Employment & Labour Laws And Regulations – Redundancy/Layoff – Netherlands

1.1 What are the main sources of employment
law?

In the Netherlands, sources of employment law primarily include
the Dutch Constitution, (civil) law, numerous Acts, jurisprudence,
labour regulations, collective labour law and collective labour
agreements. Thanks to the court of labour disputes, case law has
been a pertinent source of Dutch employment law. Furthermore, the
European Union has had a significant supplementing role due to
binding legislation, complemented by the jurisdiction of the
European Court of Justice.

1.2 What types of worker are protected by employment
law? How are different types of worker distinguished?

Dutch employment law regulates the legal relationship between
employees and employers. It is therefore exclusively applicable to
employees with an employment contract.

In cases such as incidental labour for changing principals
(freelance work), one is, in principal, not covered by employee
protective laws. Furthermore, workers appointed as civil servants
also do not enjoy the rights given under employment law.

Under Dutch employment law, blue-collar and white-collar
employees enjoy equal protection.

1.3 Do contracts of employment have to be in writing? If
not, do employees have to be provided with specific information in
writing?

In principle, Dutch employment contracts are not required to be
in writing and can thus also be concluded verbally.

However, the employer is legally obliged to inform the employee
on the essential terms within one month after entry into service.
This information must be given in writing and includes the function
of the employee, the duration of the contract (fixed or indefinite)
and general provisions on social security.

Evidential value is, however, attached directly to the statement
when the employee, at the employer’s request, signs and returns
the statement, provided that the employee considers it to be
correct. The employer’s failure to make the statement can later
be used against the employer in proceedings concerning what was
agreed between the parties.

1.4 Are any terms implied into contracts of
employment?

Besides the typical provisions that all contracts of employment
shall contain, Dutch civil law obliges the parties to comply with
behaviour that is to be expected from a good employee and
employer.

An employer shall equally treat all work that was performed in
equal circumstances. Furthermore, an employer shall generally
enable and safeguard an environment for his employees to execute
the labour that was agreed on. The obligations that rest on
employees include being bound by discretion and loyalty towards the
employer, following instructions/behavioural codes, and,
incidentally, working overtime.

1.5 Are any minimum employment terms and conditions set
down by law that employers have to observe?

Yes. The minimum employment terms and conditions which are
mandatory to follow, include, but are not limited to:

1. a minimum age of employment (starting from 13 years old with
   limitations; from 18 years old – no limitations);




2. a minimum wage (depending on the age of an employee; from 21
   and older – €1.934,40 gross/month);




3. a maximum of work hours per week and day (12/day,
   60/week);




4. a minimum rest period after work (11 consecutive hours);




5. pregnancy and maternity leave (up to 20 weeks);




6. paternity/partner leave (up to six weeks: first week to be used
   within a month after birth; the subsequent five weeks to be used
   within six months after birth). Since 2 August 2022, partially paid
   parental leave is available (the first nine weeks of parental leave
   will be partially paid);




7. sick leave (up to two years, 70% of the wage is paid);




8. short-term care leave (up to two times of contractual working
   hours per week within 12 months);




9. long-term care leave (up to half the number of hours the
   employee works in 12 weeks);




10. emergency leave (varies);




11. notice of termination (one month in the first five years of
    employment, after that it is more);




12. paid holiday entitlement (four times the weekly number of
    days/hours per year);




13. transitional allowance (due at termination unless the employee
    terminates the employment unilaterally);




14. when an employer is required by law or the collective labour
    agreement to provide certain training to the employee, the employer
    must pay for this and the training must be possible during working
    hours; and




15. an employer may also not prevent an employee from working
    outside the work schedule for another employer, unless there is an
    objective justification for doing so.

1.6 To what extent are terms and conditions of
employment agreed through collective bargaining? Does bargaining
usually take place at company or industry level?

The vast majority of employees in the Netherlands enjoy pay and
conditions that stem from collective bargaining. The Dutch ministry
of labour registers collective agreements. Traditionally, the
negotiators follow what has been agreed on national level,
including the recommendations. Agreements at industry level account
for the vast majority of collective bargaining. However, big
corporates have their employees covered by company collective
agreements.

Terms and conditions of employment agreed through collective
bargaining are prohibited to deviate from coercive law, e.g., the
Civil Code and several Acts.

1.7 Can employers require employees to split their
working time between home and the workplace on a hybrid basis and
if so do they need to change employees’ terms and conditions of
employment?

According to the Working Conditions Act, an employer must
include every workplace in the working conditions policy, including
the home workplace. However, the employer retains his right to
instruction: the right to determine how work is performed and, most
importantly, where.

A “work from home contract” is an addition to the
employment contract. If the employee regularly works from home, it
is wise to make a “work from home agreement”. It lays
down the most important agreements about working from home.

Moreover, the employer has an obligation to set up a proper home
office.

