Employment in the Netherlands: contracts, rights and dismissal

Employment in the Netherlands rests on the employment contract (arbeidsovereenkomst) defined in article 7:610 of the Dutch Civil Code: an agreement under which one person performs work for another, in the other party’s service, in return for pay. Where those three elements are present, the whole body of Dutch employment law applies, including dismissal protection, continued payment during sickness, statutory holiday and the rules of the applicable collective labour agreement. What the parties call the arrangement is irrelevant; how it works in practice decides.

This guide sets out how employment relationships are formed in the Netherlands, which contract types exist, what employees are entitled to, what employers must arrange, and how an employment contract can lawfully be ended. It is written for international employers hiring in the Netherlands and for employees who want to know where they stand.

When is there an employment contract

Article 7:610 BW sets three cumulative requirements: work personally performed by the employee, wages paid by the employer, and a relationship of authority (gezagsverhouding) in which the employer can give instructions about the work. The Supreme Court assesses all the circumstances of the case together, including how the parties actually behaved, the way the work is organised and embedded in the business, and whether the worker runs any genuine entrepreneurial risk. The label on the contract carries little weight, and an intention to avoid employment status carries none.

That test matters most where a business engages self-employed contractors. If the arrangement in fact meets the three requirements, there is an employment contract, with all that follows: payroll tax and social security contributions, dismissal protection, holiday entitlement and pension obligations. The enforcement moratorium on the Assessment of Employment Relationships (Deregulation) Act ended on 1 January 2025, so the Dutch Tax Administration can once again act against false self-employment (schijnzelfstandigheid) in the normal way. A further bill introducing a legal presumption of employment below a set hourly rate has been adopted and published in the Bulletin of Acts and Decrees, but it enters into force by royal decree; until that moment the assessment rests entirely on article 7:610 BW and the case law.

The consequences of getting this wrong fall on the employer. Reclassification means retroactive payroll taxes and contributions, a possible claim for back pay and holiday allowance, and a worker who suddenly enjoys full dismissal protection. Our overview of Dutch employment law explains the wider framework, and our page on Dutch law explained puts it in context.

Contract types and how long a fixed term can last

Dutch law recognises two basic forms: the contract for a definite period (bepaalde tijd) and the contract for an indefinite period (onbepaalde tijd). A contract can be concluded orally, but article 7:655 BW obliges the employer to inform the employee in writing about the essential terms, including the function, the pay and its components, the working time pattern, the holiday entitlement, the notice periods and the training the employer provides. Since the implementation of the EU directive on transparent and predictable working conditions, that information duty is broader and comes with short deadlines.

The chain rule (ketenregeling) of article 7:668a BW limits the use of successive fixed-term contracts. A fourth consecutive contract, or a chain that exceeds three years, converts by operation of law into a contract for an indefinite period. Contracts count as consecutive if the gap between them is six months or less. A collective labour agreement may deviate from the chain rule within statutory limits, and a longer interruption period applies to certain seasonal work. The Act on more security for flexible workers, which will lengthen the interruption period to three years, has been adopted; it enters into force by royal decree, so the six-month period continues to apply until then.

• A fixed-term contract of six months or longer ends automatically, but article 7:668 BW requires the employer to notify the employee in writing at least one month before the end date whether the contract will be continued and on what terms; failing to do so costs one month of salary.
• A fixed-term contract can only be terminated early by notice if that possibility was agreed in writing (a tussentijds opzegbeding).
• No probationary period may be agreed in a contract of six months or less; the maximum is one month for contracts shorter than two years and two months for longer or indefinite contracts (article 7:652 BW).

Our article on the fixed-term employment contract works through the chain rule in detail.

Part-time, on-call and agency work

Part-time employment is the norm rather than the exception in the Netherlands. Article 7:648 BW prohibits any distinction based on working hours, so a part-time employee receives pay, holiday, holiday allowance and pension on a pro rata basis and enjoys exactly the same dismissal protection as a full-time colleague. Employees also have a statutory right to ask for a change in working hours, place of work or working pattern, which the employer may only refuse on compelling business grounds.

