Job Contracts and Employment Agencies

What to expect from labour contracts and working conditions in the Netherlands...

There are a few different types of labour contract in the Netherlands

Temporary Contract

This is a labour contract which is temporary in nature or an agreement between an employer and employee that is not continuous. Both parties are required to conform to the stipulation of the temporary contract. The employee renders services while the employer returns the obligation for consideration in sum of money or remuneration of the services delivered by the employee. A temporary contract determines the starting date and the termination of the contract. Upon completion of the contract, a temporary contract will terminate without need of a dismissal process.

It is normal for a temporary contract to have a trial period. This is also executed in writing. A temporary contract with the duration of less than 2 years will have a maximum 1 month trial period, except otherwise decided by a Collective labour Agreement. Temporary contracts with longer duration will have a trial period not more than 2 months. Postponement of the trial period is not admissible.

If either party want the flexibility to terminate the agreement before the expiration date of the contract, it is important that this is stipulated in the contract. If it is not stipulated, and the employer wants to terminate the contract before the agreed expiration of the contract, the employer must abide by the dismissal process set forth in Dutch legal code. It is always recommended to contact the Local Employment Office (CWI) in these circumstances.

A temporary contract is executed in writing and should include all major requirements and responsibilities assigned to each party. Both parties are allowed to agree what will be included in the contract as long as it is within the bounds of the law.

For repeated temporary contracts of the same employers, the law for a permanent contract must also be observed.

Permanent contract

A permanent labour contract generally has no expiration date.

Either party can end a permanent contract but lawful terms of the notification must be considered. For the employee, the legal requirement to end a permanent contract is one month notice. The employer has to apply for an expulsion permit. The period of notification must be contingent on the length of the contract on the day the employer applies for a dismissal permit.

It is always recommended to contact the Local Employment Office (CWI) when a permanent contract is being terminated. If the contract is being terminated with a severance package, it is recommended to verify the tax implications with a certified Dutch tax consultant.

Employment Agency Contract

A contract with a temporary agency or commercial employment agency (Uitzendbureau) is different from other types of employment contracts. In this situation, the temporary agency is the lawful employer even though a worker is providing a service to a third party. Dismissal through a temporary period may be immediate rather than a long process. A worker is also allowed to leave with little to no notice through the same period.

A temporary agency observes a Collective Labour Agreement, also known as a CAO in Dutch. This agreement governs the working conditions required in a given industry. Employment by temporary agencies is regulated by the Allocation of Workers by Intermediaries Act. Temporary agency employers are forbidden from charging temporary employees any consideration (money). Temporary employment agencies must provide a temporary worker with information about the work which will be required by the third party prior to starting work.

Freelance/ZZP-ers

An increasing number of people in the Netherlands have become self-employed.

The term self-employed is synonymous with freelancer or ‘ZZP-er’ (zelfstandig zonder personeel), which means self-employed without employees or staff. To become self-employed, it is mandatory to register the business with the Kamer van Koophandel (Dutch chamber of commerce).

  • For more about types of legal business structures in the Netherlands, including the variations on sole trading, see Business Structures

A sole trader (ZZP-er) is the only owner of the company. There are advantages to being a ZZP-er, such as related tax allowances if certain conditions are met. Profits generated by the company are allocated to the owner as income. The main risk associated with being a ZZP-er is the personal liability it assumes; no difference is made between personal and business assets. Personal or business creditors can lay claim to assets (whether those assets are of a personal or business nature).

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