Dutch labor law and employment contracts

The laws covering employment in the Netherlands are many and various. Your personal contract of employment will determine your pay and specific conditions. Dutch labor law covers key areas such as trial periods, vacation allowance, notice and dismissal, the minimum wage, health and safety, and equal treatment.

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Overview of Dutch employment law

The Netherlands performs reasonably well when it comes to employees’ rights. It scores 88 out of 100 on the 2022 Labor Rights Index, which is lower than the regional average (89) observed across Western Europe.

The country scores particularly well in terms of parental rights, fair treatment, work safety, and trade union rights. However, fair compensation for workers leaves much to be desired.

Useful information regarding working practices, your contract of employment, Dutch labor law, and the Netherlands’ minimum wage can be found on the website of the Ministry of Social Affairs and Employment (Ministerie van Sociale Zaken en Werkgelegenheid – MSZW) or UWV WERKbedrijf.

Collective Labor Agreements

A Collective Labor Agreement (collectieve arbeidsovereenkomst – CAO) is a written agreement covering working conditions and benefits, which is drawn up by employers, employers’ organizations, and employee organizations (such as unions).

A CAO operates at the company or industry sector level, and its provisions (e.g., the number of holidays) are often more generous than statutory requirements. Your contract of employment should state whether a CAO is applicable; you don’t have to be a member of a union to benefit.

If no CAO applies – all must be registered – you will need to negotiate your own terms and conditions. The largest trade union federation in the Netherlands is the FNV.

Employment contracts in the Netherlands

Most workers in the Netherlands have a fixed-term or permanent contract. These can be for zero-hours, part-time, or full-time work. Zero-hour contracts are used for on-call work (e.g., cleaning or jobs in the service industry).

Fixed-term agreements (tijdelijk contract) have a preset end date and are the most common forms of work contracts in the Netherlands.

Temporary contracts may legally be renewed two times within three years. After three years or three agreements, your employer must either terminate the employment relationship or offer you a permanent position. This regulation does not apply if the employee is younger than 18 and works a maximum of 12 hours per week, or in the case of substitute teachers or actors.

A permanent contract (vast contract) has no fixed end date. As such, they offer better job security and chances for career progression. It’s also more difficult to dismiss a permanent employee.

Other types of Dutch work contracts include:

• Internship contract (stagecontract) – for internships. These usually consist of fewer worker entitlements; for example, interns are not entitled to agreed minimum salaries.
• Payroll agreement (uitzendovereenkomst) – for payrolling staff working for third-party employment agencies (uitzendbureau). These contracts are usually very flexible (e.g., one day or one project).
• Secondment agreement (detacheringsovereenkomst) – for employees working for a temping agency. These contracts have a fixed end date.
• Work placement contract (praktijkovereenkomst – POK) or professional practice agreement (beroepspraktijkvormingsovereenkomst – BPVO) – for traineeships

Is there a probation period in the Netherlands?

In the Netherlands, it is common to set a trial period for new hires. After that, pending a review, the employee usually transitions to regular employment.

Under Dutch employment law, a probation period is only valid for work agreements lasting more than six months and must be agreed upon in writing. It can last up to one month for fixed contracts and up to two months for (new) permanent contracts. Employers cannot set a trial period for second contracts.

During the probation period, you and your employer may terminate your contract without notice. However, there must be a valid reason; for example, your job description is not as advertised, or you’re performing below satisfaction.

Dutch labor law on notice periods and termination

The notice period for the employee is usually one month. If the notice period for the employee to end a contract of employment is extended, the notice period for the employer should be double the notice period of the employee.

Under Dutch labor law, dismissal is particularly unusual, as it is very protective of employees: in most cases, the employer needs permission from the labor office, known as UWV WERKbedrijf, or the court to fire you.

As such, a permanent contract with an unlimited term can only be terminated by the employer with the consent of the employee, UWV WERKbedrijf, or the court. The court and labor offices assess whether there are grounds for a valid termination.

If an employer gives notice of termination without obtaining prior approval, the employee could nullify the termination. This rule is not applicable in the case of summary dismissal (such as fraud or theft by the employee). Courts are, however, very reluctant about accepting summary dismissals under Dutch labor law. It is, therefore, very important to contact an employment lawyer immediately if you are fired on the spot.

What are valid reasons for dismissal?

