Dutch Employment Law

What is the fair compensation?

If the ending of the employment contract is due to gross misconduct from the employer, a judge may order the employer to pay a ‘fair compensation’. 

Such gross misconduct may include but is not limited to:

• Unjust summary dismissal
• Termination in violation of a prohibition to terminate
• Discrimination by the employer
• Stating a false ground for termination in order to create a situation which is unworkable for the employee to finally terminate the employment contract on the grounds of a disturbed relationship;

What amount in fair compensation is owed?

As opposed to the severance payment, there is no calculation available to determine fair compensation. A judge will decide on the amount of fair compensation based on the circumstances of the case. Aspects a judge may weigh in making the decision include:

• The duration of the employment
• The expected continued duration of the employment if the gross misconduct from the employer had not taken place
• Whether the employee has found new employment
• How likely the employee is to find new employment
• The amount of culpability of misconduct from the employer 
• The amount of culpability of the employee
• Whether the employee will receive severance payment
• Material and immaterial damages

Questions
Are you looking to receive fair compensation from your employer, or your employee has gone to court and demanded fair compensation? At Wessel van der Lans we can help navigate the system.

by wesselvanderlans

What is a collective labour agreement (cao)? And how does it affect me?

In the Netherlands employer organisations and employee organisations may negotiate and conclude a collective labour agreement (in Dutch: cao) in their branch. These agreements contain employment conditions, like salary scales, number of holidays, permitted working hours, etcetera.

Dutch employment law facilitates these collective labour agreements by allowing deviation from the law via collective labour agreements in certain cases. For example, it is only possible to deviate, to the disadvantage of the employee, from the rule that after either 3 years or 3 subsequent contracts a temporary employment contract is automatically converted into a contract of indefinite term via a collective labour agreement.

Scope

Collective labour agreements have a scope, which usually consists of a description in the collective labour agreement of the company activities considered to fall under the branch and a description of those considered to be employers and employees in the light of this collective labour agreement. 

Generally binding collective labour agreement

The minister of Social Affairs and Employment (in Dutch: Sociale zaken en werkgelegenheid) can declare a collective labour agreement generally binding. This means that it applies to all employment relationships that meet the above-mentioned scope. The general binding collective labour agreement may last a maximum of 2 years. 

When should an employer apply the collective labour agreement to an employee?

An employer should apply the collective labour agreement if:

1. They are a member of a party that concluded the collective labour agreement. The employment conditions should then be applied to all employment relationship that meet the scope, including to those with employees that are not a member to a concluding party themselves;
2. They are not a member of a party that concluded the collective labour agreement, but the collective labour agreement has been declared generally binding. The employer is required to apply the generally binding collective labour agreement to all employment relationships within its scope until the end of the declaration. 

When can an employee demand that the employer applies the collective labour agreement to their employment relationship?

There are 3 situations in which an employee can demand that the employer applies the collective labour agreement to their relationship:

1. Both the employee and the employer are a member of a party to the collective labour agreement;
2. In the employment contract includes a clause stating that the collective labour agreement applies;
3. The collective labour agreement has been declared generally binding.

Despite an employer being required to apply the collective labour agreement to all employment relations within the scope if he is a member of a concluding party, the employee to whom none of the above options applies, has no way of invoking this obligation towards their employer. The only option for this employee is to contact the employee organisations. 

Consequence of not applying the collective labour agreement

It is advisable for employers to carefully investigate whether a collective labour agreement applies or should be applied, as wrongfully not applying it may have serious and expensive consequences: 

• Employees can force the employer to apply the collective labour agreement in court, which usually includes a claim for underpayment of salary with retroactive effect;
• Employee organisations can force the employer to apply the collective labour agreement in court and claim for example underpayment of salary of all affected employees independent of whether these employees agree to this;
• Employee organisations may also claim damages due to the loss of authority, influence and recruiting power;

More often than not, a collective labour agreement is accompanied by a mandatory pension fund. Pension funds may retroactively claim unpaid employer contributions.

Issues for foreign employers and expats

There is often no (English) translation available of collective labour agreements, making it hard to properly call upon or apply a collective labour agreement. 

For any questions or concerns regarding the applicability of a collective labour agreement, its content and explanation, please do not hesitate to contact us.

by wesselvanderlans

How to deal with illness?

When is an employee sick?

According to Dutch law, an employee is sick if they cannot perform their work fully, meaning that if there is only a small part of the work they cannot do, they are sick. For example, an employee who works at a gardening store and whose job does not include any heavy lifting except when unloading a truck once every 2 weeks, is sick if he is unable to do any heavy lifting.

What happens when an employee is sick?