When an employer is established in another country than
the country of residence of the employee

Employees who live in a country other than where the employer is
established and work from home are almost always liable to pay tax
on (part of) the salary in the country of residence. In addition,
the social security position of employees normally changes from 25%
working in the country of residence to that country.

Dutch employers in such situations have to pay social security
contributions and possibly tax on the employee’s salary
according to the legislation of the employee’s country of
residence. The employer is then usually required to keep local
payroll records (in addition to Dutch payroll records).

Additionally, the labour law of the employee’s country of
residence may become applicable to the employment relationship if
that country becomes the employee’s “usual country of
work”. Often, the employer is not familiar with foreign labour
law, while it may differ considerably from Dutch law.

Tax consequences

Depending on the powers and activities performed by the employee
and the qualification of the ‘home office’ in the country
of residence, there may be a permanent establishment for tax
purposes. This triggers not only a local tax return obligation for
the employer, but possibly also local taxation on the profits. The
part of the profit on which the company pays tax varies from one
situation to another and can lead to discussions with the tax
authorities.

Tax consequences must be taken into consideration when agreeing
to hybrid working/working from home if the employee is living in
another country. In case of a tax treaty between the country of
residence and the country of work, the tax treaty determines which
country has the right of taxation on (part of) the income.

1.8 Do employees have a right to work remotely, either
from home or elsewhere?

The employer may, in agreement with his/her employee, allow the
employee to work partly or fully from home or from another
workplace. To do so, the employee must first submit a written
request which needs to meet a number of certain conditions.

The legal requirements for working from home or from another
workplace are:

• the employee must work at a company with at least 10
  employees;




• the employee must be employed for at least six months; and




• the employee must submit his request in writing no later than
  two months before the desired effective date.

The request must state: the desired effective date and the
desired workplace.

The employer must respond to the employee’s request
no later than one month before the effective date.
If he does not, the employee may work as stated in his request.

The employer can refuse the request (he must do so in writing).
He, however, must have a good reason for refusing the request.

For example:

• The place where the employee wants to work is not safe or
  suitable for the work.




• Working from another place causes problems with the work
  schedule.




• The work cannot be done elsewhere.

If the employer refuses the employee’s request, the employee
has to wait one year before he can submit a new request.

The legal regulation for working from home does not apply to
companies with fewer than 10 employees. However, the employee can
ask his employer if he/she is allowed to work from home. Working
from home must, however, fit in with the employee’s work. The
employer may still refuse the request.

2.1 What are the rules relating to trade union
recognition?

The Dutch Constitution guarantees the right to freedom of
association and assembly. The only condition imposed upon trade
unions to take part in collective bargaining agreements is legal
recognition and the aim constituting the promotion of their
members’ interests and the closing of collective bargaining
agreements. Moreover, the right to join a trade union and conclude
collective bargaining agreements is laid down in various
conventions of international organisations, such as the
International Labour Organization.

2.2 What rights do trade unions have?

First and foremost, trade unions in the Netherlands are expected
to protect and safeguard the interest of their members with regard
to wage development, social security, employment protection and
safe working conditions, etc.

One of the most efficient tools that trade unions have are
collective bargaining agreements and their say in the establishing
of such.

Furthermore, termination cases concerning more than 20 employees
within the same company (collective termination) will only be
approved by the court when a social plan is formulated in
cooperation with a trade union.

Dutch trade unions have yearly negotiations with cabinet members
and employers’ organisations concerning the development of
wages and social security.

Lastly, members of Dutch trade unions have a seat on the
Economic and Social Council.

2.3 Are there any rules governing a trade union’s
right to take industrial action?

Collective bargaining agreements commonly contain a clause
obligating a trade union to enter into consultation and provide its
opponent with its demands before turning to action. The right to
strike in the Netherlands is based on the European Social Charter
(ESC) and shall be utilised as the “ultimum
remedium” and thus be assessed on the principles of
proportionality and subsidiarity. Additionally, the strike requires
a timely notice. Trade unions in the Netherlands enjoy these rights
and have the competence to initiate and organise a strike on behalf
of the employees.

The Dutch High Council has ruled – in accordance with the
ESC – that the right to strike can only be restricted when
this is necessary in a democratic society for the protection of the
rights and freedoms of others or for the protection of public
interest, national security, public health or morals.

2.4 Are employers required to set up works councils? If
so, what are the main rights and responsibilities of such bodies?
How are works council representatives
chosen/appointed?

Companies and organisations with 50 employees or more are
required to have works councils. Those with more than 10 but fewer
than 50 employees are obligated to have staff representatives when
a majority of the employees wish so. To exert involvement in the
course of companies, works councils have been given several rights
that include the right of consultation on relevant decisions, the
right of assent on human resources, the right to initiative on
internal matters and the right to speak at the shareholders’
meeting.

