The duty to notify is being introduced in Dutch employment law: as per the 1st of January 2015 an employer will be obliged to notify an employee, who works on the basis of a fixed term employment contract, which expires by operation of law as per the termination date, ultimately one month prior to this termination date whether or not the contract will be continued. The notification must be done in writing.
If the employer informs the employee that it wants to continue the employment contract the employer must – also ultimately one month prior to the termination date – specify the conditions under which the employer wishes to continue the contract.
Duty to notify and exceptions to it
The duty to notify does not apply when it concerns an employment contract for a definite period that does not terminate on a calendar date, for example a contract for the duration of a particular project or to replace an employee who is not capable to work due to illness. Furthermore, the duty to notify does not apply if it concerns a temporary employment contract concluded for less than six months. Even if it concerns a second or third employment contract concluded for less than six months the duty to notify does not apply. Finally, the duty to notify does not apply if it concerns a temporary agency work employment contract including an agency clause.
To notify upon entering into the fixed term contract
The employer is allowed to notify the employee upon entering into the fixed term employment agreement that there will be no successive employment agreement. If the employer already knows at the conclusion date of the employment agreement that no successive employment agreement will be concluded the employer can already at that moment notify the employee in writing that the employment agreement will not be continued, for example by mentioning this in the written employment agreement.
Compensation for violation of the duty to notify
In case the employer does not notify the employee at all, the employer is obliged to pay the employee a compensation equal to the salary of one month. In case the employer does notify the employee, but too late, the employer is obliged to pay the employee a compensation equal to the salary due during the period the employer was too late. For example, if the employer notified the employee one week too late the employer should pay the employee a compensation equal to the salary of one week.
The compensation is merely not due in the event of bankruptcy, suspension of payment or debt restructuring. The employee can obtain the compensation by submitting a request to the cantonal court. This should be done within three months after the day on which the employer should have notified the employee and thus within two months after the termination date of the fixed term contract concerned.
Compensation does not effect social security benefits
The compensation does not effect the entitlement to social security benefits, like unemployment benefits. The compensation will not be deducted from the social security benefits payment nor will the compensation result in the employee being entitled to social security benefits as per a later date. The employee will be entitled to the same social security benefits payments he or she would be entitled to in case the employer would have had observed the duty to notify.
Employment agreement continued after termination date
If the employer did not notify the employee whether it wanted to continue the employment agreement or did so, but did not specify the conditions under which it wanted to continue the employment agreemend and the employment agreement was continued after the termination date the employment agreement shall deemed to be continued for the same time, but for a maximum of one year, under the same terms as the previous employment agreement.
In case the employer did not notifiy the employee or too late the employee is entitled to the compensation as mentioned above as the compensation is due regardless of whether the employment agreement will be continued or not.
To notify totally different than to give notice
Please note: to notify is something totally different than to give notice. The duty to notify has to do with an employment agreement for a limited duration which expires by operation of law. To give notice is one of the two existing dismissal routes for unilateral termination of an employment agreement, which usually requires from an employer that permission to give notice has been obtained from the governmental body UWV. Furthermore, other requirements apply in case an employment agreement is terminated by giving notice, like having to observe a notice period and a notification period.
It is confusing that also in the case an employment agreement is terminated by giving notice a notice period and usually also a notification period should be observed. However, the notice period and notification period which have to be observed in case of termination by giving notice are different than the duty to notify which has to be observed in case of a temporary employment contract. Please bear in mind that although similar words are being used the rules which apply in these situations are very different.
The fixed term employment agreement still expires by operation of law. Also in case the employer fails to notify the employee (timely). Failure to observe the duty to notify results in having to pay a compensation. It does not effect the expiration of the fixed term employment agreement by operation of law as per the termination date, unless the employee continues to work after the termination date. In that case the employment agreement shall deemed to be continued for the same time, but for a maximum of one year, under the same terms as the previous employment contract.
Entry into force of duty to notify
The duty to notify enters into force the 1st of January 2015. This means that the duty to notify will not apply to fixed term employment contracts which terminate in January 2015 as one month earlier, in December 2014, the duty to notify did not apply yet. However, the duty of notification will apply to fixed term employment agreements which terminate on or after February 1, 2015. For a temporary employment contract which ends on February 1, 2015 the employer should fulfill its duty to notify no later than January 1, 2015.
Other amendments as per January 1, 2015
The introduction of a duty to notify is not the only amendment to Dutch employment law as per the 1st of January 2015. Furthermore, non-compete clauses will in principle no longer be allowed in Dutch fixed term employment agreements 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 as per the 1st of January 2015.
Amendments as per July 1, 2015 and January 1, 2016
The above mentioned amendments will become effective as per January 1, 2015. However, the same Bill introduces other changes, which will enter into force as per July 1, 2015 and January 1, 2016. The most drastic changes, namely completely different rules regarding dismissal, will enter into force as per July 1, 2015.
Other amendments to Dutch employment law as per the 1st of July 2015 will be for example the rules which stipulate when an employment agreement for a limited duration will convert in an employment agreement for an unlimited duration. As per January 1, 2016 the rules regarding unemployment benefits wil be amended.
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