Starting your own business in the Netherlands can be an exhilarating and rewarding experience. However, like in any other country, it’s crucial for startups to navigate Dutch employment law with care. To help you on this journey, we’ve put together an expanded guide that breaks down the key aspects of Dutch employment law, offering valuable insights and solutions to common challenges faced by startups.
1. Types of employment contracts
Dutch employment law recognizes three main types of employment contracts: indefinite (onbepaalde tijd), fixed-term (bepaalde tijd), and temporary (uitzendovereenkomst). Startups should familiarize themselves with these distinctions to ensure they’re offering the right contract type for each employee in the right situation.
Indefinite contracts have no fixed end date, while fixed-term contracts are set for a specific duration. Temporary contracts are used when employing someone through a temporary work agency. Keep in mind that you can only offer three consecutive fixed-term contracts in a three year period before it automatically becomes an indefinite contract. Additionally, be aware of the fact that if the interval between two fixed-term contracts is less than six months, they count as consecutive contracts.
2. Employee rights and benefits
Dutch employment law offers strong protections and benefits to employees, including minimum wage, paid holidays, and maternity and paternity leave. As a startup, it’s essential to stay informed about the rights and benefits afforded to your employees to ensure you’re complying with the law.
For instance, full-time employees in the Netherlands are entitled to a minimum of 20 vacation days per year. Moreover, if an employee falls sick, they are entitled to receive at least 70% of their salary for up to two years, with a minimum of the applicable minimum wage. It’s also important to be aware of (parental) leave entitlements.
4. Flexible working arrangements
As a startup, you might want to consider offering flexible working arrangements to your employees. Dutch law supports this by allowing employees who have worked for a company for at least 26 weeks to request a change in their working hours, schedule, or location. Employers can only refuse these requests for specific business-related reasons. Providing flexible working arrangements can boost employee satisfaction and help attract top talent to your startup.
5. Dismissal procedures
Terminating an employment relationship can be a delicate process. In the Netherlands, employers need a valid reason for dismissal, such as poor performance, misconduct, or redundancy. It’s crucial to follow the correct dismissal procedures and seek approval from the Employee Insurance Agency (UWV) or a court, depending on the situation. In cases of collective redundancies, employers must also comply with the Notification of Collective Redundancy Act.
To avoid potential legal issues, startups should maintain clear documentation of any performance or conduct issues and consult with an employment law expert before initiating dismissal
To conclude
Navigating Dutch employment law as a startup can seem intimidating, but with the right guidance and understanding, you can create a compliant and thriving work environment. By understanding the types of employment contracts, respecting employee rights and benefits, offering flexible working arrangements, and following proper dismissal procedures, you’ll be well on your way to building a successful startup in the Netherlands together with your employees.
May 2023
