The Changes in Dutch Labour Law in 2015 in a nutshell
Changes per January first, 2015:
Probation period
In the case of an employment contract of six months ore less it is not permitted to include a probation period. This means that in the case of a fixed term employment contract longer than six months, a probation period is still allowed.
Non competition clause
For a fixed term contract it will no longer be allowed to conclude a non competition clause, unless the employer has a predominant business interest and motivates this interest in writing upon agreeing to a non competition clause. Failing to give this motivation or failing to prove sufficient ground for the non competition clause will render the clause invalid.
Announcement that the fixed term contract ends
An obligation for the employer is introduced to notify the employee in writing in case the employer decides not to extent the present fixed term contract nor offers the employee a new contract. So contrary to the present law, the fixed term contract does not expires without the employer is re-quired to take action. The announcement [of ending the fixed term contract] should be made in writing no later than one month before the end of the fixed term. Failing to do so ore to do so timely will cause the employer to be liable to pay a penalty to the employee equal to the amount of one month of basic salary [including holiday allowance].
Changes per July first 2015:
Number of contracts for a defined period of time
The rules with regard to the number of contracts for a defined period of time before it causes a contract for an undefined period of time, change.
Under present law an employer may conclude up to three fixed term employment contracts, for a total of three years. Concluding a fourth contract for a defined period of time or exceeding the maximum of three years in total [intermissions of three months ore less will not be taken into account] will cause the employment contract to automatically become a contract for an undefined period of time.
Under the new law fixed term contracts will be restricted to a maximum of three over a period of two years with intervals of six months.
Legal procedures tot terminate the contract
The present two-tier system with regard to dismissals changes. The employer can no longer choose between the UWV [Employee Insurance Agency] or the cantonal judge. All dismissals for economic reasons and for long term sickness [more than two years of sickness] are decided upon by UWV. All dismissals for personal reasons will need to be routed through the cantonal judge.
Consideration after settlement agreement
Completely new is a so called “cooling off period” for termination agreements. The employee can revoke his written agreement [with termination] within fourteen days without specifying his reasons.
The employer has the obligation to inform in writing the employee of the possibility to revoke his written agreement in the termination agreement. This can be done in the termination agreement itself or within two working days after the termination agreement has been signed. If the employer does not comply with his obligation to inform the employee, the cooling of period is extended to three weeks.
If within six months after the employee has revoked his written agreement, a new termination agreement is concluded, the cooling of period does not apply anymore.
Compensation
The current formula on compensation used by the cantonal judges will be replaced by a new transition compensation. This transition compensation will be available to all employees who are dis-missed and had a contract that lasted for two years ore more. So this also includes fixed term employees, who under the present law are not entitled to any compensation.
The transition compensation is [globally] calculated as follows: for the first ten years of service the compensation consists of one third of a regular monthly salary for each full year of employment. For the years of service exceeding ten years of service, the compensation consists of half of a regular monthly salary for each full year of employment.
There is a maximum to the compensation payable of EUR 75.000 or the amount that equals one annual salary if the employee earns more than EUR 75.000 per year.
Given their [in general difficult] position on the labour market, employees over fifty with at least ten years of service [and of which the employer has more than 25 employees], will be entitled [ until January first 2020 to a higher transition compensation. These employees are entitled to a transition compensation equal to one monthly salary per full year of employment after they have reached the age of 50 but which is also capped by the maximum of EUR 75.000 or the amount that equals one annual salary if the employee earns more than EUR 75.000 per year.
No [ore lower] transition compensation may be due if the dismissal is a result of the fact that the employee is grossly to blame for the dismissal. Vice versa, in the case of seriously culpable acts or omissions of the employer, the judge may ground an additional sufferance payment which is not capped.
Appeal
In the present law there is [with some limited exceptions] no possibility for an appeal against a judgment given by the cantonal judge regarding termination of the employment agreement. This will change.
Appeal [and as a next step the so called “cassation” at the High Court] of the decision of the cantonal judge regarding the termination of the labour contract will be possible for both parties.
A new rule as well is that if a request for permission to give notice has been denied by UWV, the employer may initiate proceedings for rescission with the cantonal court. The employee may also initiate separate legal proceedings with the cantonal court after permission to give notice has been granted by UWV.
Changes per January first 2016:
As of January first 2016 through 2019 the period of unemployment benefits will be gradually reduced to a maximum of 24 months.
During the first ten years of employment, unemployment benefits will be accrued in a rate of one month for each completed year of service and after that, the rate of accrual will reduce to half a month.
Rik Wevers
Attorney-at-law
Section Employment and Dismissal
