In Dutch law, there are three main types of agreements for business-related activities. The most common is the employment agreement, which outlines employment terms and conditions. The assignment agreement is used for freelance, consultancy, or management services to avoid an employment agreement. The contracting agreement is used for constructing physical items.
Employment agreements require in-person work for payment and the authority of the other party to give instructions. Other agreements may not have these features. While written employment agreements are not legally required, Dutch labor law obligates employers to provide certain written information to employees, such as job title, start date, salary, working hours, and holiday entitlements.
Additionally, if an individual works at least 20 hours per month for three consecutive months, Dutch labor law assumes the existence of an employment agreement. The contracted work in a month is considered the average working period over the previous three months.
The law that governs an employment relationship is typically based on the country where the work is performed. Parties involved in an employment agreement usually have the freedom to choose the governing law, but European legislation limits the impact of this choice in international employment agreements. Mandatory provisions of any member state’s law cannot be overridden by the choice of law. These mandatory rules are non-negotiable and provide protections for employees. In Dutch labor law, for example, certain provisions regarding termination of employment are mandatory.
When negotiating employment terms, both Dutch labor law and relevant collective labor agreements impose constraints. These include mandatory rules that dictate various terms and conditions of employment.
On July 1, 2023, the minimum wages was further increased by 3.13 percent. This increase follows the significant rise of 10.15 percent that took place on January 1, 2023.
Employment Law Regulations
In the Netherlands, employment relationships are primarily governed by the Dutch Civil Code, prioritizing employee protection. Various regulations like the Work and Care Act, Working Conditions Act, along with Collective Labor Agreements, play a role in regulating employment. As Europe becomes more unified, Dutch regulations are increasingly influenced by European treaties and case law.
Collective Labor Agreements (CAOs)
In the Netherlands, collective labor agreements (CAOs) play a vital role in employment agreements, alongside the Dutch Civil Code and other legislation. CAOs are negotiated between employers and employee representatives to establish consistent employment conditions within specific industries or companies. They can apply either industry-wide or to a specific company. When an individual employment agreement contradicts the employee’s rights outlined in a relevant CAO, the CAO provisions take precedence, and the conflicting provisions in the employment agreement are deemed void.
According to Dutch law, employers bear the responsibility for organizing work in a way that prioritizes employee safety, health, and well-being, following established statutory standards. Dutch worker safety and health regulations are highly regarded compared to international standards. However, the Dutch Government has taken steps to simplify and align these regulations with international norms.