In the Netherlands, employers must have valid reasons for firing an employee. Legitimate grounds for dismissal include:

• Conscientious objection (gewetensbezwaren) – if the employee’s conscientious objection due to religious, moral, or ethical reasons causes problems (e.g., a weekend employee refusing to work on a Sunday). Employers must be able to prove in court that there is no other suitable work.
• Disrupted working relationship (verstoorde arbeidsverhouding) – if the employee and employer no longer can work together (e.g., due to a conflict)
• Economic reasons (bedrijfseconomische redenen) – when the company is undergoing economic changes, such as restructuring, relocation, bankruptcy, or (partial) termination
• Long-term illness/incapacity for work (langdurig arbeidsongeschikt) – if the employee has been absent due to illness for two years or more
• Poor work performance (onvoldoende functioneren) – if the employee is not doing their job properly and they’ve been given ample chances to improve
• Regularly absent due to illness (regelmatig ziek) – if the employee is frequently ill and their absence causes serious consequences for the employer
• Unwanted behavior (onbehoorlijk gedrag) – if the employee misbehaves or does not keep appointments (e.g., stealing, coming to work drunk, fraud, or refusing to work without good reason)
• Other circumstances (andere omstandigheden) – any other valid reason to terminate the employment relationship. For example, if the employee doesn’t have a work permit or is serving time in prison.

Employers may also dismiss employees who have reached the statutory retirement age (AOW-leeftijd). In 2024, the standard pension age in the Netherlands is 67.

That said, it’s not obligatory for employees to retire at that age. If you choose to continue working, you may need a new contract.

Who enjoys extra protection against dismissal?

Like many other countries, the Netherlands provides extra protection from contract terminations to specific groups of people. For example, pregnant employees may not be dismissed, unless there are extraordinary circumstances.

Other instances in which an employee may not be fired:

• During the first two years of your long-term illness
• During and up to six weeks after maternity leave
• After maternity leave, if you have become ill due to your pregnancy or the delivery
• Members of a works council (ondernemingsraad), employee representation (personeelsvertegenwoordiging), or occupational health and safety committee (arbocommissie)
  • This also applies to candidate members or former members (up to two years after they left)
• Occupational health and safety experts (arbodeskundige)
• Employees performing (foreign) military service or replacement service
• If the circumstance is comparable to one of the abovementioned situations

Likewise, employers may not terminate your work contract due to:

• Company transfer
• Trade union (vakbond) membership or participating in a union activity (e.g., work strikes)
• Your intention to take parental leave (ouderschapsverlof) or nursing care leave (zorgverlof)
• Your work as a data protection officer (functionaris gegevensbescherming)

If you feel you have been unfairly dismissed, you can refuse to accept the termination. You must inform by writ your employer as soon as possible. You can then start negotiating the terms of your leaving.

When you cannot come to a settlement, you can escalate the situation to the UWV or the subdistrict court (kantonrechter). It’s recommended you enlist the help of an employment law expert to help you contest an unfair dismissal and achieve an optimal settlement arrangement.

Expat-friendly experts on Dutch labor law include:

• Legal-Expat
• Russel Advocaten

Changing jobs: your job contract and residence permit

Any changes in your work or partnership status must be reported to the Dutch Immigration and Naturalisation Service (Immigratie- en Naturalisatiedienst – IND) within four weeks. You or your sponsor (such as an employer) can be penalized by the IND if changes aren’t reported, including contributions to repatriation costs.

If you change jobs, you don’t necessarily need a new Dutch residence permit, but the same rules will apply as for the first permit you were granted. So if you worked with a separate Dutch work permit, your new employer needs a new work permit, too.

If you worked as a highly-skilled migrant in the Netherlands, your new employer needs to be eligible to apply under the highly skilled migrant scheme, and will need to prove to the IND that you still meet the requirements of the highly skilled migrant scheme, for example, sending in your contract of employment to show you earn the required salary.

If you are applying to renew a Dutch residence permit, your circumstances will be assessed again in reference to the original application. The main exception is that after three years of working on any given residence permit that allowed you to work (such as a partner’s permit or employee single permit), you no longer need a separate work permit to sign a contract of employment.

Highly skilled migrants can also change their purpose of stay into labor after three years, which allows them to work without a work permit and without meeting the requirements for the highly-skilled migrant scheme in the Netherlands.

Unemployment benefits (WW) in the Netherlands

Typically, all working residents in the Netherlands must first pay Dutch social security contributions in order to receive any benefits. Your employment history determines the amount and duration of unemployment benefit payments.

For the first two months you get 75% of your last earned salary, and thereafter 70%. You must have worked 26 out of the previous 36 weeks before the first day of terminating your contract of employment (or fewer for those not in regular employment), although benefits can be restricted if other benefits are in operation.

