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New labor and employment law plans presented

On 9 April 2018 the government presented the intended amendments regarding Dutch labor and employment law. The bill is called Labor market in balance (in Dutch: “Wet Arbeidsmarkt in balans”). The main proposed changes are the following.

Dismissal law

Currently, permission to dismiss an employee requires that one of the restrictive dismissal grounds is fully met. The consequence is that dismissal due to personal circumstances of employees is challenging. To obtain approval to dismiss an employee, the employer is required to make a very well-documented request.

One of the proposed changes is to make it possible to dismiss an employee on the basis of a combination of different personal circumstances. This makes it easier for employers to dismiss employees on personal circumstances. In cases of a dismissal by combining personal circumstances an employee will be entitled to claim (additional) compensation, i.e. half the transitional compensation at most.

Probationary period

At present, the maximum probationary period is one to two months. The bill proposes amendments to make a longer probationary period possible. The probationary period for employment agreements entered into for an indefinite period of time is extended from two months to five months. A new probationary period can be agreed for employees at the same employer, if clearly different skills and/or responsibilities are required from the employee.

Use of fixed-term employment agreements

Currently, the employee may be fixed-term employed for two years before the employment agreement converts into an employment agreement for an indefinite period. The bill proposes to make possible to have an employee working for three years on the basis of fixed-term agreements. Please note that a maximum of three employment agreements entered into for a certain period of time may follow each other. The fourth employment agreement is deemed to have been entered into for an indefinite period of time.

Transitional compensation

Currently, the entitlement for a compensation payment arises after 24 months of employment. In addition, accrual of the transitional compensation is more favorable for employees with a longer employment.

The bill proposes that the entitlement to a transitional compensation is established immediately upon commencement of employment. Another proposal is that the accrual of the transitional compensation is the same for every employee regardless of the length of the employment. In addition, for small employers an arrangement will be put in place to compensate the transitional compensation when they have to terminate their business due to retirement and/or illness of employees.

Payroll

Employees working for an organization on a payroll basis are entitled to the same conditions as the employees (directly) employed by that organization, except for pension entitlements.

On-call employees

The bill proposes obligations for the use of “on-call employees”. Employers are required to call employees in writing at least four days in advance. Employees do not have to show up if the call is made in a shorter period of time. If the employer terminates the call four days or less in advance, employees are entitled to the salary for the period for which the employees were called.

 


Contact:

Joost van Ladesteijn 
T: +31 88 407 0240