The works council is responsible for organising elections for
representatives and has the option to delegate this power to an
electoral commission. The works council regulation contains the
electoral system, a voting procedure, a list of employees that are
running and the persons entitled to vote.

2.5 In what circumstances will a works council have
co-determination rights, so that an employer is unable to proceed
until it has obtained works council agreement to
proposals?

Works councils have co-determination rights with regard to
determining, amending or withdrawing staff regulation. This
includes the increase or reduction of working hours, social welfare
matters (pension systems), labour conditions, holiday entitlements
and sick leave.

However, the works councils’ co-determination rights are not
applicable insofar as the concerned matter has been regulated in
collective bargaining agreements.

Lastly, when the employer has not received the works
councils’ consent, the cantonal judge has the right to
nevertheless approve the decision.

2.6 How do the rights of trade unions and works councils
interact?

While both have their respective competences, there is some
common ground between Dutch trade unions and works councils.

Trade unions are a negotiating party at the foundation of a
works council. The first task of the works council is setting up
the Rules of Procedure. Once this has been concluded, the trade
union must be offered the opportunity to be informed and heard with
regard to the Rules of Procedure. This means that trade unions can
make remarks and give suggestions.

Furthermore, the trade union must be provided the opportunity to
nominate candidates at works council elections. These candidates
may be a member of a trade union; however, this is not
required.

2.7 Are employees entitled to representation at board
level?

Companies with more than 50 employees are required to establish
a works council. The works council ensures the representation of
employees at board level and has several competences such as the
right to provide advice on significant decisions and measures and
the right of assent on employment condition amendments.

Companies with 10 to 50 employees are required to establish a
works council or staff representation when the majority of
employees would demand so. When the employees of such a company
have not established either, the employer is obligated to initiate
staff meetings. The staff meeting has the right to advice on
several matters. Please see question 2.4 above.

3.1 Are employees protected against discrimination? If
so, on what grounds is discrimination prohibited?

The Act on Equal Treatment is one of the main sources for the
enforcement of discrimination prohibitions and equal treatment in
the Netherlands. This Act prohibits discrimination on grounds such
as race, religion and belief, political affiliations, gender,
pregnancy, sexual orientation, nationality and civil/marital
status.

The Dutch Civil Act obligates employers to ensure a working
environment free of discrimination. In principal, distinctions
based on the aforementioned grounds are prohibited and would only
be permitted when underlined by an objective justification.

3.2 What types of discrimination are unlawful and in
what circumstances?

Dutch law differentiates between direct and indirect
distinctions.

Direct distinction is based on the “suspected” trait
(such as gender, religion, race). Discrimination by employers by
direct distinction is always unlawful, unless there is an objective
justification or the law which prescribes otherwise.

Indirect distinctions are based on a trait that is theoretically
neutral but would practically coincide with a certain population
group. Indirect distinctions are lawful when based on an objective
justification. The distinction would need to serve a legitimate
aim, reached by proportionate and necessary measures.

3.3 Are there any special rules relating to sexual
harassment (such as mandatory training requirements)?

Employers are obliged – under the Working Conditions Act
– to implement a working conditions policy to ensure that
sexual harassment is prevented or, if that is not possible, at
least limited as much as possible. To be able to do this properly,
organisations are required to map all occupational health risks,
including sexual harassment, in the risk inventory and evaluation
(RI&E). The action plan, which is based on the RI&E, must
include what the company is going to do to prevent the identified
risks. The employees concerned must be informed about the risks and
measures taken by the company. The employer must demonstrably carry
out all these actions. A general prohibition of sexual harassment
is included in the Dutch Civil Code. This is understood to mean
“any form of verbal, non-verbal or physical behaviour with a
sexual connotation that has the purpose or effect of compromising
the dignity of the person, in particular when a threatening,
hostile, abusive, degrading or hurting situation becomes
created”. On that basis, it is possible for a victim to claim
damages from the offender through the courts or to enforce other
measures on the employer.

3.4 Are there any defences to a discrimination
claim?

As mentioned before, the defence to a discrimination claim must
be an objective justification. The distinction must meet four
criteria: the aim must be legitimate; the means to reach
the aim must be appropriate; the means are
proportional to the aim; and the measure taken is
necessary (a less invasive distinction is impossible).

When the distinction is objectively justified, a Dutch court or
the Netherlands Institute for Human Rights will rule that a
prohibited distinction is not in question.

3.5 How do employees enforce their discrimination
rights? Can employers settle claims before or after they are
initiated?

A complaint regarding discrimination can be filed at the
Netherlands Institute for Human Rights. The complaints procedure is
partially in writing and verbal. The complaint must be filed in
writing. Once the Institute has collected enough information and
heard the (candidate) employer, the formal inquiry (hearing) will
take place. Within eight weeks after the hearing, the Institute for
Human Rights will render a verdict. While the verdict is not
legally binding, employers must follow the judgment in a vast
majority of the cases.