On-call work is regulated more tightly than its reputation suggests. Under article 7:628a BW an employee who is called up must be given at least four days notice; if the employer cancels within that period, the employee is still entitled to the pay for the hours called. After twelve months the employer must offer the on-call worker a fixed number of hours, based on the average worked in the previous year. Our article on the zero-hours contract sets out how these rules work in practice.

Temporary agency work (uitzendwerk) places the worker in a triangular relationship: the agency is the legal employer, the hirer directs the work. The agency sector has its own collective labour agreement and its own statutory regime. Under the Act on admission of labour intermediaries, agencies must register with the admission authority between 1 November and 31 December 2026; the Act enters into force on 1 January 2027 and enforcement starts on 1 January 2028. Businesses that hire agency staff will then have to check that their supplier is admitted.

What employees are entitled to

The statutory floor applies to every employee, and a collective labour agreement or an individual contract may only improve on it. The core entitlements are these.

• Pay. Since 1 January 2024 the statutory minimum wage is expressed as a minimum hourly wage for all employees. The amounts are adjusted twice a year, on 1 January and 1 July, and published by the Ministry of Social Affairs and Employment. Holiday allowance of at least eight per cent of the gross annual salary is due under the Minimum Wage and Minimum Holiday Allowance Act.
• Holiday. Article 7:634 BW gives every employee at least four times the agreed weekly working hours in paid holiday each year. Statutory days lapse six months after the end of the year in which they were accrued unless the employee was unable to take them; days granted on top of the statutory minimum are subject to a five-year limitation period.
• Sickness. Article 7:629 BW obliges the employer to continue paying at least seventy per cent of wages for up to 104 weeks of incapacity, with at least the minimum wage in the first year. Both parties have reintegration duties under the Gatekeeper Improvement Act, and a dismissal ban applies during the first two years of illness.
• Working time. The Working Hours Act caps the working day and the working week and prescribes minimum rest periods and breaks. Night work and work by young employees are subject to stricter limits.
• Leave. The Work and Care Act provides pregnancy and maternity leave, birth leave for partners, additional partly paid birth leave, paid parental leave, adoption leave, and short-term and long-term care leave.
• Equal treatment. Distinctions on grounds of religion, belief, political opinion, race, sex, nationality, sexual orientation, civil status, disability, chronic illness, age, working hours and type of contract are prohibited by the equal treatment legislation.
• Privacy. Employee monitoring, screening and personnel files fall under the GDPR and the Dutch GDPR Implementation Act; the works council has a right of consent for any monitoring arrangement. See our page on data protection.

Which of these rights are improved upon in a given case depends on the collective labour agreement. Our overview of employee rights in the Netherlands goes through them one by one.

What employers must arrange

An employer hiring in the Netherlands takes on a set of obligations that begin before the first working day. Identity must be established and recorded from an original identity document, and the right to work must be verified. Nationals of the EU, the EEA and Switzerland need no permit. Other nationals generally require a residence permit combined with a work permit, or a single permit covering both; the highly skilled migrant route runs through a recognised sponsor, and the salary criteria are set annually by the Immigration and Naturalisation Service. Employing someone without the required permit exposes the employer to substantial administrative fines under the Foreign Nationals (Employment) Act. Our pages on the work permit and on Dutch immigration law set out the routes.

From the start of employment the employer withholds payroll tax and national insurance contributions and pays employer contributions for employee insurance schemes. Whether a pension scheme is compulsory depends on the sector: many industry-wide pension funds have been declared mandatory, and an employer that overlooks this can face years of back contributions.

Health and safety are governed by the Working Conditions Act. The employer must carry out a risk inventory and evaluation, act on it with a plan of approach, arrange access to a company doctor or occupational health service, appoint a prevention officer, and give employees instruction about the risks of their work. The Netherlands Labour Authority supervises compliance and can impose fines and order work to be stopped where there is serious danger. Employees are expected to follow safety instructions and to report hazards.

Employers must also keep proper records: working hours, pay slips, holiday balances and the personnel file. Sound documentation is not administrative decoration. In dismissal cases the employer bears the burden of proving the ground it relies on, and a file that starts only after the decision to dismiss has been taken is rarely enough.

