Employment contract of fixed or indefinite term?

Dutch employment law distinguishes between two kinds of employment contracts: 

  • Fixed term 
  • Indefinite term 

Fixed term employment contracts

A fixed or definite term employment contract is an employment contract for a fixed amount of time. Usually such an employment contract contains an end-date, however, it is also possible to agree on a certain circumstance which brings about the ending of the contract, like the completion of a project.

A fixed term employment contract ends by operation of law. This means that it is not necessary to take further action to end the employment contract. Please note that for contracts of 6 months or more it is required for the employer to let the employee know in writing whether they will offer a subsequent contract.  

An important note concerning fixed term contracts concerns the possibility of termination. Without a clause stating that termination is possible, the contract cannot be terminated during its course.

Indefinite term employment contracts

An indefinite term employment contract lasts for an undetermined amount of time and ends when it is terminated by either the employer or the employee. 

From fixed term to indefinite term

Dutch law does not permit an endless amount of fixed term employment contracts. After either 3 fixed term contracts or after 3 years, whichever comes first, the fixed term contract is automatically converted into a contract of indefinite term. The chain can be broken by a break of 6 months or more. For example:

If an employee has had 3 subsequent contracts of 1 year each and then no contract for 6 months, the next contract will count as the 1st contract of fixed term in a new chain.

Employment contracts from previous employment may also count towards this rule. This is the case if the new employer must be considered a subsequent employer (in Dutch: opvolgend werkgever). This subsequent employer may be part of the same group or concern but may also be an employer completely unrelated to the original employer. What’s determining is whether it concerns more or less the same position, for example when it comes to the required skills and responsibilities.

Deviation from the above-mentioned rule is only possible by collective labour agreement.

Issues for foreign employees or expats

Years worked abroad for the same employer or for another employer to whom the new employer is considered a subsequent employer, can also be considered towards the rule of fixed term contracts becoming indefinite term contracts. 

For any questions concerning the differences between fixed term and indefinite term contracts or the conversion of fixed term to indefinite term, please do not hesitate to contact us.