For a legally binding judgment, the civil court needs to be
involved. The civil judge is obligated to consider the ruling of
the Institute for Human Rights. The claim usually consists of
compensation for material and immaterial damage.

The court will often attempt to move both parties towards a
settlement. When this fails, the court will give their verdict in
writing after approximately four weeks. Both parties have the right
to appeal against the decision of the court.

3.6 What remedies are available to employees in
successful discrimination claims?

The most common remedy that is available to employees is
compensation for material as well as immaterial damage as a
consequence of the discrimination. Furthermore, the employee in
question has the right to reintegration in the organisation or in
their function under the same working conditions.

3.7 Do “atypical” workers (such as those
working part-time, on a fixed-term contract or as a temporary
agency worker) have any additional protection?

All employees – even with a fixed-term contract –
are generally provided with the same protection and enjoy equal
rights. However, employees such as those who are pregnant, a member
of a works council or an individual on sick leave enjoy additional
protection with regard to termination of contracts. Furthermore,
employees with an open-ended contract can count on added protection
when exchanging their contract for a fixed-term contract.

It is compulsory to make an offer to on-call workers who have
worked on an on-call basis for 12 months. This offer must be based
on the average number of hours worked in the previous 12 months.
The on-call worker then has one month to accept this offer. The
Collective Labour Act SZW 2021 stipulates when this fixed scope of
work must take effect if the on-call worker accepts this: at the
latest, on the first day after two months have elapsed after the 12
months for which the average working hours have been
calculated.

Adequate pension scheme for payroll
employees

As of January 1, 2021, payroll employees are entitled to the
same basic pension scheme as staff in equivalent positions or to an
alternative that meets a number of requirements. This means, in a
number of cases, that the payroll company will be obliged to set up
a pension scheme as from 2021. The Balanced Labour Market Act
(Wet arbeidsmarkt in balans – WAB) has appointed a
number of minimum conditions for this:

• No waiting period or threshold period before pension accrual
  starts.




• A provision for both a retirement pension and a survivor’s
  pension.




• The collective employer’s contribution amounts to at least
  15.8% of the pension base sum of the payroll employees who are
  entitled to a pension scheme.




• The costs of the pension scheme are borne by the payroll
  company but can be passed on to the hirer.

3.8 Are there any specific rules or requirements in
relation to whistleblowing/employees who raise concerns about
corporate malpractice?

The Act requires employers with 50 employees or more to draw up
a procedure for reporting (a suspicion of) an abuse to his
employer. The employer investigates the abuse and, if necessary,
takes measures. The law stipulates that at least the following must
be included in the whistle-blower procedure: (i) how the internal
report is handled; (ii) when there is an abuse (based on the legal
definition); (iii) to which officer an internal report must be
made; (iv) that the report is handled confidentially if the
reporter indicates that he or she wants it to be treated as
confidential; and (v) that the employee can trust a consultant to
seek advice. The employer is also obliged to inform all employees
in writing or digitally about the points mentioned above, the
circumstances under which they can make a report externally, and
about the legal protection in the event of a report. Also note that
the works council has the right of consent to the internal
reporting scheme. It is advisable to involve the works council as
early as possible in the realisation of the scheme.

4.1 How long does maternity leave last?

Maternity leave prior to the predicted due date in the
Netherlands lasts six weeks. Following childbirth, maternity leave
lasts 10 weeks. Thus, the right to paid maternity leave makes up
for a total of 16 weeks.

4.2 What rights, including rights to pay and benefits,
does a woman have during maternity leave?

As an employee, one has the right to maternity benefits while on
leave. Self-employed pregnant women can apply for special benefits
at the Institute for Employee Benefit Schemes. Furthermore, an
employer is not permitted to terminate the contract of a pregnant
woman. This includes the period of 16 weeks during and an
additional six weeks after the maternity leave.

4.3 What rights does a woman have upon her return to
work from maternity leave?

Up until six months after childbirth, the woman has the right to
extended breaks, appropriate resting areas and no obligation for
overwork or nightshifts.

When the work has an unacceptable high safety risk for the
pregnant woman, the employer is obligated to offer different
temporary work. Whenever this appears impossible, the woman has the
right to sickness benefits.

Furthermore, as of August 2022, the Dutch Government has
introduced nine weeks of partially paid parental leave. The aim of
this extension is to give both partners the opportunity to spend
time with their child in the first year after birth. In addition,
the leave can ensure a more equal division of work and care tasks
between parents. During these nine weeks, parents are entitled to
benefits of up to 50% of the maximum daily wage.

