Global Expansion Resources | The Netherlands
The Netherlands Employment Contracts
Helping business expand into The Netherlands with our specialist PEO services
Stay compliant with Dutch employment laws and issue lawful Dutch employment contracts using our expert PEO services
Establishing a happy and compliant workforce is one of the most important aspects of any business, especially one that is expanding into new markets. Outlining a compliant and fair employment contract that protects both you and your employees is a key way to achieve this.
Businesses employing Dutch employees must provide either a temporary or permanent employment contract depending on the length of employment. While Dutch employment contracts can be agreed in writing or verbally it is strongly advised that a written agreement is completed, as certain Dutch laws are only valid in writing. Likewise, written agreements are less likely to cause discrepancies.
Read on to find out all you need to know about creating a compliant employment contract for Dutch employees and how our PEO services can help you achieve this.
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The Netherlands Expansion Advice
What does a Dutch employment contract contain?
As outlined on the Dutch Government website, should include the following:
- the employee and employer’s name and place of residence
- the location(s), at which the work is carried out
- the employee’s job or the nature of the work
- the usual working hours (per day or per week)
- details of salary and payment periods
- start date of the employee
- term of contract
- length of trial period (if applicable)
- holiday allowance and entitlement
- notice period
- pension (if applicable)
- the Collective Labour Agreement (CAO), if applicable for your company
Employment contracts are intended to outline the rights and duties of both the employee and the employer. Any irregularities or failure to include the correct information can result in employee disputes which can work out costly to your business. Therefore, it is paramount that expanding businesses provide a compliant employment contract when expanding into the Netherlands and other new markets.
What types of employment contracts are there in the Netherlands?
There are two types of employment contracts in the Netherlands – a fixed term and a permanent contract.
Fixed-term contract
A fixed-term contract is a temporary contract that has a fixed start and end date. Temporary contracts cannot be continually extended and after 3 consecutive temporary contracts or if contracts cover 3 years, then a permanent contract must be issued.
While fixed-term contracts contain a finish date, employers must still notify employees whether a new contract will be issued or not, otherwise they could face a fine.
Contract for an indefinite period
A contract for an indefinite period is a permanent contract and is the most widely used in the Netherlands. With no set end date either an employee or employer can terminate the employment as long as notice periods are adhered to and valid reasons for dismissal are given by the employer.
Can I change an employment contract?
Under Dutch employment law, employee contracts can be amended. However these changes must be made with the consent of both the employee and employer. Failure to gain consent can lead to disputes and unhappy employees.
There are circumstances where contracts can be changed without employee permission, however, these are rare and can often be complex.
Do I need to translate an employment contract?
While there is no legal requirement to translate an employment contract into a particular language when employing in the Netherlands, it is vital that the employer ensures the employee can understand the written contract. While this may seem obvious, it is important to note that some terms, especially legal discourse, can be lost in translation. In turn, this can lead to misunderstandings, risks and even legal proceedings further down the line.
How do I write a Dutch employment contract?
While brief outlines of what to include in an employment contract are highlighted on the Dutch government website, writing these terms compliantly is a difficult task.
A Dutch employment contract and the employment itself must comply with Dutch employment laws around the following:
- Minimum wage
- Working hours and overtime
- Health and safety
- Breaks
- Sick leave
- Annual leave
- Maternity, paternity and parental leave
- Probation
- Termination notice
In addition to complying with the above generic employment laws, your company will also have to include the Collective Labour Agreement (CAO). A CAO is an agreement between the employer and trade unions about conditions of employment such as wages. A CAO is only needed by select companies so it is vital you check whether your company needs one. If a CAO and employment contract contradict each other then the CAO takes precedence.
An in-depth knowledge of the above contract requirements and in addition CAO requirements takes a colossal amount of time, resources and money. However, failure to comply or the inability to promptly manage employment contracts can lead to unhappy employees as well as legal disputes.
In order to ensure the smooth and compliant onboarding of Dutch employees it is highly recommended that you outsource your employment contracts to a trusted professional. This is where our PEO services come in.
Why use a PEO partner to manage Dutch employment contracts?
Producing compliant Dutch employment contracts is a large burden to carry for expanding businesses. Laden with risk as well as time-consuming, many businesses do not have the resources to dedicate to employment contracts, especially in a foreign country with unfamiliar laws. To add to this, businesses also need to consider payroll, tax, national insurance contributions, recruitment and work visas to name but a few.
Meanwhile, errors in employment contracts can cause employment disputes which runs a huge risk of fines, employee lawsuits and can jeopardise your new expansion into the Netherlands.
A PEO partner can take all of this from your shoulders, allowing you to focus on your company’s expansion knowing that employee contracts are taken care of. At Leap29 our Dutch PEO team are up to date on the latest employment laws and contract requirements in the Netherlands meaning we can issue contracts compliantly and promptly on your behalf.
If you want to find out more about how our PEO Services in the Netherlands can support your global expansion, call our experts today on +44 (0) 20 8129 6860 or email [email protected].
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