Employment law Eindhoven matters to every employer and employee in the region. Employment disputes are among the most common legal matters in the Netherlands – and among the most misunderstood. Employees often do not know what they are entitled to when dismissed. Employers frequently underestimate the procedural requirements for ending a contract. Both groups are regularly presented with documents – a settlement agreement, a non-competition clause, a dismissal letter – that they sign without fully understanding the consequences.
This article sets out the core of Dutch employment law as it applies in Eindhoven and the wider Noord-Brabant region, for both employees and employers. It covers the key rights, obligations, and procedures – and flags where the practical risks tend to cluster.
When does Dutch employment law apply?
Dutch employment law is primarily governed by Book 7 of the Burgerlijk Wetboek, supplemented by sector-specific collective labour agreements (CAOs), the Wet werk en zekerheid (WWZ), and European directives transposed into Dutch law. As a general rule, Dutch employment law applies when work is performed primarily in the Netherlands – regardless of where the employer is incorporated or where the contract was signed. For international workers and foreign employers, this is not always intuitively obvious, and the precise answer depends on the facts of each situation. This is discussed further in the section on international workers below.
For employees: key rights under Dutch labour law
Protection against dismissal
Dutch law does not permit at-will employment. An employer cannot dismiss an employee without a legally valid ground and, in most cases, without prior approval from either the UWV (the national employment authority) or the cantonal court. The legally recognised grounds for dismissal are set out in the Burgerlijk Wetboek and include, among others:
- Economic or business reasons – restructuring or redundancy due to changed business conditions.
- Long-term illness – after two years of continuous sick leave.
- Underperformance (disfunctioneren) – but only after a documented improvement trajectory. Without adequate documentation, a dismissal on this ground will usually not survive court scrutiny.
- Serious misconduct (verwijtbaar handelen).
- An irreparably damaged working relationship (verstoorde arbeidsrelatie).
Each ground has its own procedural requirements, and what counts as sufficient substantiation depends on the specific circumstances. Employment law is in practice highly casuistic – the outcome of a disputed dismissal often turns on details of documentation, timing, and procedure.
Transition payment (transitievergoeding)
Since 2020, an employee whose contract is terminated by the employer is in principle entitled to a statutory transition payment, regardless of the length of service or the reason for termination. The statutory calculation is one-third of a gross monthly salary per year of service. The transition payment is also due in principle when a fixed-term contract is not renewed at the employer’s initiative. The precise calculation and any applicable exceptions depend on the facts; the statutory maximum is updated annually.
Non-competition clauses (concurrentiebeding)
Non-competition clauses are common in Dutch employment contracts, but their enforceability is strictly limited by statute and by court practice. A few important points:
- In indefinite-term contracts, a written non-competition clause is in principle valid if the employee is 18 or older.
- In fixed-term contracts, a non-competition clause is only valid if accompanied by a written justification of serious business interests (zwaarwegend bedrijfsbelang). Without that justification, the clause is unenforceable.
- Courts frequently reduce the scope, geographical reach, or duration of non-competition clauses they consider disproportionate.
Before resigning when bound by a non-competition clause, employees would be well advised to obtain legal advice. Violating an enforceable clause can result in substantial contractual penalty payments.
Sick pay and sick leave (loondoorbetaling bij ziekte)
Dutch law requires employers to continue paying a sick employee’s salary for up to two years. The statutory minimum is 70% of the last-earned salary, though the first year is often guaranteed at 100% by CAO or contract. During this period, both parties must cooperate in reintegration efforts under the Wet verbetering poortwachter. Employees who believe their employer is failing to meet these obligations – or who suspect illness is being used as a pretext for dismissal – can report to the UWV and, where appropriate, pursue claims at the cantonal court.
Wage and payment claims
Unpaid wages, holiday allowance (vakantiegeld), and accrued vacation day payments are enforceable claims. The cantonal court handles wage disputes relatively quickly, and employees who prevail are typically awarded statutory interest on delayed payments.
For employers: key obligations under Dutch labour law
Employment contract requirements
Dutch law requires written employment contracts. Since August 2022, EU Directive 2019/1152 on transparent and predictable working conditions requires employers to provide detailed written information about working conditions – including working location, probation period, applicable CAO, training rights, and notice periods – within the first day of employment. Fixed-term contracts can be chained up to three times for a maximum total period of three years. After the third contract or after three years, whichever comes first, the employment relationship becomes indefinite by operation of law (ketenregeling).
Collective labour agreements (CAO)
Many sectors in the Netherlands operate under a CAO that sets mandatory minimum employment conditions: pay scales, working hours, additional leave, and more. Where a CAO applies to a company’s sector, its minimum standards are binding even if the individual employment contract does not reference it. Employers in Eindhoven and the Noord-Brabant region frequently operate under CAOs covering manufacturing, technology, logistics, and professional services. Not knowing that a CAO applies is not a defence against a claim.
Dismissal routes explained
The Netherlands operates a dual-track dismissal system unique in Europe. The route an employer must follow depends on the ground for dismissal. Using the wrong route can result in the termination being set aside, which is why choosing the correct procedure from the outset is critical.
UWV procedure – Required for economic dismissals and dismissals following two years of long-term illness. The UWV reviews the grounds, the redundancy selection method (afspiegelingsbeginsel), and the supporting documentation. Its permission (ontslagvergunning) is a prerequisite before the contract can be terminated.