4.4 Do fathers have the right to take paternity
leave?

In January 2019, a new Act granted fathers/partners in the
Netherlands five paid days of “childbirth leave” that
ought to be used within the first four weeks after the childbirth.
Besides these five days, from July 1, 2020 onwards, the Act also
ensures an additional five weeks of partner leave to be utilised in
the first six months after childbirth. During these five weeks,
partners have the right to a benefit amounting to 70% of the wage.
Please see question 4.3 above where partially paid parental leave
is discussed.

4.5 Are there any other parental leave rights that
employers have to observe?

The right to parental leave in the Netherlands consists of 26
times the number of hours the parent works a week, comprising 1,040
hours within a working week of 40 hours. The right to parental
leave can only be enjoyed when the child is under the age of eight
years old. See questions 4.3 and 4.4 above where partially paid
parental leave is discussed.

The person entitled to parental leave has the right to keep
their own position with the working hours as stated in the
employment contract. In principle, the parent is free to decide how
and when to take their leave of absence. The employer must respect
the distribution of hours the employee wishes to have, save for
cases where this would severely harm the company.

4.6 Are employees entitled to work flexibly if they have
responsibility for caring for dependants?

The Work and Care Act allows employees to request from their
employer a temporary adjustment of the working hours. After the
leave of absence, the employee is entitled to work on adjusted
hours for a period of one year unless another period has been
agreed on.

Furthermore, the Act on Flexible Work – only applicable to
employers with more than 10 employees – ensures employees who
have been in service for over six months – under certain
formalities – the right to work part-time. An employer can
only decline the request to work part-time in the case of
overriding interests that could negatively affect the company on
financial, safety and/or organisational grounds.

5.1 On a business sale (either a share sale or asset
transfer) do employees automatically transfer to the
buyer?

In the event of a transfer of the undertaking or when an
autonomous part of the business gets transitioned to a buyer, the
employee gets automatically transferred. The employee’s legal
position towards the transferor remains similar towards the
buyer.

The undertaking is transferred when the buyer is considered to
be the one who ensures the continuation of the business. Moreover,
there must be an economical entity that has its
“identity” maintained. An economical entity shall be seen
as a set of organised resources, intended to execute a (primary)
economic activity. Whether the identity is maintained depends on
several criteria: the nature of the concerned business; the
transition of fixed assets and compliant registers; the duration of
a potential disruption; and lastly, the similarities between the
business activities before and after transfer. When ruling whether
the identity has been maintained, Dutch courts are not obliged to
base their judgment merely on the aforementioned criteria.

When only shares are subject to the transaction, the employee
does not automatically transfer to the buyer but stays employed by
the same legal entity. This is equally applicable to share
mergers.

5.2 What employee rights transfer on a business sale?
How does a business sale affect collective agreements?

In the event of a business transfer, the rights and obligations
of an employee arising from the employment contract will transfer
from the transferor to the buyer. Consequently, not only do
employees keep their position, but also the wage, overtime
compensation, travel allowance, bonuses and secondary labour
conditions as agreed upon in the contract are safeguarded.

With regard to collective agreements, the existing one stays
applicable. Depending on the collective agreement that was
applicable at the business of a buyer, this could result in
different collective agreements that are applied within a business.
Economical, technical or organisational interests can form a ground
to permit unilateral amendments to collective agreements.

5.3 Are there any information and consultation rights on
a business sale? How long does the process typically take and what
are the sanctions for failing to inform and consult?

Based on the law, the works council has a right of advice with
respect to, among other things, intended resolutions to take over
or merge. The employer must inform the works council about the
possible consequences this decision will have for the employees.
The employer has the obligation to submit the proposed decision to
the council in writing and to request advice at such a time that
the advice can have a substantial influence on the decision to be
taken.

If the decision taken by the employer is not in accordance with
the advice of the works council, the council can go to court. This
also includes the case in which the works council was not consulted
by the employer where it should have been consulted.

The works council can also go to court if facts or
circumstances, had they been known to the works council at the time
of issuing the advice, would have caused the council not to issue
that advice as it was issued.

5.4 Can employees be dismissed in connection with a
business sale?

Business sales do not form a ground for the transferor or the
buyer to dismiss employees. The transfer brings the employees to
the service of the buyer by operation of law.

Transfer of an undertaking is a delicate area, which needs
proper attention by a trusted employment lawyer.

5.5 Are employers free to change terms and conditions of
employment in connection with a business sale?

In the event of a business sale, employees keep their rights and
obligations. Generally, employers aim to treat their existing and
transferred employees equally. This is permitted, as long as the
transferred employees do not regress in terms of employment
conditions. Therefore, the employees are guaranteed to at least
have their current wage, bonuses, leave entitlements, labour years,
etc., secured.

The conditions can be changed to their benefit, but a
“comparison of entire packages” before and after, which
can lead to worse conditions on certain topics and the improvement
of others, is not permitted.

6.1 Do employees have to be given notice of termination
of their employment? How is the notice period
determined?

An employer who wishes to terminate his employees’ contract
must take notice of termination into account. The notice of
termination must be given in writing and starts once the
notification has reached the recipient.

