The Dutch government has adopted an Act, called ‘Werk en Zekerheid’ (Work and Security), which will change the Dutch labour law dramatically. The first changes have taken effect since 1 January 2015.

Below you will find a summary of the changed legislation.

Changes as from 1 January 2015

  • A probation period is no longer permitted for temporary contracts for 6 months or shorter. It is still allowed to conclude a probation period for a fixed term contract which lasts longer than six months. At this moment the probation period for fixed term contracts up to two years is one month and for contracts for an undefinite term two months.
  • If the employee has a fixed term contract for six months or longer, the employer has the obligation to notify the employee one month in advance whether or not this contract will be extended. If the employer fails to do so in time, the fixed term employment contract will still be terminated automatically and lawfully, but the employer will be liable to pay a penalty to the employee equal to the amount of one month of the salary). •It is not allowed to conclude a non-competition clause in a fixed term contract, unless the employer has a predominant business interest. This interest should be motivated in writing, when the employer relies on the non-competition clause, he must be able to prove that this interest still exists..

Changes as from 1 July 2015

  • The employee can have three contracts for a definite period within a period of 24 months. This means that the fourth contract will be a contract for an indefinite period or if the total period of 24 month will be exceeded. Under the present law is this period 36 months.
  • The interval period between the contracts will be 6 months instead of 3 months as applicable under the present law, so to be assume a new “chain” of consecutive contracts.
  • For economical reasons and for reasons of long term (two years or longer) sickness, the employer has to file the request for a permission to dismiss an employee with the State Labour Commission (UWV). At this moment the employer has the possibility to choose between the procedure at the Civil Court and the UWV.
  • The Court will have the jurisdiction regarding the termination due personal circumstances and conflicts between the employee and employer. Effectively, that is the practice under the present law.
  • The employee will have a legal right to receive a transition allowance (transitievergoeding) if the employment contract has lasted for at least two years. This also concerns the employee with a contract for a definite period. However, the employer must initiate the termination of the employment contract. At this moment there are different possibilities regarding the compensation. If the dismissal is approved by the UWV, than in principle no compensation is applicable. If the Court rescinds the employment contract, it will grant a compensation. The amount of compensation will depend on the circumstances. Usually the amount of compensation is calculated by the so called Cantonal Courts formula.
  • The transition allowance will be maximized at € 75.000. The calculation of the transition allowance will depend on the length of the employment. An employee who is working shorter than 10 years will receive 1/3 month salary per year of service. An employee who is working more than 10 years, will receive 1/2 month salary per year of service that the employee has been in service longer than 10 years. The employees, who are over 50 years and have more than 10 years of employment, will receive 2/3 month salary per year of service till 2020. The compensation is not maximized under current law and in certain cases the application of the Cantonal Courts formula can lead to a compensation which is much higher than 1/3 month salary per year of service.
  • The definition of “suitable work” in the context of a unemployment benefit will be tightened. This means that after 6 months, instead of 12 months, all work will be considered suitable.

Changes as from 1 January 2016

  • The unemployment benefit will be gradually reduced by one month per trimester from 2016 until it has finally been reduced to 24 months as from July 2019. Under the present law the unemployment benefit is maximized to 38 months.
  • For the first 10 years of employment an employee will receive 1 month of unemployment benefit for each year of service. For the following years, the employee will receive ½ month of unemployment benefit for each year of service. At this moment the unemployment benefit amounts 75% of the monthly salary for the first two months of unemployment and 70% of the monthly salary for the subsequent period.

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