Cantonal court (kantonrechter) – Required for dismissals on personal grounds: underperformance, serious misconduct, or a disrupted employment relationship. The employer files a dissolution request (ontbindingsverzoek) and the court assesses whether the grounds are substantiated and whether fair procedure was followed. The cantonal court in ’s-Hertogenbosch handles employment matters from Eindhoven.
Instant dismissal (ontslag op staande voet) – Only permitted for urgent cause (dringende reden): serious misconduct making continuation of employment immediately untenable. The bar is high: the grounds must be specific and documented, and the dismissal must be effected immediately upon discovery. An improper instant dismissal can expose the employer to claims for lost wages and damages.
Employers must also give employees written notice (aanzegging) at least one month before the end of a fixed-term contract if it will not be renewed. Failure to do so results in a liability for one month’s salary (aanzegvergoeding).
Sick leave and reintegration
The two-year sick pay obligation is one of the most demanding aspects of Dutch employment law for employers. During this period, both employer and employee must actively cooperate in a structured reintegration process under the Wet verbetering poortwachter. This involves a problem analysis (probleemanalyse), a plan of action, interim evaluations, and ultimately a reintegration report. Failure by the employer to comply with these obligations can result in the UWV imposing an extension of the salary payment obligation beyond two years – a sanction with significant financial consequences. Employees who are pressured during sick leave, or who believe reintegration obligations are not being met, have enforcement options via the UWV.
Practical tips before signing a VSO or non-compete
Two documents employees are regularly asked to sign without adequate review are the settlement agreement (vaststellingsovereenkomst, VSO) and the non-competition clause. Both can have lasting consequences.
A VSO is a mutual termination agreement that ends the employment relationship by consent. Signing means giving up the right to contest the dismissal in court. In exchange, the employee typically receives a transition payment and agreed terms on the end date, references, and confidentiality. Dutch law provides a statutory cooling-off period of 14 days after signing during which the employee can withdraw consent without giving reasons. This period exists precisely to allow for legal review – and it should be used.
A non-competition clause presented at the start of employment is easily overlooked. Its consequences become relevant only when the employee wants to change jobs – often years later. Whether the clause is enforceable, how broad its scope really is, and whether a court would reduce it are questions that an employment lawyer can assess before the clause becomes a problem.
International workers in Eindhoven
Eindhoven’s technology sector – centred on ASML, NXP, DAF, and a large network of suppliers and high-tech companies – employs a significant and growing proportion of international workers. For this group, and for the international employers who hire them, several specific questions arise under Dutch employment law.
- Which country’s law applies? Where work is performed primarily in the Netherlands, Dutch employment law will generally apply – regardless of the employer’s country of incorporation or the country where the contract was signed. The precise answer depends on the circumstances, and legal advice is recommended where there is any doubt.
- Posted workers (gedetacheerden): International workers posted to the Netherlands by a foreign employer must under the WagwEU receive at least Dutch minimum employment conditions during their posting, regardless of what their home-country contract provides.
- Language of proceedings: Cantonal court proceedings are conducted in Dutch. International employees pursuing employment claims need representation by a Dutch employment lawyer – not a labour consultant or HR adviser.
How we can help
Law & More is a Dutch law firm with offices in Eindhoven (Marconilaan 13) and Amsterdam. The employment law team advises both employees and employers in Dutch and English across the full range of Dutch labour law matters.
For employees
- Assessment and negotiation of dismissal and settlement agreements (VSO).
- Transition payment and additional compensation claims.
- Non-competition clause disputes.
- Unpaid wages, holiday allowance, and contract disputes.
- Sick pay and reintegration disputes.
- Summary proceedings (kort geding) for urgent employment matters.
For employers
- Drafting and reviewing employment contracts and CAO compliance.
- Dismissal procedures via the UWV and cantonal court.
- Disciplinary procedures and documentation.
- Restructuring and collective redundancy (collectief ontslag).
- Employment advice for international companies operating in the Netherlands.
Law & More can be reached 24/7 at +31 40 369 06 80 or by email at [email protected].
Frequently asked questions
Can an employer in the Netherlands dismiss an employee without reason?
No. A legally valid ground is required, and in most cases prior approval from the UWV or cantonal court is a prerequisite. At-will dismissal does not exist in Dutch employment law.
I have received a settlement agreement. Do I have to sign it?
No. A VSO requires your consent. You are entitled to 14 days to reconsider after signing. Before signing, have the agreement reviewed by an employment lawyer; the terms, including the transition payment amount, the end date, and any confidentiality or non-disparagement clauses, are often negotiable.
How is the transition payment calculated?
The statutory basis is one-third of a gross monthly salary per year of service, with a proportional amount for partial years. There is no minimum service period. The statutory maximum is updated annually, and the precise calculation can depend on the facts of the case.
My employer wants to include a non-competition clause in my contract. What should I check?
Check the scope (which activities are restricted), the geographical reach, and the duration. In a fixed-term contract, also verify whether a written justification of serious business interests is included; without it, the clause is unenforceable. Courts regularly reduce clauses that are broader than necessary to protect a legitimate business interest.
Does Dutch employment law apply if my employer is based abroad?
Generally yes, if you work primarily in the Netherlands, but the precise answer depends on the facts of your situation. The country of incorporation of your employer and the country where your contract was signed are not decisive.
What is the difference between the UWV route and the cantonal court route?
The UWV route applies to economic dismissals and dismissals following long-term illness. The cantonal court route applies to dismissals on personal grounds: underperformance, serious misconduct, and disrupted employment relationships. Using the wrong procedure can result in the termination being set aside.
