemployerisfurthermorerequiredto pay certain social security premiums for itsemployees.

2. healthcare and insurancesIn theNetherlands, there is noobligation for theemployer to provide for a healthcare insurancepolicy.

3. required leave

a. HolidayS and annUal leave

Pursuant toArticle7:634of theDutchCivilCode,employees are entitled to a statutory minimumnumber of vacation days equivalent to fourtimes theweeklyworkinghours. Forexample,anemployeewith a full-timeworkweek of 40 hoursisstatutorilyentitledtoaminimumof20vacationdaysperyear.

Asfrom1January2012,vacationdayswilllapseiftheyarenottakenwithinsixmonthsaftertheyearin

whichtheywereaccrued,unlesstheemployeewasnotreasonablyabletotakethem,buttheschemeappliesonly in respect to the statutoryminimumofvacationdays.Inaddition,illemployeeswillbeentitledtoaccruethesamefullnumberofvacationdaysasemployeeswhoarenotill.

In general, the vacation period is fixed accordingto the employee’s wishes. If compelling businessreasons would not allow the employee to takevacationduringthatspecificperiod,theemployershouldinformtheemployee(inwriting)withintwoweeksaftertheemployee’srequest(inwriting),indefaultofwhichtheperiodisfixedaccordingtotheemployee’swishes.

Inadditiontovacationdays,employeesareentitledto a holiday allowance, which, in general, equals8%oftheannualsalary,insofarastheannualsalarydoesnotexceedthreetimestheannualequivalentoftheminimumwage.

B. maternity leave

Female employees have the right to (at least) 16weeks of maternity leave. During this maternityleave, the Employee Insurance Agency will pay100%ofthedailywage,nottoexceedthemaximumdailywage.

The maximum daily wage in the Netherlands iscurrentlyEUR219,28.

C. BirtH leave

From1January2019,partnerswillhavefivedaysof birth leave at full pay after the birth of theirchild (based on full-time employment). Partnerscanchoosetotakethisleaveimmediatelyafterthebirthoftheirchild,ortospreadtheleaveoverthefirstfourweeksafterthebirth.

Asof1July2020,partnerscantakeadditionalbirthleave for up to 5 weeks. First, the partner musttake the5daysofbirth leave (basedon full-time




employment). During this leave, the employee isentitled to70%ofhisorher salary (increaseduptothemaximumdailywages).Theadditionalbirthleavemustbetakenwithin6monthsofthechild’sbirth(onorafter1July2020).

d. parental leave

An employee with a child under eight years oldin his or her care, is entitled to parental leave.The employee can take atmost 26 times his/hernumber of weekly contractual hours as parentalleave. The right of parental leave endswhen thechild becomes eight years old. Parental leave isunpaid leave and no holiday entitlementswill bebuiltupduringthehoursofparentalleave.

e. SiCkneSS leave

Pursuant toArticle7:629of theDutchCivilCode,employers are obliged to continue to pay thesalariesofsickemployeesforthefirsttwoyearsofillness.Theemployerisobligedtopay70%oftheemployee’ssalary.Thesalarypaidbytheemployerduring the first year of sickness cannot be lessthantheminimumwage.Forthesecondyear,theminimumwagelimitdoesnotapply.The70%isnotcalculated on the amount of salary that exceedsthemaximumdailywage.Mostemployees in theNetherlands are bound to a diverging clause laiddownineitheranindividualemploymentcontractoraCollectiveLabourAgreement(suchclausesareoftenmorefavourabletotheemployee).

4. Pensions: mandatory and tyPically Provided In general, anemployer isnotobliged toprovidepension benefits to an employee unless it haspromised the employee that it would providefor a pension scheme, or if a Collective LabourAgreementorgovernmentinitiativerequiresso.Iftheemployerhasofferedapensionschemetooneof the employees, it is obliged to offer the samepensionschemetoallotheremployees.

ChristiaanObermanPartner,Palthe oberman [email protected]+31203446101


http://www.paltheoberman.nl

mailto:oberman%40paltheoberman.nl%20?subject=



PaltheObermanAdvocatenisthefirstnichelawfirmintheNetherlandstofocusexclusivelyonemploymentlawinabroadsense,includinglabourmigration,andoncivil-servantslaw.Thefirmwasestablishedin2001byitsthreefoundingpartnersunderitscurrentname,and has steadily grown since then in terms of thenumberofclientsandlawyers.PaltheObermanaimsfor the rightbalance inall itsactivities.Highqualityand flexibility for both its clients and lawyers areparamount.Thefirm’sflexibilityisbasedonspeedandpersonalcontacts.ThefirmisrecognisedbyChambersandTheLegal500,amongothers.

This memorandum has been provided by:

Palthe Oberman PrinsHendriklaan411075BAAMSTERDAMTheNetherlandsP+31203446100www.paltheoberman.nl

Palthe oberman netHerlandS


ContaCt USFormoreinformationaboutL&EGlobal,oraninitialconsultation, please contact one of our memberfirmsorourcorporateoffice.We look forward tospeakingwithyou.

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Thispublicationmaynotdealwitheverytopicwithinitsscopenor cover every aspect of the topicswithwhich it deals. Itisnotdesigned toprovide legalorotheradvicewith regardtoanyspecificcase.Nothingstatedinthisdocumentshouldbe treated as an authoritative statement of the lawon anyparticular aspect or in any specific case. Action should notbetakenonthisdocumentalone.Forspecificadvice,pleasecontacta specialistatoneofourmemberfirmsor thefirmthatauthoredthispublication. L&EGlobal CVBA is a civil company under Belgian law thatcoordinates an alliance of independentmember firms. L&EGlobal does not provide client services of any kind. Suchservices are solely provided by the member firms in theirrespectivejurisdictions. Incertaincircumstances,L&EGlobalisusedasabrandorbusinessnameinrelationtoandbysomeorallofthememberfirms.L&EGlobalCVBAanditsmemberfirms are legally distinct and separate entities. They do nothave, and nothing contained herein, shall be construed toplacetheseentitiesintherelationshipofparents,subsidiaries,agents,partnersor jointventures.Nomemberfirm,northefirm which authored this publication, has any authority(actual, apparent, implied or otherwise) to bind L&EGlobalCVBAoranymemberfirm,inanymannerwhatsoever.

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