Collective bargaining agreements contain provisions on the
notice of termination. When no period has been laid down, the legal
term is applicable. The longer an employee has been in service, the
longer the notice of termination. This varies from a notice period
of one to four months.

The notice period can be extended by agreement between employee
and employer, and concluded in writing. Shorter notice periods are
only permitted when this is laid down in a collective bargaining
agreement.

Be aware that a termination notice, even if containing the
correct notice period, does not terminate the employment. Very
strict procedural rules must be observed.

6.2 Can employers require employees to serve a period of
“garden leave” during their notice period when the
employee remains employed but does not have to attend for
work?

Employers cannot unilaterally require employees to serve a
period of garden leave. The employee needs to explicitly agree upon
the leave, including additional arrangements concerning costs and
compensations.

6.3 What protection do employees have against dismissal?
In what circumstances is an employee treated as being dismissed? Is
consent from a third party required before an employer can
dismiss?

Besides the legal notice of termination, certain categories of
employees can be entitled to protection against dismissal and
termination benefits. Furthermore, Dutch law knows a general
prohibition on termination of the employment contract. This
prohibition forces an employer to obtain written consent by an
employee or the Employee Insurance Agency (UWV). With the UWV’s
consent, the employer has received a permit for dismissal which
enables the employment contract to be terminated.

The UWV or the cantonal court will adopt a “preventive
test” to assess whether there is a reasonable cause for the
dismissal or a possibility for reinstatement. Grounds for dismissal
could constitute structural incapacity to work, prudential reasons,
labour conflicts or inadequate performance.

6.4 Are there any categories of employees who enjoy
special protection against dismissal?

Several categories of employees enjoy special protection against
dismissal under Dutch law.

During sickness and pregnancy (and maternity leave), an employee
is protected against dismissal. An employee who has a seat on a
works council is also protected against dismissal. As discussed in
section 3 above, an employment contract cannot be terminated when
influenced by discriminatory distinctions.

6.5 When will an employer be entitled to dismiss for: 1)
reasons related to the individual employee; or 2) business related
reasons? Are employees entitled to compensation on dismissal and if
so, how is compensation calculated?

The Dutch Civil Code prescribes that employers can dismiss
employees when there is a reasonable ground and reinstatement of
the employee – albeit through schooling in another suitable
position – is impossible within a reasonable term.

A reasonable ground could be constituted by prudential reasons
(loss of jobs), long-term incapability, frequent absence with
unacceptable consequences, malfunctioning, conscientious
objections, disrupted employment relationship or other grounds.
Ultimately, an employer is entitled to dismiss employees for one
ground or a cumulation of grounds both for individual and
business-related reasons.

Both permanent and temporary employees can be entitled to be
compensated in the event of a dismissal, also known as the
“transition compensation”. Employees are entitled to
transition compensation starting from the first day of their
employment. The amount of compensation is based on the monthly
salary and the number of working years.

6.6 Are there any specific procedures that an employer
has to follow in relation to individual dismissals?

Individual dismissals in the Netherlands require a procedure
either at the cantonal court or the UWV, an autonomous
administrative authority that is commissioned by the Ministry of
Social Affairs and Employment. The question of where the case gets
brought before depends on the ground for dismissal.

An employer must apply for a dismissal permit at the UWV when
the cause for dismissal was either formed due to business-

related reasons or long-term incapability. When the application is
completed, the UWV will notify the employee and provide a copy of
the request for a dismissal permit. The defence of an employee
needs to be known in writing within 14 days. Typically, the UWV
handles the application in no more than four weeks.

In the event of dismissal due to reasons relating to the
individual employee, the application for a dismissal permit can be
submitted at a cantonal court. The application must be in writing
and supported by a reasoned opinion. After the cantonal judge has
informed the employee of the application, he/she can file a
statement of opposition. Subsequently, both parties are invited by
the court for an oral hearing. Whether or not the contract will be
terminated depends on the “seriousness of the
reasons”.

6.7 What claims can an employee bring if he or she is
dismissed? What are the remedies for a successful
claim?

The decision to terminate the employment contract shall become
null and void when it is manifestly unreasonable. This includes
situations where: a statement of reasons is missing; the dismissal
is based on “sham recovery” or false declarations; the
consequences of dismissal are too severe for the employee; or the
employer has not sufficiently taken the disproportionality between
his interests and the negative consequences for the employee into
consideration. The remedy for a successful claim must constitute
financial compensation that is in accordance with the nature and
severity of the employers’ shortcoming.

The UWV also expects employers to aim towards reinstatement
within the business before dismissing the employee. In principle,
the reinstatement is limited to the business establishment where
the employee is working.

In the event of dismissal by mutual termination agreement, the
employee has a two-week reflection period to reverse the decision.
Furthermore, when a dismissal by mutual agreement has not been
concluded in writing, it is invalidated by operation of law.

