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Topic 1 Terminology and legal frameworks of the national labour market

Module 4: Legal framework of employment in The Netherlands Unit 1 Introduction to the Dutch labour market and the country’s system Topic 1 Terminology and legal frameworks of the national labour market

Dutch labour law is very extensive and relatively complex. It is divided into collective and individual law and is closely linked to social security law.
The Dutch Immigration and Naturalisation Service (Immigratie- en Naturalisatiedienst, IND) has the sole responsibility to issue a residence permit.
Labour law gives employees a strong legal position.
The employment relationship under Dutch law is subject to mandatory legal provisions, such as those set out in the Dutch Civil Code.
The Dutch IND will be responsible for assessing whether TCN meets all the requirements for a residence permit.
A residence permit is required for a foreign worker.
An employer must apply for an employment permit for a foreign worker outside the European Economic Area and Switzerland.
Foreign employers can recruit employees in the Netherlands either through a local or a foreign institution.
The employer has a duty to provide a safe workplace.

Under Dutch law, an employment contract may be either oral or written.

However, according to Article 7:655 of the Dutch Civil Code, the employer must inform the employee in writing of the following (amongst other) conditions:

the name and residence of the parties;
the location where the work is to be performed;
the job description and duties;
the date of employment;
if the employment contract is for a fixed term, the period;
the holiday entitlement or the method of calculating the holiday entitlement;
the duration of the notice periods to be observed by the parties or the method of calculating such periods;
the salary and intervals of payment and, if the remuneration depends on the results of the work to be done, the amount of work to be done per day or per week, the price per piece and the time to be spent on the work;
working hours of work per day or per week;
the employee’s pension rights (if applicable);
the collective labour agreement (if applicable).

Dutch employment law for Asylum seekers

Asylum seekers are given access to the Dutch labour market to find a job.

Although Dutch legislation allows asylum seekers access to the labour market, in practice it is extremely difficult for asylum seekers to find a job. Employers are not eager to hire an asylum seeker because of administrative obstacles and the limited duration of employment. The employment licence for asylum seekers (tewerkstellingsvergunning) is required by the employer before the asylum seeker can start working.

To obtain an employment licence, the asylum seeker must fulfil the following cumulative conditions:

The asylum application was filed at least 6 months ago and has not yet been (finally) decided;
The asylum seeker is staying legally in the Netherlands on the basis of Article 8(f) or (h) of the Aliens Act;
The asylum seeker receives reception conditions that fall within the scope of the RVA or that fall within the responsibility of Nidos;
The asylum seeker does not exceed the maximum duration of employment, which is 24 weeks per 12 months;
The intended work is performed under general labour market conditions;
The employer provides a copy of the “W document” (identity card).

The procedure for obtaining the employment licence from the Dutch Employees Insurance Agency does not in practice take longer than 2 weeks, which is the period provided for by law.

Notification obligation:

For a fixed-term employment contract of 6 months or longer, one month is required and the employer has the obligation to inform the employee if the employment contract will be terminated or not (aanzegverplichting). Failure to notify the employee, the employee has the right to claim the salary for the period in violation up to a maximum of one month’s salary.

Trial period:

It must be set out in writing. In the case of an employment contract of indefinite duration, an employment contract of indefinite duration or an employment contract limited to two or more years, the trail period may not exceed two months. In the case of fixed-term employment contracts of more than six months but less than two years, the trail period may not exceed one month. The trail period should be of equal duration for both the employer and the employee.

Notice period:

The statutory notice periods for the employer under Dutch law are as follows:

less than 5 years of service: 1 month
more than 5 years but less than 10 years’ service: 2 months
10 or more years of service, but less than 15 years of service: 3 months
15 or more years of service: 4 months

The employee must observe a notice period of one month.

Dutch various legal forms

The Dutch legal system recognises 9 different legal forms for companies. The most popular and common legal forms are eenmanszaak, vennootschap onder firma (VOF) and besloten vennootschap (BV). These legal forms are associated with different levels of liability, regulations, taxes and administrative structures

Eensmanszaak:

Translated, it means “sole proprietor”. Very quick and easy to set up at the local Chamber of Commerce. There are no capital restrictions or other legal limitations involved. As the name suggests, the company consists of only one person, but can also employ people with only one owner. If the profit is small, the entrepreneur pays little tax.

Vennootschap onder firma (VOF):

A partnership between 2 or more partners who jointly own a business. The partners themselves are liable for the debts.

Besloten vennootschap (BV):

It is a legal entity, the liability of a company is separate from its owners. If the BV cannot meet its payment obligations, the creditor can only claim the assets of the BV unless other contractual agreements, such as a personal guarantee, have been made.

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