7 February 2020
As of 1 January 2020, new legislation has come into force to respond to modern working practices: the Balanced Labour Market Act (WAB). The Act brings in changes to Dutch employment law which are relevant for both employers and employees. The aim of this new legislation is to improve the balance between fixed and flexible employment contracts, similarly to the UK's Good Work Plan.
The period after which a succession of fixed-term employment contracts is automatically converted into a permanent employment contract has been extended from two to three years. The maximum number of fixed-term employment contracts will remain three: if there is a fourth employment contract, it will be a permanent employment contract even if the three-year period has not yet elapsed.
The formula of calculating the transition payment will change, including:
The new legislation means that agency workers are entitled to the same terms of employment as employees of the client, as well as to an “adequate” pension scheme.
To discourage temporary contracts, employers will be required to pay a lower unemployment insurance contribution for employees with a permanent contract (with specified working hours) than they will for employees with a temporary contract.
Please note that to be able to qualify for a lower unemployment insurance contribution, the Minister has stated that the employer needs to have a written addendum which:
On-call contracts are employment contracts with a deferred duty of performance, so without fixed working hours. In practice these are known as zero hour contracts or ‘min-max’ contracts.
The new legislation includes the following requirements:
The WAB introduces the possibility of combining two or more grounds for dismissal. Where a dismissal is based on combined grounds, the employer cannot reasonably be expected to continue the employment contract. Where an employee who has been dismissed on combined grounds brings a claim, the judge may grant the employee an additional payment on top of the transition fee of up to half the transition payment.
Where an employer pays an employee a transition payment at the termination of their employment contract due to long term illness, the employer will be compensated by the UWV (Uitvoeringsinstituut Werknemersverzekeringen or 'Social Security Agency').
Available in English and Dutch
by multiple authors
by multiple authors
by Roos Seesing