Lastly, when the dismissal is based on the grounds as mentioned
in question 6.4 above, the employer will not obtain a permit to
dismiss the employee by either the UWV or the court.

6.8 Can employers settle claims before or after they are
initiated?

Under Dutch dismissal law, the parties can mutually conclude a
termination agreement. In fact, in many cases employers prefer to
settle because of the limited amount of reasonable dismissal
grounds.

Both employer and employee are free to choose whether payment is
involved in the termination agreement. Furthermore, the
aforementioned “transition compensation” is a common
clause in termination agreements. The criteria dictating whether an
employee is obliged to provide a transition compensation are
mentioned in question 6.5. Employees have a right to 14 days of
reflection to rescind the agreement in writing.

6.9 Does an employer have any additional obligations if
it is dismissing a number of employees at the same
time?

In the event of mass redundancy, the employer must act in
compliance with the Collective Redundancy Notification Act. The
obligations prescribed by this Act are triggered when the employer
aims to dismiss at least 20 employees functioning in the same
working area within a period of three months, based on prudential
grounds. The UWV and the trade unions with members working under
the employer must be notified on the intention of dismissing the
employees. Furthermore, the trade unions, as well as the works
councils, must be consulted on the plans. The employment agreement
cannot be terminated within a month after having notified the
relevant parties.

When the employer does not act in accordance with the rules
prescribed for mass redundancy, the termination agreement will be
void.

6.10 How do employees enforce their rights in relation
to mass dismissals and what are the consequences if an employer
fails to comply with its obligations?

Non-compliance with the obligations as prescribed by law –
for example, the Collective Redundancy Notification Act – by
the employer allows the cantonal court to void the termination
agreement. Instead of voiding, the employer has the right to
request an equitable remuneration. The equitable remuneration does
not interfere with the employees’ right to the “transition
compensation” when the employment has lasted for at least two
years.

The employee must request an annulment or an equitable
remuneration within two months after the day he reasonably could
have been or was aware of the employer breaching their obligations,
and no later than six months after terminating the employment
agreement or initiating the termination agreement.

As of January 1, 2021, small businesses with no more than 24
employees have the possibility to apply for compensation for paid
transition allowances if the business is terminated due to
retirement or death of the employer. This is subject to a number of
conditions, e.g., that the UWV/Cantonal Court has given permission
for at least one employee to terminate the employment contract
through company closure, and that the gross transition allowance
has been paid in full on or after January 2021.

7.1 What types of restrictive covenants are
recognised?

Dutch law knows three basic types of restrictive covenants.

The first one is the non-compete obligation which binds a party
to refrain from competing with someone else (other than their
employer) for a specific period within a certain geographical
area.

An agreement for non-recruitment restricts marketing and
recruitment activities by one person in a business deal. The party
refrains from requesting employees or clients from another.

Lastly, a non-disclosure agreement (NDA) restricts
communication. The party agrees to not share confidential or
sensitive information such as trade secrets, proprietary processes
or other specific activities/information relating to the
business.

7.2 When are restrictive covenants enforceable and for
what period?

Restrictive covenants are enforceable when: the employee is a
legal adult and the restrictive covenants must be agreed in
writing; they must be for a specific period (usually no longer than
one year); and within a certain geographical area. The validity and
enforceability of restrictive covenants are very limited for
temporary employment agreements.

7.3 Do employees have to be provided with financial
compensation in return for covenants?

The employer is not required to provide the employee with
financial compensation in return for covenants. The employer is
required to provide financial compensation if he wants to terminate
the employment.

7.4 How are restrictive covenants enforced?

Restrictive covenants can be enforced by means of legal action.
The court, at the request of the employee, has the competence to
annul covenants by virtue of the inequitable disadvantage that it
causes. Vice versa, the employer can request an injunction
if the employee disregards the restrictive covenant. The judge aims
to balance the employers’ interests (i.e. maintenance of
clients) with those interests of the employees (i.e. free choice of
employment).

8.1 How do employee data protection rights affect the
employment relationship? Can an employer transfer employee data
freely to other countries?

In accordance with the European Convention on Human Rights,
everyone has the right to respect for his/her private and family
life, his/her home and his/her correspondence. Case law has shown
that this article includes protection against employers.

With the European Union’s General Data Protection Regulation
(GDPR), implemented in May 2018, employees’ rights and
protections regarding personally identifiable information is
considerably expanded. Employers are required to provide their
employees with information about their personal data processing in
a transparent, concise and comprehensible manner that is easily
accessed using clear language. Data can only be lawfully processed
if and to the extent that it is either compliant with the initial
purpose for which it was collected, in the legitimate interest of
the business or necessary to perform the employment contract. In
fact, all personal data that has been collected must be deleted
once the data is no longer needed for the original purpose.
Processing personal data such as ethnicity, political views,
genetic information and sexual orientation is prohibited. The GDPR
further requires employers to have their employee’s consent for
processing data. The consent must be freely given, specific,
informed and unambiguous.

