Significant changes to Dutch Labour Law were made this year to strengthen the position of temporary employees. The intention of the Work and Securities Act was to give more rights to temporary employees and a faster route to an indefinite contract.
As we near the end of the year, these changes are starting to have a real impact on the way companies hire and dismiss employees. For companies that are creating their staffing plan for 2016, below are highlights of the changes implemented, specific to temporary personnel, and a short-list of things to keep top of mind.
Number of fixed-term contracts
Hiring the same employee for more than two years on consecutive fixed-term contracts is no longer permitted. After two years of fixed-term contracts, or when a 3rd contract is offered, the presented new contract must be permanent, unless there has been a gap of 6 months in contracts offered.
Fixed-term contracts of 6 months or less issued after 1st January are prohibited from having a trial-period. For fixed-term contracts of more than 6 months, a trial-period of 1 month is permitted.
From 1 January, a non-competition clause in fixed-term contracts is prohibited, unless the contract specifies the necessity of such a clause in light of severe company interests.
Notification to end or extend fixed-term contracts
One month before the termination of a fixed-term contract (of six months or longer), an employer must notify the employee in writing whether the employment agreement will be extended or not.
This compensation replaces the current severance payment in case an employment agreement is terminated by the Employer after 24 months of employment. For every year of service less than 10 years, the employee receives one third of his monthly salary.
So what does this mean for Hiring Managers?
Things have changed.
Fixed-term contracts should have been revised and adapted to the changes in legislation. Check with your HR or legal advisor to ensure your employment agreements are up to date and you're aware of your company's approach to short and long term hiring.
Look at the entire relationship and chain of contracts.
If you were introduced to a Talent via a recruitment agency for 3 months, and then extend a direct contract to the Talent for the same role, you inherit the chain of contracts. This means you have a limited time frame before a permanent contract comes into effect.
Keep track of the history.
Two years can fly by and before you know it, it could already be time for an indefinite contract to come into play, or to say goodbye. Employees engaged for two years or more are entitled to a transition fee if you are not continuing the contract, and require one month’s notice to notify the end of the contract. Creating agenda reminders when issuing contracts will ensure you have plenty of time to issue notification letters.
Think it through.
If your intention is for a long and happy relationship with your new hire, then be realistic in the first contract. In some cases, a 6 month contract is enough to assess suitability and manage risks, in others, 12 months.
Aquent at it's core, helps companies adapt and thrive to changing situations. Reach out to the team in Amsterdam for advice on navigating the waters.
This article outlines components of the changes to Dutch Labour Law and is in no way a comprehensive account. A more comprehensive guide to the changes can be viewed in English here and viewed in Dutch here. Always seek expert legal advice when reviewing your Employment Agreements.