Changes in Dutch labour law 2015
On 1 January 2015, the first part of the amendments to the Work and Security Act (WWZ) was introduced. On 1 July the second part of the WWZ will be introduced. But what exactly are the changes? Dutch employment lawyer Sander Schouten has listed the most relevant changes.
Non-competition clause and trial period restricted
Contracts for a definite period can no longer contain a noncompetition clause, unless the employer records, in writing and stating the reasons, which substantial business interests require a noncompetition clause. Without stating these reasons, a noncompetition clause in a temporary employment contract entered into after 1 January is null and void. It is also no longer possible to agree a trial period in a contract for a definite period that lasts six months or shorter.
Term and termination of a temporary contract
From 1 July onwards, the possibilities to conclude consecutive contracts for a definite period will be restricted. In a chain of consecutive employment contracts for a definite period, with an interruption of no more than six months, the last contract will be automatically converted in a contract for an indefinite period if this is the fourth contact in the chain, or if the total term of the consecutive contracts is more than two years.
Compensation if notice is given too late
Also, after expiry of a (consecutive) temporary contract of six months or more, the employer has to notify the employee, no later than one month prior to expiry of the contract, whether or not he wishes to continue the employment contract. If the employment contract is continued, the employer shall also state under which conditions he wishes to extend the contract. If the employer fails to comply with this obligation, he shall compensate the employee with one month’s wages. If this notice is not given on time, the employer shall compensate the employee proportionally.
Process for dismissal employee changed
There will also be a number of changes in dismissal law. These changes include, for example, the process to be followed when requesting permission for the dismissal of an employee. These changes shall be introduced on 1 July.
The Employee Insurance Agency (UWV) shall check procedure
Under the new regulations, dismissals for business economic reasons or long-term incapacity to work shall be checked by the UWV. Intended dismissals for inadequate performance, imputable acts or negligence by the employee shall be submitted to the Subdistrict Court.
Dismissed employee has longer time for reflection
Starting 1 July, an employee who agrees to his dismissal will have the opportunity to withdraw his agreement in writing within 14 days without stating the reason. This also applies if the employment contract is terminated using a settlement agreement. It is no longer possible to exclude this reflection period in a contract.
Transition payment after a two-year contract
Based on the new regulations, an employer has to make a so-called transition payment if he terminates a contract that lasted for 24 months or longer. Termination means giving notice, dissolution or non-continuance of a contract for a definite period. This applies both to contracts for an indefinite period and for a definite period. The main exception is that no compensation has to be paid for termination by mutual consent or if the employee took the initiative to terminate the agreement.
Age matters for compensation
Transition payments are calculated as follows: for the first 120 months of the employment contract the employee receives compensation for (the number of six-month periods that the employee is employed) x (1/6 of the gross monthly salary). From 120 months and over the employee receives compensation of 1/4 of the gross monthly salary for each consecutive six-month period that the employee is employed. Transition payments have a maximum of €75,000 or an annual salary if this is higher than €75,000. There is an alternative calculation for employees who are 50 years or older at the time of the termination of their employment contract, or who have been employed more than 10 years. Apart from the transition compensation, the Subdistrict Court can in future still award fair compensation if there are serious imputable acts or negligence by the employer.
Dutch law firm specialized in labour law
The changes in labour law have consequences both for employees and employers. If you have any questions further to this newsletter, please contact our labour lawyer Sander Schouten.
Law firm AMS is based in Amsterdam, The Netherlands. Our attorneys have gained a broad experience in advising and litigating for (international) companies and individuals. The lawyers are highly involved with their client’s interests and offer a sharp and transparent fee structure. Should you require more information on employment law, or should you have any question with respect to litigation in The Netherlands, please feel free to contact us.