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Non-compete clause no longer allowed in Dutch fixed term employment contracts

Non-compete clause no longer allowed in Dutch fixed term employment contracts

Non-compete clauses will in principle no longer be allowed in Dutch fixed term employment agreements as per the 1st of January 2015.

At the moment it is still allowed to include a non-competition clause in any employment agreement, regardless whether it is an employment agreement for a definite period or an indefinite period. However, as per the 1st of January 2015 it will in principle be merely possible to include a non-competition clause in a permanent employment contract.

Non-competition clause in temporary contract

Non-competition clauses will in principle no longer be allowed in temporary contracts, unless there is a written statement of the employer included that shows that the competition clause is necessary due to compelling business interests or compelling service interests. The compelling business or service interests should be present not only at the time of conclusion of the non-compete clause, but also at the moment when the non-compete clause is called upon.

Fixed term contracts entered into before January 1, 2015

The new rules will merely apply to fixed term employment contracts which were entered into on or after the 1st of January 2015. The new rules will not apply to employment contracts which were entered into before the 1st of January 2015, but take effect on or after the 1st of January 2015. It will thus still be possible to include a non-compete clause in a fixed term employment contract as per 1 January 2015 or later if this employment contract has been agreed upon before the 1st of January 2015.

More amendments as per the 1st of January 2015

Non-compete clauses are not the only clauses which will be restricted as per the 1st of January 2015. Also probationary periods will be restricted as per the 1st of January 2015: probationary periods will no longer be allowed in Dutch fixed term employment contracts of up to six months. Furthermore, a duty to notify will be introduced for fixed term employment contracts as per January 1, 2015.

Amendments as per July 1, 2015 and January 1, 2016

The above mentioned amendments will enter into force as per January 1, 2015.  However, the same Bill introduces other changes, which will be effective as per July 1, 2015 and January 1, 2016. For example, as per  the 1st of July 2015, there will be an amendment to the rules which stipulate when an employment agreement for a limited duration will convert in an employment agreement for an unlimited duration.

As per July 1, 2015 also the most drastic changes will become effective. As per that date drastic changes to Dutch dismissal law will enter into force. As per the 1st of January 2016 the rules regarding unemployment benefits wil be amended.

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We are happy to inform you about the amendments in Dutch dismissal law and other amendments in Dutch employment law by posting blogs about these amendments. If you want to be informed about these amendments please visit this website on a regular basis or make sure that you receive these blogs by subscribing to our newsletter, follow me on twitter, add me to your circle at Google+ and/or connect with me on LinkedIn.

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