An employee calls in sick. Following that, it is up to the employer to notify the company doctor. Only the company doctor can determine whether the employee is actually sick and what they can and cannot do. Confirming illness is not up to the employer. 

The company doctor will also determine whether illness is short-term or long-term. If it is expected to last for more than 4 weeks, we speak of long-term illness. In the case that the employee refuses to see the company doctor to confirm the illness, the employer can suspend their salary payments until they comply with their obligation to visit the company doctor.

Obligations of the employee

During their illness, the employee is obligated to work on his recovery and prohibited from worsening their condition. The employee is also required to cooperate towards their reintegration. This includes performing fitting work and visiting the company doctor.

If the employee is not meeting their obligations, the employer may, after a written warning, stop their salary payments. Eventually, the employer can under circumstances resort to summary dismissal.

Obligations of the employer

The employer should continue paying the sick employee’s salary for at least 70% during the first two years of illness. During the first year of illness, this may not be less than minimum wage. It is common for employers to continue paying 100% of the salary during the 1st year. This may also be required by the collective labour agreement or included in the employment contract. Furthermore, the employer should take measures to re-integrate the employee. 

If after 2 years of illness, the UWV judges that the employer has not taken sufficient measures to re-integrate the employee, they may impose a wage penalty. This means that the obligation to continue paying the sick employee’s salary and the corresponding re-integration obligations may be extended up to a year. 

What is re-integration?

Re-integration means taking measures to help a sick employee return to their own (adjusted) position or to perform another (adjusted) position within the employer’s company or another company. The starting point for re-integration is for the employee to return to their own position. Adjustments may have to be made regarding the workplace, the tasks or the hours. Only if this is not possible, should the employer look for another fitting position within their own company. Under circumstances the employer can be required to offer the employee schooling to make the other position fitting for the employee. For example, a construction worker with a bad back may no longer be able to do any construction work, but may be able to perform a desk job. The employer can offer the employee schooling to make the desk job fitting for the employee. However, maybe the employer does not have any fitting desk jobs available. In that case, the employer may have to start looking at re-integration at another company. This is called the second track (in Dutch: tweede spoor). Generally, the second track is not started before one year of illness, but under circumstances it can be required from the employer to start the second track much earlier than that. 

The following steps should be followed during re-integration.

When is re-integration successful?

Re-integration is successful if the employee is performing fitting work with a structural character. The work should be as close to their own position as possible. 

Disagreements concerning illness or re-integration

The re-integration may strand. In that case, both the employer and employee have the option of requesting an expert opinion from the UWV (in Dutch: deskundigenoordeel). 

An expert opinion can be requested to answer the following question:

• Can the employee fully perform their own position?
• Has the employee or employer taken sufficient efforts towards re-integration?
• Is the adjusted or other work fitting?
• Can the employee’s sickness absenteeism decrease within the coming 26 weeks if their work is adjusted or they are offered other fitting work?

Issues for foreign employers or expats

Dutch employment law gets exceptionally complicated if it comes to sick employees, making it easy to get lost in all the rules and obligations. At Wessel Van der Lans Advocaten we can help advice you during the process. 

by wesselvanderlans

Holiday

Amount of holidays per year

Dutch law makes a distinction between statutory and non-statutory holidays. Statutory holidays are the minimum number of holidays the employee is owed based on the law. Non-statutory holidays are the holidays an employee is granted atop the statutory holidays, for example in the employment contract or a collective labour agreement.

Statutory holidays

Dutch law requires that an employee is granted a minimum of 4 times the number of hours worked per week, meaning the employee can take 4 full weeks of holiday. During holidays the employee is owed their regular salary. 

Statutory holidays should be taken within 6 months after the calendar year in which they were acquired. So, if an employee still has statutory holidays on December 31st 2022, they can take these before June 31st 2023. After that, the holidays expire. Employers should warn their employees to take up their holidays before they expire.  

Non-statutory holidays

Unlike statutory holidays, non-statutory holidays expire 5 years after they have been accrued. 

Another difference is that non-statutory holidays may sometimes be traded for salary or for sick days. This needs to be agreed in writing and is not possible for statutory holidays.

National holidays

National holidays are separate from the above mentioned holidays. They are in principle not owed by the employer. This can be different if a national holiday has been named as such in the employment contract, the handbook or the collective labour agreement. In that case, the employee is free on the specified national holidays. These holidays will not be subtracted from the statutory holidays or non-statutory holidays.

Taking holidays

The employee informs the employer in writing of the date and period of their desired holiday(s). The employer can only refuse in writing within 2 weeks after the request and only if they have substantial reasons to do so. This will usually not be the case. The employer should also take into account that the employee should at least be given the opportunity to take 2 subsequent weeks of holiday. Holidays are taken in hours, not in days, meaning that an employee can for example take half a day off if they wish to do so.

