Employment contracts

What we do

In an employment contract, we record the agreements between the employer and the employee. It is customary for the employer to make an offer and then have the employment contract drawn up. An employment contract records, among other things, agreements regarding salary, working hours, duties, position, and company resources. Additionally, it must be determined whether a collective labor agreement (CAO) or other sector-specific terms of employment apply. It is therefore important that a corporate lawyer or attorney drafts, amends, or reviews the contract to ensure the organization is certain that it complies with legal requirements. Furthermore, we can also draft an addendum to an employment contract. An addendum is drawn up when different agreements are made between the parties during the ongoing contract period.

Do you have questions about drafting, amending, or reviewing an employment contract? Please contact us.

What is an employment contract?

Legally speaking, an employment contract exists as soon as three characteristics of Article 7:610 of the Dutch Civil Code are met: the employee performs work personally, receives wages for it, and does so within a relationship of authority relative to the employer. Whether an agreement is truly an employment contract depends on its actual execution, not on the label the parties attach to it. This distinction is important: if a so-called contract for services turns out to be an employment contract in practice, the full employment law protection package and associated obligations still apply. Our lawyers and in-house counsel rigorously assess this classification, whether it concerns an international group standardizing hundreds of contracts or the baker on the corner hiring his first employee.

What types of employment contracts are there?

Employment law recognizes various types of contracts, each with its own implications for termination, protection against dismissal, and costs. The most important variants are:

• Fixed-term employment contract – in principle terminates by operation of law on the agreed end date, but requires written notice for a duration of six months or longer.
• Employment contract for an indefinite period – the 'permanent' contract without an end date, which can only be terminated with consent, via the UWV, or via the subdistrict court.
• On-call agreement – ​​such as a zero-hours contract or minimum-maximum contract, with specific rules regarding notice periods and the offer of a fixed amount of working hours.
• Temporary employment and payroll agreements – where the legal employer differs from the actual workplace.

Which form is appropriate depends on your business strategy and the risk you are willing to take. We advise on both individual contracts and a well-considered mix; this relates directly to the theme of flexible employment relationships.

The chain rule: when does a permanent contract arise?

The chain rule of Article 7:668a of the Dutch Civil Code determines when successive temporary contracts automatically convert into an employment contract for an indefinite period. The general rule is that an employer may offer a maximum of three temporary contracts within a period of no more than three years. If this maximum is exceeded, a permanent contract arises by operation of law. The chain is only broken by an interruption of more than six months between two contracts; in the case of a shorter interval, the earlier period counts. Under certain conditions, this rule may be deviated from by collective labor agreement. It is costly for employers to make a mistake here, because an unintended permanent employment relationship activates full protection against dismissal. We monitor the chain and signal in a timely manner when a decision needs to be made.

Probation period, non-compete and non-solicitation clauses

Certain clauses in an employment contract are subject to strict legal requirements. A probationary period must be agreed upon in writing and is void pursuant to Article 7:652 of the Dutch Civil Code for contracts of six months or less; for longer temporary contracts, a maximum of one month applies, and for contracts of two years or longer and for permanent contracts, a maximum of two months. A non-compete clause and a non-solicitation clause must be recorded in writing pursuant to Article 7:653 of the Dutch Civil Code and are only valid for temporary contracts if the employer provides written justification regarding which compelling business interest legitimizes the clause. In addition, we typically include a confidentiality clause and a penalty clause. A poorly formulated clause often does not hold up in court; therefore, we formulate them in such a way that they protect your interests and remain legally sound.

Duty to provide information and transparent employment conditions

Since the Transparent and Predictable Employment Conditions Act (August 1, 2022), the employer's duty to provide information under Article 7:655 of the Dutch Civil Code has been substantially expanded. The employer must provide essential employment conditions, such as workplace, working hours, remuneration, and training rights, in a timely manner and largely in writing. Article 7:653a of the Dutch Civil Code also limits the ability to prohibit ancillary activities: a prohibition is only permitted if the employer has an objective justification for doing so. Failure to comply with these obligations can lead to liability for damages. We ensure that your model contracts and employment conditions regulations meet these current requirements.

Common mistakes in employment contracts

In practice, we see the same pitfalls recurring time and again. Written notice is often missing for temporary contracts, resulting in a notice payment becoming due. Alternatively, a probationary period or non-competition clause may be void because it does not meet the formal requirements. Overlooking the chain rule or an applicable collective labour agreement also regularly leads to undesirable permanent employment. A timely legal review of your contracts prevents these errors and often saves much higher costs later on in the event of a dispute or dismissal.

Employment contracts within our employment law

Drafting and reviewing employment contracts is an integral part of our broader Employment Law. Because our mixed teams of lawyers and in-house counsel oversee both the contractual basis and the consequences thereof in the event of illness, reorganization, or dismissal, we lay the foundation in the contract itself for a smooth process later on. Whether you are an international group with hundreds of employees or an entrepreneur hiring your first staff member, we translate your business strategy into contracts that are legally sound and work in practice.

Frequently asked questions about employment contracts

Must an employment contract be recorded in writing?

An employment contract can also be concluded orally, but many provisions, such as a probationary period, non-compete clause, or non-solicitation clause, are only valid if agreed upon in writing. The duty to provide information under Article 7:655 of the Dutch Civil Code also requires written provision. A written contract is therefore always advisable.

How many temporary contracts am I allowed to offer?

Pursuant to the chain rule (Article 7:668a of the Dutch Civil Code), a maximum of three temporary contracts within a maximum of three years is permitted. Thereafter, or after the term has been exceeded, a permanent contract arises by operation of law. This may be deviated from by collective labour agreement.

Can I modify an existing employment contract?

A unilateral change is usually not possible without further ado. Changes are typically recorded by mutual agreement in an addendum to the existing contract. We draft that addendum and assess whether the employee can be held to a change.