What is a standard salary in the Netherlands?

The Netherlands has the second-highest minimum wage (minimumloon) in Europe after Luxembourg. Employers are legally required to pay their employees a gross minimum salary for their work during a given period. A person’s income cannot be below this set minimum wage. If it is less, the contract will be nullified.

If you want to assess an employment contract offer, you can check the market rate for your salary or calculate bruto/netto rates (before/after tax and social security deductions) at www.loonwijzer.nl. It is standard practice in the Netherlands to get extra wages (usually 8% of your yearly salary) as a holiday allowance (normally paid in May) plus four weeks of paid leave.

Vacation days and holiday pay

Under Dutch labor law, sick employees will not be treated differently from ‘healthy’ employees, which means holidays will be accrued during the whole period of sick leave. To prevent an employee from accruing a significant backlog of holidays – which could be a risk for the employer – an expiration date of six months is applied.

In brief, the laws on vacations in the Netherlands include the following:

• The law does not distinguish between employees who are fit or unfit for work; both groups will accrue the same number of vacation days in the Netherlands and the minimum Netherlands holiday pay.
• Employees should be able to take holidays during sickness in order to get a break from reintegration activities.
• If an employee does not take their minimum number of Netherlands vacation within six months after the year they accrued the holidays, the holidays will lapse, unless the employee has not been able to take the holiday for reasons such as sickness or workload.
• Holidays accrued before 1 January 2012 and holidays on top of the legal minimum number of holidays will lapse after five years.
• Twenty is the legal minimum number of vacation days for a full-time employee.
• Holidays that have the shortest expiration date will be deemed to be taken first by the employee.

Vacation days in the Netherlands

The legal minimum number of vacation days in the Netherlands per year is four times the amount of days worked per week. This typically means 20 holidays in the case of a full-time employee working a five-day week (4×5 working days=20 Netherlands vacation days).

However, it is common practice in the Netherlands for a full-time employee to be entitled to approximately 25 holiday days per year, in addition to more than 10 public holidays in the Netherlands.

Employees may be granted more vacation days in the Netherlands as a result of personally negotiating the conditions of their employment contract. Otherwise, workers who are part of a Collective Labor Agreement (CLA, or CAO in Dutch) may also be granted a package of more Netherlands vacation or vakantie (vacation in Dutch).

CLAs are commonly formed between industries or employers and trade unions. They bind all employees within that company to the union-agreed employment conditions, including:

• Salary levels
• Vacation days
• Overtime
• Contract terminations
• Parental leave
• Pensions
• Education
• Childcare
• Other employee benefits

Such union ties are commonly formed in the Netherlands and often offer more favorable conditions than those prescribed by law, but they can never contradict Dutch labor law.

Dutch employment law dictates an expiration date of six months for taking the legal minimum number of holidays. As such, employees must take all their holidays within six months after the year in which the holidays were accrued.

Should the employee not take the holidays on time, they will lapse without any compensation or payment. The expiration date of six months is not applicable to holidays that the employee is entitled to in addition to the legal minimum number of holidays. These extra holidays will not lapse until after a period of five years.

Holiday pay in the Netherlands

The biggest question most employers ask is: what is the legal amount of holiday entitlement? During your vacation days in the Netherlands, employee benefits include the continued payment of your full wage.

Under Dutch employment law, employees are also entitled to a minimum holiday allowance of at least 8% of their annual salary (including salary, bonuses, and allowances) in addition to their vacation days in the Netherlands.

The holiday allowance may be reduced or eliminated, however, if you earn more than three times the Dutch minimum salary and sign an agreement. Your holiday leave allowance is paid by your employer usually once a year (around May), and your employer must state the holiday allowance on your payslip.

Rules for using your Dutch vacation allowance

Your Netherlands vacation days must be taken within six months in the year after they were accrued, otherwise your vacation days in the Netherlands will lapse without any compensation or holiday pay.

There is, however, one exception to this rule; if an employee is not able to take holidays, for instance, due to sickness or workload. In this case, your holidays will not lapse until after a period of five years. This five-year time limit is also applicable to all holidays accrued before reforms implemented in January 2012 and to all holidays to which the employee is entitled on top of the legal minimum number of vacation days in the Netherlands.

As a final resort, you can also come to a private agreement with your employer to extend the period in which you can take your vacation.

Useful resources

• Business.gov – official government resource for companies, including termination procedures and employment rights
• Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen – UWV) – government agency responsible for unemployment benefits