An established holiday is not easily undone. The employer can only undo the established holidays for substantial reasons, like a sudden peak of work or sick employees. In that case the employer should compensate the costs of possible cancellations that are a consequence of undoing the established holidays.

Designating holidays

The employer cannot simply force the employee to take holidays. However, it is possible for employers to designate a few days as holidays ahead of time. A condition for this is that the right of the employer to select certain holidays as compulsory holidays and the amount of holidays that this counts for should be included in writing in the employment contract or handbook. Sometimes it is included in the collective labour agreement. Compulsory holidays should also be announced well in advance.

Sickness and holiday

If the employee gets sick during their holiday, they should inform their employer. These days will then be counted as sick days and not as holidays. The employee can then take the holidays at another time.

An employee that is already sick, is also entitled to holidays. A sick employee who takes up holiday has no re-integration obligations during this holiday. When the employer disagrees with the requested holiday of the sick employee, he can ask the company doctor to assess whether there are medical objections against the suggested holiday. Usually this is not the case. 

by wesselvanderlans

Unemployment benefits

If an employee loses their job, they may be entitled to unemployment benefits (WW-uitkering). The employee can apply for unemployment benefits at UWV. UWV will verify whether the (ex-)employee meets the conditions to receive unemployment benefits and decide the amount to be received and the time period during which the benefit will be received. Expats are also entitled to unemployment benefits if they meet the conditions.

The topic of unemployment benefits is also important for employers. This is because the employer needs to pay contributions for the unemployment benefit from the salary of their current employees. Employers may also be obligated to pay an addition or extension of the unemployment benefits based on a collective labour agreement or may have chosen to be fully responsible for the unemployment benefits (in Dutch: eigenrisicodrager)

• 26 out of 36 weeks

In order to qualify for unemployment benefits, the employee must have worked for at least 26 weeks in the past 36 weeks. If the employee was sick, has been on pregnancy or birth leave during the past 36 weeks or took unpaid leave, the period looked at will be a period further back than 36 weeks.

• No fault

The loss of job must not be the consequence of the fault of the employee, meaning that an employee is not entitled to unemployment benefit if they have quit their own job or are fired due to gross culpable acting or negligence or instant dismissal.  

Ending an employment contract with mutual agreement is another story. In this case, UWV will base their decision on the wording and content of the settlement agreement. For example, the end date should respect the applicable notice period and the settlement agreement should state that it has been agreed upon at the initiative of the employer. These are only a few examples. Many other details will determine whether the (ex-)employee is entitled to unemployment benefits after a settlement agreement. This is one of the many reasons why it is advisable to have an employment lawyer check the settlement agreement before agreeing to it.

• Available for work

The (ex)employee must be available for work. Therefore, if the (ex)employee is sick when the employment contract ends, they will not receive unemployment benefits. The same applies to planned unpaid activities that prevents the start of a new job.

• Loss of more than 5 hours

The (ex-)employee is only entitled to unemployment benefits if the loss constitutes a loss of more than five hours of employment per week. Partial unemployment may therefore also lead to a right to unemployment benefits. If an employee works less than 10 hours a week, the employee qualifies for unemployment if they lose half or more of those hours.

• The employee was insured against unemployment

Employees are usually insured against unemployment. Their employees have to pay contributions over their salary. These contributions are lower for employees with an indefinite term contract than for employees with a fixed term contract. Those who are self-employed are usually not insured against unemployment.

Duration of the unemployment benefits

The unemployment benefits last a minimum of 3 months. If an ex-employee has worked for more than 4 years out of the past 5 years, their unemployment benefits may be extended. The duration of the benefits is equal in months to the years they have worked up to 10 years. If the ex-employee has worked for 11 or more years, the additional years count for half a month of unemployment benefits each. The duration of the statutory unemployment benefits cannot surpass 24 months. A few examples:

• An ex-employee who has worked for the past 6 years will be entitled to 6 months of unemployment benefits.
• An ex-employee who has worked for the past 12 years, will be entitled to 11 months of unemployment benefits.
• An ex-employee who has worked for the past 30 years, will be entitled to 24 months of unemployment benefits.

Years worked abroad may sometimes also count towards this rule. In that case, the ex-employee will need to prove that they worked these years with adequate documentation. UWV will then confirm this with the respective foreign authorities. 

Amount of unemployment benefits

Unemployment benefits are 75% of your gross salary during the first 2 months and 70% during the remaining months. 

by wesselvanderlans