Drafting an employment contract: mandatory content and clauses

Drafting an employment contract begins with the fixed core: the names of the parties, the position, the start date, the salary, the duration of employment, and whether the contract is for a fixed or indefinite period. Surrounding this are the clauses that cover your situation—probationary period, notice period, and, where necessary, a non-competition or non-solicitation clause. Moreover, since the Transparent and Predictable Employment Conditions Act (2022), you are required to record an extensive set of employment conditions in writing. A complete, up-to-date contract prevents disputes in the event of renewal, illness, and dismissal.

The short answer

1. Fixed data: parties, position, location, start date, contract duration.
2. Wages and hours: gross wages, holiday allowance, working hours and working times.
3. Probation period and notice period: within legal limits.
4. Holiday, illness, pension: vacation days, continued payment of wages during illness, pension scheme.
5. Clauses: non-compete, non-solicitation, confidentiality, and penalty clauses where necessary.
6. Signature: by both parties, in duplicate or digitally.

The mandatory content

Since 2022, employers have been required to provide a large number of employment conditions in writing. The simplest way to comply with this is to include them all in the employment contract itself:

• Name and place of residence of employer and employee.
• Job title and a brief description of the duties.
• Start date and, for a fixed term, the end date or duration.
• Salary, payment date, holiday allowance and any supplements.
• Weekly working hours and working times.
• Number of vacation days and the notice period.
• Whether a pension scheme applies and which collective labour agreement is applicable.
• The training offer and whether it is free of charge.

Wages, hours and allowances

Specify the gross salary, not the net. State whether it is paid monthly or every four weeks and whether holiday allowance (minimum 8%) is included or paid separately. Be precise about the working hours: a fixed number of hours prevents disputes regarding an on-call arrangement. If you work variable hours, additional rules regarding on-call contracts apply, and you must make an offer for fixed hours after one year.

Also include what happens in the event of overtime, whether the wage is an all-in rate, and whether expenses are reimbursed. Lack of clarity on these matters often leads to additional tax assessments or wage garnishments.

Probation period and notice period

Two provisions with strict legal limits:

• Probation period. Prohibited for contracts shorter than six months. A maximum of one month for contracts of six months to two years, a maximum of two months for two years or longer and for indefinite periods. A probation period that is too long or not in writing is void — you are then left without a probation period.
• Notice period. For the employee, the standard is one month. For the employer, it depends on the duration of employment: from one month (less than five years) to four months (fifteen years or longer). You may extend the employee's notice period, but the employer's must be double that.

Non-compete, non-solicitation, and confidentiality clauses

These clauses protect the company, but are subject to strict requirements:

• Non-compete clause. Prohibits the employee from working for a competitor or starting a competing business after the contract ends. In a temporary contract, only valid with a written justification of a compelling business interest.
• Non-solicitation clause. Prohibits soliciting clients and business relations. Often more defensible than a broad non-competition clause.
• Confidentiality clause. Protects business-sensitive information, even after the termination of employment.
• Penalty clause. Links a fine to a violation; additional protective rules apply to employees (Art. 7:650 BW).

An overly broad non-compete clause is often moderated or struck down by the court. Limit it in terms of duration, scope, and function to what is truly necessary.

Sign and save

Have the contract signed by both parties before the first working day. A probationary period or non-compete clause is only valid if the signature is present before the start of employment. A digital signature is legally valid, provided it is clear who signed and the document can no longer be altered. Keep a signed copy in the personnel file and give the employee a copy.

Example: An SME lets a new salesperson start on their first day and sends the contract “later.” The salesperson leaves after two months to join a competitor. The non-compete clause is then unenforceable because it was not signed before commencement.

Honest recommendation

For a standard employment contract with standard terms, an up-to-date model that meets 2022 requirements will suffice — you do not need a lawyer for that. However, do have custom work drawn up as soon as a significant interest is at stake: a strict non-compete or non-solicitation clause, a bonus scheme, an on-call or management contract, or a position involving transferring sensitive business knowledge. It is precisely these clauses that fail most often in court if they are not properly substantiated.

Delve deeper into exactly what an employment contract is, review the key provisions using an example, or have an employment contract drafted.

Frequently Asked Questions