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Employment and labor law in the Netherlands

The Netherlands has an extensive body of labor law designed to safeguard the rights and well-being of all employees. If employing staff in the Netherlands, it’s important to be aware of the local laws and regulations, and that you are fully informed of not only your employees’ rights, but also your own. Here are some of the main points to take into account as an employer.

Salaries and pensions

The Netherlands has a minimum wage defined by the Minimum Wage Act. This is age-dependent and increases as the employee gets older. Employees are also entitled to a holiday allowance in May or June (at least 8% of their annual salary). While a pension is not mandatory in most sectors, it’s customary to offer a pension scheme in the Netherlands, particularly as Dutch state pensions have decreased in recent years.

Collective Labor Agreements

Collective Labor Agreements (CLAs) are only required for companies within certain sectors, or if the company is part of an employer organisation that has signed the CLA. These agreements can be mixed, containing provisions that may or may not be mandatory. Although you can’t deviate from a standard CLA, it may be possible to deviate from some provisions if it benefits the employee. Companies may be allowed to offer their own employment conditions, provided they meet the standards of the sector conditions.

Works council

Companies with 50 or more employees must appoint a works council that allows employees to exercise the right of approval and advice regarding company policy. The union can also monitor employees’ rights, for example during a collective redundancy or a large-scale reorganisation.

Sick leave and other forms of absence

Employment conditions must comply with the Arbowet (Working Conditions Act). If an employee is absent due to illness, the employer must meet the employee’s salary payments for up to two years. Under Dutch law, employees also have the right of leave (including parental leave, dependent care leave, emergency leave and special leave).

Making employees redundant

There are generally three options to lay off an employee who is under permanent contract:

  1. A mutual agreement between the employer and employee to terminate the contract. This is by far the most common (and advisable) approach.
  2. Obtain a court decision to terminate the contract. This usually requires extensive documentation proving that the employee or their behaviour gives you no other option. It can be difficult to get a favourable ruling, so this option is rarely taken.
  3. Dismissal permit from the UWV (the employee insurance agency in the Netherlands). An application for this permit is only possible after a sick leave period of 104 weeks, or if the company is at risk of bankruptcy.

How can we help?

It’s always a good idea to talk with an experienced adviser on all matters related to hiring and firing. At Bol International, our HR and employment law specialists help international companies ensure they’re complying with Dutch law. Contact a member of our team today to see how we can help you.