Since all the Member States in the European Union (EU) ensure
equal protection on personal privacy under the GDPR, personal data
can be transferred freely within the EU. In cases of the transfer
of personal data within the EU, the GDPR does not impose any
additional requirement with regard to the direct applicability of
GDPR. Nevertheless, when a controller engages a processor, the
relationship between data controller and data processor must be
governed by an agreement and is subject to the minimum criteria
laid down under the GDPR in these circumstances. Only when the
European Commission has decided that a third country guarantees an
adequate level of data protection, or appropriate protection
measures have been taken, or in single cases, is it permitted to
transfer the data. Appropriate measures include Binding Corporate
Rules, Standard Contractual Clauses by the Commission, approved
codes of conduct or legally binding instruments between
authorities.

8.2 Do employees have a right to obtain copies of any
personal information that is held by their employer?

Employers are obligated to keep a personnel file for their
employees. Employers shall have the right to obtain confirmation
from the employer as to whether or not personal data concerning him
are being processed, and, where that is the case, access to the
personal data, which includes the following information:

1. the purposes of the processing;




2. the categories of personal data concerned; and




3. the recipients or categories of recipient to whom the personal
   data have been or will be disclosed.

8.3 Are employers entitled to carry out pre-employment
checks on prospective employees (such as criminal record
checks)?

Screenings are only lawful when the employer has obtained an
official authorisation. Screening an employee can only be carried
out under the conditions as set forth in the GDPR.

8.4 Are employers entitled to monitor an employee’s
emails, telephone calls or use of an employer’s computer
system?

Under the GDPR, employers are not justified in monitoring
employee’s emails, telephone calls or the use of an
employer’s computer system without having a legitimate aim and
enhancing the proportionality to reach this aim. In ordinary
circumstances, the privacy of the employee will prevail over the
employer’s interest when the use of the internet is monitored
or logged. Only when there is a reasonable suspicion of misconduct
will the employer will be entitled to observe or track what
employees do with their internet connection and only for a limited
period of time and if you meet the requirements of the privacy
legislation. The conditions for the monitoring of employees are set
out in the General Data Protection Regulation (AVG) and the AVG
Implementation Act.

For example, you must be able to substantiate why the monitoring
of your employees is necessary and that this business interest
outweighs the infringement of your employees’ privacy. What is
and what is not permitted can differ per case and per sector.

Covert monitoring of employees

Covert (deceitful) monitoring of employees is normally not
permitted. As an employer, you must comply with a number of
additional conditions for clandestine monitoring, in addition to
the conditions for “normal” monitoring.

A clear internet and e-mail protocol is desirable because it
provides guidance in determining whether or not there is a
violation.

8.5 Can an employer control an employee’s use of
social media in or outside the workplace?

Employees can expect a “reasonable level” of privacy
for the maintenance of personal affairs and networks at their
worksite as long as this does not interfere with or
disproportionally harm business interests such as costs, security
risks, public relations and labour disputes.

The employer may only monitor what employees do on social media
if he has a legitimate reason for it and the monitoring is
necessary.

9.1 Which courts or tribunals have jurisdiction to hear
employment-related complaints and what is their
composition?

When complaints related to the employment agreement or other
employment-related disputes are in question, the District Court for
civil law (rechtbank) corresponding to the location where
the labour was normally executed has the competence to handle the
case.

In first instances, cases concerning employment will be handled
by a single, cantonal judge (kantonrechter). The Court of
Appeal consists of a panel with three counsellors while the High
Council has her cases handled and judged on by five members of the
civil law division.

9.2 What procedure applies to employment-related
complaints? Is conciliation mandatory before a complaint can
proceed? Does an employee have to pay a fee to submit a
claim?

While conciliation and mediation are widely used remedies, they
are not a formal requirement before a complaint can proceed at a
legal institution.

The complaint can proceed by means of a formal submission. The
submission contains the grounds on which the complaint is based,
together with all the ancillary claims. The defendant will commonly
submit a statement of defence after which the verbal hearing will
follow.

Besides the compensation for legal assistance, the costs that
come with procedures must be paid. This concerns a standing charge
that the Registrar (Clerk of the Court) charges for the
procedure.

9.3 How long do employment-related complaints typically
take to be decided?

Dependant on whether the case is brought before the court of
first instance or the UWV, 95% of the cases are decided within
three months – in the first instance.

9.4 Is it possible to appeal against a first instance
decision and if so, how long do such appeals usually
take?

The first instance verdict, decision or judgment is open for
appeal. An appeal must be filed within three months (four weeks in
case of summary proceedings). The appeal procedure takes
approximately four to six months.