✍️ Written by Seliz Demirci, employment lawyer at GMW lawyers.
Receiving a job offer in the Netherlands is exciting, and it can be tempting to sign the employment contract right away. However, the best thing you can do is resist this urge.
Why’s that? Because once signed, many of the agreements in an employment contract become legally binding.
While some may be overridden by statutory law, most will hold up, and you could find yourself committed to terms you didn’t fully agree with.
That’s why it’s important to be critical not only of the most obvious terms of employment, such as your salary but also of the other clauses.
So, let’s talk about the most important things to check on your Dutch employment contract. 👇
Starting a job in a foreign country is as exciting as it is intimidating. To make sure you get everything right, don’t hesitate to reach out to GMW lawyers to get help from one of their expert employment lawyers.
1. What is the type and duration of your contract?
Dutch employment law distinguishes between fixed-term and indefinite employment contracts — tijdelijk contract versus vast contract.
Usually, employers first offer a fixed-term employment contract, but with the current tight labour market, many choose to immediately offer indefinite-term contracts to secure talent.
So, what’s the difference? For one, a fixed-term contract (which can also be referred to as a temporary employment contract) ends automatically on a pre-determined date.
An indefinite employment contract (also known as a permanent contract) expires only when the employee resigns, or when the employer terminates the contract.
However, the two types of contracts also differ in other ways, such as the probationary period and the validity of a non-compete clause.
For example, a fixed-term contract lasting between six months and two years can only include a probationary period of up to 1 month. In contrast, a probationary period of up to 2 months can be agreed upon in an indefinite-term contract.
When it comes to non-compete clauses, these are generally prohibited in fixed-term contracts unless the employer provides written justification.
2. What are the terms for your working hours?
Your Dutch employment contract has to adhere to the Working Hours Act, which, among other things, regulates the maximum number of hours your employer can require you to work over a given period of time.
According to the Act, employees aged 18 and over can work a maximum of 12 hours per day and 60 hours per week.
However, this isn’t allowed permanently, and there are specific limits based on longer periods:
- Over a 4-week period, you may work an average of 55 hours per week, though collective agreements or company policies can offer some flexibility. You can never work more than 60 hours in one week.
- Over a 16-week period, you may work a maximum of 48 hours per week on average.
When it comes to your working hours and the terms surrounding them, it’s also important to check your employer’s policies around remote working.
READ MORE | What are your rights as an international working in the Netherlands? We asked the experts
Contrary to what many people think, there is no legal right to work remotely in the Netherlands — but you and your employer can make agreements in this regard.
3. Are you covered by a Collective Labor Agreement (CAO)?
Your employment contract may be governed by a Collective Labour Agreement (CAO, collectieve arbeidsovereenkomst), which outlines rules regarding various employment conditions.
This includes regulations on minimum salaries for specific positions, notice periods, and working hours.
These rules are negotiated between employers and unions or workers’ representatives, and your employer cannot modify them in a way that negatively impacts you as an employee.
Your employment contract will usually indicate whether it falls under a Collective Labour Agreement and, if so, which one.
Your employer is obligated to Collective Labour Agreement if:
- They have established a company-specific agreement (company collective agreement);
- They are a member of an employers’ organisation that has concluded one for them (sectoral collective agreement);
- There is an industry-wide collective agreement that has been declared generally binding to all employers in the sector.
4. Make sure you understand your base salary, incentives, and benefits
If your employment contract falls under a Collective Labour Agreement, it’s a good idea to consult this for any guidelines regarding your base salary.
If this is not the case, you and your employer are free to determine your base salary by mutual agreement.
READ MORE | What is the average salary in the Netherlands? What you need to know in 2024
On top of your base salary, you are legally entitled to holiday allowance — unless otherwise agreed in a Collective Labour Agreement. Additionally, your employer might offer a year-end bonus as an extra incentive.
If you’re part of a bonus or incentive scheme, it’s important to make sure that the eligibility criteria are clearly defined.
If these are too vague, it is wise to clarify them in advance to avoid your employer being too arbitrary with them.
5. How are your travel expenses reimbursed?
Speaking of benefits, it’s important to determine how (if at all) your travel expenses are reimbursed by your company.
Although public transport costs are quite high in the Netherlands, it’s important to know that your employer is not legally obliged to reimburse your commuting expenses. Many do, but they’re not required to.
If your employer does reimburse travel costs, the typical amount is up to €0.23 per kilometre, which is the maximum that remains tax-free. If they provide a higher reimbursement, the excess amount is considered part of your salary, meaning taxes must be withheld on it.
If you have a public transport OV card or a (lease) car through your employer, travel expenses are, in principle, not reimbursed separately.
Not sure whether all is in order with your Dutch employment contract? Get a professional involved! GMW’s employment lawyers are here to help you out with advice tailored to your situation.
6. Are there any non-compete and confidentiality clauses in your contract?
When signing your Dutch employment contract, you might find that it includes a non-compete or a confidentiality clause. It’s crucial to understand these, along with the impact they could have on your future career opportunities.
While non-compete clauses may not be the first items you consider in an employment contract, they hold significant importance. These clauses are legally valid if they are agreed upon in writing within an indefinite employment contract, even if their wording is vague.
In contrast, non-competition clauses in fixed-term contracts are often not legally enforceable unless there are compelling business interests that are clearly specified in the contract.
It’s good to know that a non-compete clause can often be negotiated at the start of the employment contract, for example, by not including the clause in the contract at all or by limiting its duration or scope.
If you don’t do this when entering the employment contract, it is difficult to negotiate its waiver or adjustment upon termination.
Hence, it is smart to discuss with your future employer if and to what extent a such clause may be too restrictive for you and whether it is necessary to include it.
7. What are the terms and notice period for termination?
Naturally, there aren’t only things to look out for when you first start your job but also for later down the line when you may want to quit it. That’s why it’s important to check the terms of termination in your Dutch employment contract.
There are different ways in which an employment contract can be terminated in the Netherlands. They are:
- By the employee: The employee can initiate the termination.
- By a termination procedure through the court or the UWV: This involves formal proceedings for dismissal.
- By summary dismissal: This is an immediate termination due to serious misconduct.
- By mutual agreement: Both parties can agree to end the contract, resulting in a termination agreement.
By law, employees must give a notice period of one month. However, this can be extended by mutual agreement in your contract.
In such cases, the employer’s notice period must be double the employee’s, meaning a clause specifying a two-month notice period for both parties is not legally valid.
READ MORE | Unfair dismissal in the Netherlands: What you need to know [2024 guide]
Have the statutory notice periods been declared applicable to your contract? If so, your employer’s notice period depends on how long your employment contract has lasted. The following notice periods for the employer then apply:
- Less than 5 years: 1 month
- Between 5 and 10 years: 2 months
- Between 10 and 15 years: 3 months
- 15 years or longer: 4 months
Going through your Dutch employment contract can be tedious, but it’s crucial to make sure you fully understand all the terms and conditions that could impact your rights and obligations as an employee.
Success! 💪
Do you have experience working in the Netherlands? Share your thoughts in the comments!