Dutch Labour Law legislation

Author:Ms Anita De Jong, Maria Benbrahim and Liza Krijgsheld
Profession:Hogan Lovells

We are approaching the end of the year. From 1 January 2020 onwards, new employment legislation will enter into force in the Netherlands. Please find below an overview of the main changes in the Dutch Balanced Labour Market Act (“WAB”). The main purpose of the WAB is making it more attractive for employers to hire employees on a permanent basis.

Fixed term employment agreements will become more expensive

Before 1 January 2020 only employees who had an employment relationship with the employer for at least 24 months were eligible to receive a minimum severance (the transition compensation), if the conditions are met. From 1 January 2020, employees will be entitled to such transition compensation as of the start of the employment agreement. The premiums for unemployment benefits to be paid by the employer in respect of fixed-term employees will be increased. Permanent employment agreements will become less expensive

The current higher transition compensation for employees who have been employed for more than ten years and employees who are older than 50 years will in principle no longer apply. The transition compensation will be amended to one third of a monthly fixed salary per pro rata year of service. The premiums for unemployment benefits in respect of employees working on a permanent contract will be reduced. Chain scheme for successive fixed- term employment

The chain scheme for successive fixed-term employment agreements will be broadened. The total duration of successive fixed-term contracts, after which the employment agreement will be converted to an employment agreement for an indefinite time, will be increased from 2 years to 3 years. The maximum number of 3 successive fixed- term employment agreements will remain the same, as well as the minimum interval between two employment agreements of 6 months for a new chain to start.

An additional reasonable ground for termination by court's decision

The WAB envisages to make it easier to fulfill a reasonable ground for dismissal by court's decision by introducing the 'accumulation ground'. There are currently 8 reasonable grounds and at least one ground has to be fully substantiated. The WAB will make it possible to terminate the employment agreement on the basis of two or more incomplete reasonable personal termination grounds (for instance a combination of a lack of performance and a disturbed employment relationship). Please note that the court can award the employee an...

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