Labor matters

Attention required regarding a project clause in the employment contract

A project clause links the duration of an employment contract to the duration of a project. This is permissible, but case law scrutinizes such a clause strictly: if it is invalid, a temporary contract may still be considered a permanent contract....

Published on March 12, 2020 by MKBjuristen.nl
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A project clause links the duration of an employment contract to the duration of a project. This is permissible, but case law scrutinizes such a clause strictly: if it is invalid, a temporary contract may still be considered a permanent contract.

What is a project clause?

In an employment contract with a project clause, the contract ends when the project for which the employee was hired concludes. The end date is therefore not fixed on a calendar date, but depends on a future, uncertain event: the end of the project.

Why is that legally difficult?

The Netherlands has a closed dismissal system: you cannot simply agree that a contract will end. A project clause acts as a resolutive condition and is only accepted under strict conditions. For instance, the end must be objectively determinable and may not depend on your own will as an employer.

The risks of an invalid clause

If the project clause does not hold up, the employment contract does not terminate automatically. A contract intended as temporary may then continue or even be considered an employment contract for an indefinite period, resulting in wage and dismissal obligations. The consequences of an incorrectly formulated clause are therefore significant.

Leave the editing to a specialist

Because the requirements are strict and the consequences far-reaching, a project clause is typically custom-made. A specialized lawyer ensures that the condition is objective and not dependent on your will, so that the clause holds up.

Frequently Asked Questions

Can an employment contract end at the end of a project?

Under strict conditions, yes, as a resolutive condition. The end must be objectively determinable and not depend on your will.

What happens if the project clause is invalid?

In that case, the contract does not terminate automatically and can continue or be considered a permanent contract, with the associated obligations.

Isn't a regular temporary contract simpler?

Often, yes. A fixed-term contract with a fixed end date offers more certainty than a project clause. Have the best form determined.

An employment contract that holds up?

Our legal experts draft a custom employment contract , with or without a project clause. View our employment law team or schedule a free consultation .

Please note: an article provides general information, but your legal situation may turn out differently.

A contract, conflict, or legal risk must always be assessed based on the facts, documents, evidentiary position, and interests. Are you in doubt? Have your situation assessed before you act.

Legal question regarding this article?

A blog provides explanation, but your situation often requires a concrete legal choice. MKB Juristen helps entrepreneurs with contracts, terms and conditions, GDPR documents, employment documents, disputes, and customized legal solutions.

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