New Bill with Consequences for Flexible Labor

On 29 November 2013 the Dutch Minister of Social Affairs Asscher sent the bill ‘Work and Security Act’ (Wet Werk en Zekerheid) to the Lower House of Parliament. The bill partly elaborates on the ‘Social Agreement’ reached by the social partners in the spring of 2013. If the bill ‘Work and Security Act’ is adopted, this will result in a radical reform of Dutch labor law. Below you will find an overview in broad outline of the most important changes in respect of flexible labor and the proposed date of their entry into force.

Flexible Labor Measures

• Provisions on succession of fixed-term employment contracts: successive fixed-term employment contracts will automatically be converted into permanent employment contracts after two years already. Currently, this happens only after three years. Furthermore, these contracts will also be deemed to be successive contracts if they are interrupted by a period of less than six months. Currently, this term is three months. Also, the possibility to depart from this regulation in a collective labor agreement (CAO) will be limited.
• Probationary period: a probationary period may no longer be stipulated in fixed-term employment contracts of six months or less.
• Non-Competition Clause: it is no longer allowed to include a non-competition clause in a fixed-term employment contract, unless it is substantiated in writing in this contract that a serious interest of the business or the service requires this clause to be included. When the employer relies on the non-competition clause, he must be able to prove that these interests still exist.
• Notification period: from now on the employer must notify the employee in writing whether or not the contract will be continued no later than one month before the end of the fixed-term employment contract. Moreover, if it is to be continued, the employer must inform the employee under what conditions this will be.
• Entry into effect: the proposed commencement date of these changes is 1 July 2014. If the bill is adopted before this date, this would mean that the new law will apply to employment contracts concluded on or after 1 July 2014. An exception to this rule may exist when at that time a CAO still applies in which the provision concerned was lawfully deviated from. With regard to the provisions on succession of fixed-term employment contracts, transitional law provides that the former legislation continues to apply to fixed-term employment contracts concluded before 1 July 2014 and exceeding the period of two years on or after this date. This means that after this employment contract has ended the parties may still choose to continue their relationship or not. With regard to the notification period, a transitional rule provides that the employer does not have to observe this period for employment contracts ending within one month after the entry into force of the Act. If we assume the date of entry into force to be 1 July 2014, the new notification period would therefore not apply to employment contracts ending on 31 July 2014 or earlier.

Should you have any questions with regard to the above, please do not hesitate to contact the Startup Team.