Employers like to use it: an employment contract that ends automatically once a project is completed. Practical, you might think. Yet many lawyers and employment lawyers are less than enthusiastic about it. The reason? In practice, project agreements turn out to be legally more complicated than they appear on paper.
What is a project agreement?
A project agreement is a fixed-term employment contract, where the end is not linked to a fixed date, but to the completion of a specific project. The idea is clear: once the project ends, the employment contract also ends by operation of law.
But beware: for the agreement to end legally, it is essential that the moment at which the project ends is objectively determinable. This means that it must be perfectly clear to both parties when the project has been completed (determinable) and that that moment may not depend on the will of the employer or client (objective).
Why things often go wrong
Even in projects where the demarcation seems clear, legal questions can still arise. Consider a project to paint stairs in a new construction complex. What if the project is expanded to include additional homes? Does that still fall under the same project or is that a new project? If no clear agreements are made about this, discussions will arise. And if there is doubt about the end date, the employment contract does not end by operation of law.
Consequence: the agreement legally becomes an open-ended contract, with all the attendant protections for the employee.
Project agreement or still temporary contract?
The confusion is compounded when the employee is not employed by the client itself, but is temporarily employed by a third party through the employer. Many employers include in the contract that employment ends once the client completes the project.
But this is not legally permissible in the case of a project agreement. After all, in that case, the end of the project depends on the client and is therefore not objectively determinable. Such a construction then falls under the temporary employment clause of article 7:691 paragraph 2 BW.
A temporary employment clause may only be used in true temporary employment contracts, and there are limits on that too: a maximum of 26 weeks worked (or 78 if the collective bargaining agreement allows). Have you passed that limit? Then the employment contract no longer ends automatically and an employment contract for an indefinite period arises here as well.
Smart tips for employers
If you still want to work with a project agreement, note the following:
- Decide in advance whether you really mean a project agreement, or whether you actually want more flexibility as with a temporary employment contract with temp clause. Only with the latter does the client get to decide when the project ends.
- Describe the project as specifically as possible. Not in terms of a completion date, but in terms of the work to be completed. For example, "the completion of all painting work on stairwells A, B and C in project X."
- Consider including an expiration date. By doing so, you build in a safety net: should the project continue or end inconclusively, you always have a hard date on which the employment contract ends. Note, however, that if work continues after that, the chain arrangement may still lead to an indefinite contract.
Conclusion
A project agreement can be a useful tool for temporary deployment, but only if you formulate it legally watertight. Is the end of the project not defined sharply enough or made dependent on a client? Then, as an employer, you run the risk that the employment contract does not end as intended and imperceptibly turns into an indefinite contract.
This blog was written by mr. Stijn Blom, employment lawyer at Arbeidsadvocaat.nl B.V. Stijn has extensive experience in employment law and supports entrepreneurs and employees on a daily basis with a variety of employment law issues. From dismissal cases to drafting watertight contracts and regulations - with his practical and personal approach, he helps employers and employees move forward. Want to know more? Visit Stijn's page.
Arbeidsadvocaat.nl is happy to think with you if you have questions about project agreements. Please feel free to contact us .
April 2025
