FAQ for foreign employers

Employment contract

What is the difference between fixed term and indefinite term employment contracts?

An employment contract of fixed term ends by operation of law at the agreed-upon end-date, meaning it will end automatically without required action. An employment contract of indefinite term has to be actively ended. For more information concerning fixed term and indefinite term employment contracts, click here. 

Can I terminate a fixed term employment contract during its course?

Termination of a fixed term employment contract is only possible if the contract contains a clause stating that termination is possible. If all further requirements for termination are met, termination is possible. 

How many employment contracts of fixed term can I conclude with my employee?

In principle, it is possible to conclude three subsequent employment contracts of fixed term with your employee. A fourth subsequent employment contract of fixed term will automatically be converted into an employment contract of indefinite term, unless there is a period of six months or more between the third and the fourth employment contract. 

Conversion from fixed term to indefinite term also takes place after three subsequent years of employment, unless there is a break of six months or more. 

What is a collective labour agreement (cao)?

A collective labour agreement (in Dutch: cao) is an agreement between employer and employee organizations concerning employment conditions within a branch or company. Under circumstances, you may you to apply the collective labour agreement to your employees. To find out more concerning collective labour agreements and their applicability, click here.

Can I change the terms of employment without permission from my employees?

It is not easy to change the terms of employment if the employee does not agree. Therefore, it is always advisable to try to get permission from the affected employee, before forcing the change via one of the three available routes: 

  • The right of the employer to give instructions
  • A unilateral amendment clause
  • Good employeeship


My employee requested holiday leave. Can I refuse?

No, in principle refusal is not possible. Only if there are substantial reasons for refusal, can the request be refused within two weeks in writing.

Dutch labour law allows the employer to include a period in the employment contract during which the employer should take a specified number of holidays. Such a period may even be included in the collective labour agreement.

Do I have to allow my employee to go on holiday whilst they are sick?

In principle, yes. A sick employee is entitled to holidays. During their holidays they will not have to perform any reintegration duties.

Any medical objections against the planned holiday can be determined by the company doctor.


My employee called in sick. Can I ask them what the reason is for their illness?

No, you are not allowed to ask employees for medical information. Any medical concerns are up to the company doctor to judge and relay. If the employee voluntarily provides medical information, it is not allowed to share or record the information. This includes writing the information down.

You are allowed and encouraged to ask whether the cause of illness is work-related.

I think my employee is not actually sick. How can I confirm that they are indeed sick?

You, as the employer, are not allowed to determine whether the employee is sick. If you have doubts concerning their illness, you should contact the company doctor. The company doctor can determine whether the employee is sick, for how long it is expected that they will be sick and what reintegration measures he advises.

Do I have to pay my employee salary during their illness?

In principle, yes. During illness you have to continue paying at least 70% of your employee’s salary for two years. It is common that the collective labour agreement or the employment agreement states that during the first year of illness 100% of the salary is owed. The period of two years can be lengthened by UWV if the reintegration measures taken were not sufficient. There are also circumstances that release the employer from their duty to continue paying salary. 

Can I fire my employee during their illness?

In principle, no. During the first two years of illness, Dutch law recognizes a prohibition to terminate during illness. After two years, the employer may terminate the employment contract. During the two years, it is still possible for the employer and employee to agree to end the employment contract. This may be disadvantageous. Under exceptional circumstances, summary dismissal may also be possible.  

What do I do if my employee is sick long-term?

An employee is sick long-term if it is expected that they will not fully recover within 4 weeks. The company doctor can determine this expectation. For long-term sickness, in principle the following steps will have to be taken:

  • Start of illness:
    • Reporting to the company doctor that the employee is sick
  • 6 weeks: 
    • Problem Analysis (in Dutch: Probleemanalyse) by the company doctor
  • 8 weeks:
    • Action Plan (in Dutch: Plan van Aanpak) by the employer and employee based on the Problem Analysis 
    • Every 6 weeks: evaluating the Action Plan
  • 42 weeks:
    • Reporting to the UWV that the employee is sick long-term
  • 52 weeks:
    • First year evaluation (in Dutch: Eerstejaarsevaluatie)
  • 88 weeks:
    • WIA-application
  • 91 weeks:
    • Final evaluation (in Dutch: Eindevaluatie)
  • 93 weeks:
    • Submitting the re-integration report (in Dutch: Re-integratieverslag) in light of the WIA-application.
  • 104 weeks:
    • End of the duty to continue paying salary and the prohibition of terminating the sick employee’s employment contract. There are exceptions: salary penalty (in Dutch: loonsanctie), the employee is expected to recover within 26 weeks, other exceptions.

A sick employee wants to quit. Should I agree to this?

An employee is always allowed to quit (taking into account notice periods and such). However, when an employee is sick, the employer may not act like a good employer by agreeing to ending the employment contract. The employer is obligated to inform the employee of the consequences of quitting whilst sick, including the loss of unemployment benefits (in Dutch: Werkloosheidswet-uitkering) and sickness benefits (in Dutch: Ziektewet-uitkering). The employer has to verify that the employee understands these consequences.

Ending the employment contract

What possibilities are there when it comes to ending the employment contract with my employee?

  • Operation of law for fixed term contracts
  • Termination, requiring either a permit from the UWV or a court decision
  • Mutual agreement
  • Summary dismissal

For a detailed oversight, click here.

Can I offer my employee a settlement agreement instead of terminating their employment contract?

Yes. In fact, in principle it is advisable to try to offer a settlement agreement before terminating the employment contract. This can save both the employer and the employee money, effort and time.

Do I have to take into account the notice period in a settlement agreement?

No, however, it is advisable to take the notice period into account. After all, the employee is not entitled to unemployment benefits if they agree to a settlement agreement that does not take the notice period into account. Therefore, they will most likely not agree to the offer.

Do I have to pay my employee a severance payment?

That depends. If you terminate the employment agreement (with the exception of termination on the grounds of gross misconduct or negligence) or do not provide a subsequent employment contract after a fixed employment contract comes to an end, a severance payment is owed. A severance payment is not owed in the case of summary dismissal. It is also not owed when the employment contract is ended by mutual agreement via a settlement agreement. However, in this case, the employee will most likely not agree to the settlement agreement without a remuneration equal or higher than the owed severance payment.

Can I fire my employee with immediate effect?

Summary dismissal, termination during a probationary period and mutual agreement can all lead to termination with immediate effect. Please note that summary dismissal is only possible in extraordinary circumstances and that when ending the employment contract with mutual agreement via a settlement agreement, the employee will most likely require the notice period to be respected, as otherwise they will be forfeiting their right to unemployment benefits.

My company is in financial trouble. Can I fire my employees?

When a company is in financial trouble, it may be possible to fire employees. This is called termination due to economic reasons. However, please note that there are strict rules concerning the order in which employees can be fired. The employer may not simply choose who has to leave. 

Can I prevent my employee from working for a competitor if they leave?

It is possible to include a non-competition clause in the employment contract, forbidding an employee from working for a competitor after their employment contract ends. The clause may not be too broad, meaning it needs to be limited in space and time. The scope of the required limitations depends on the circumstances.