Ending an employment contract

Dutch dismissal law is closed: the employer may only end an employment contract by one of the routes the law provides, and the route follows from the reason. There is no dismissal at will.

• Mutual consent. The parties conclude a vaststellingsovereenkomst (settlement agreement). The employee has a statutory reflection period of fourteen days in which the agreement can be revoked without giving reasons. Drafted correctly, and with a neutral ground and the notice period observed, it normally preserves entitlement to unemployment benefit. See our page on the settlement agreement.
• Permission from the UWV. Required for dismissal on business-economic grounds and for long-term incapacity for work. After permission is granted the employer gives notice.
• Dissolution by the subdistrict court. Required for all personal grounds, such as unsatisfactory performance, a damaged working relationship, culpable conduct, refusal on grounds of conscience, or a combination of grounds that together justify dismissal.
• Notice during the probationary period, which may be given by either party at any moment and without a reason, provided a valid probationary period was agreed in writing.
• Summary dismissal (ontslag op staande voet) for an urgent cause, given without delay and with the reason stated at once. It is a heavy instrument and frequently fails in court.

Statutory notice periods are set in article 7:672 BW and depend on length of service: one month for less than five years, two months for five to ten years, three months for ten to fifteen years and four months from fifteen years. These are the periods for the employer. The employee owes one month unless a longer period was agreed in writing, and if the employee period is extended, the employer period must be at least double. Notice is normally given against the end of the calendar month.

An employee whose contract is ended at the employer’s initiative is entitled to the transitievergoeding (transition payment) under article 7:673 BW. It accrues from the first working day, so it is also due when the contract ends during the probationary period, and it is calculated on length of service and salary. The statutory maximum is indexed annually and published by the Ministry of Social Affairs and Employment. Entitlement lapses in the event of seriously culpable conduct by the employee, and in an insolvency no claim to the transition payment can be enforced against the wage guarantee scheme.

Deadlines are short and unforgiving. A request to set aside a dismissal, or a claim for fair compensation, must be filed with the subdistrict court within two months of the end of the contract; a claim for the transition payment must be brought within three months. These are limitation periods that cannot be repaired afterwards.

Collective labour agreements and employee representation

A collective labour agreement (collectieve arbeidsovereenkomst, CAO) is a contract between one or more trade unions and an employer or an employers organisation. It binds the members of the parties to it, and in practice employers apply it to all their staff. The Minister of Social Affairs and Employment can declare a sector agreement generally binding, in which case it also applies to employers in that sector who are not members of any signatory organisation. Checking whether a generally binding agreement covers your activities is one of the first things a foreign employer should do, because it can change pay scales, working time, notice periods and pension obligations at a stroke.

A collective agreement may improve on the statutory minimum and, on a limited number of points identified in the legislation itself, deviate from it. It cannot reduce rights that the law declares mandatory. Where the individual contract and the collective agreement conflict, the collective agreement prevails on any point it covers. Our explanation of terms and conditions deals with the contractual side.

Employee participation runs through the works council. Under the Works Councils Act an employer with at least fifty employees must establish one; between ten and fifty employees a staff representative body may be set up, and employees may in any event request a meeting twice a year. The works council has a right of advice on major economic decisions such as a reorganisation, a transfer of the business or a significant investment, and a right of consent on personnel policy instruments including working time schemes, appraisal systems, absence policy and any form of employee monitoring. A decision taken without the required advice can be challenged before the Enterprise Chamber (Ondernemingskamer) of the Amsterdam Court of Appeal.

Where disputes arise and what to do

Most employment disputes in the Netherlands fall into three groups: pay, treatment at work, and the end of the contract. The practical response differs for each, but the first step is always the same, which is to put the complaint in writing and keep the correspondence.

Unequal treatment and discrimination

Record each incident with dates, what was said or done, and who was present. Raise it internally first, through the complaints procedure, the confidential adviser or the works council. If that leads nowhere, the Netherlands Institute for Human Rights can give a non-binding opinion on whether the equal treatment legislation has been breached, free of charge, and such an opinion carries weight in later proceedings. The civil court can award damages. In discrimination cases the burden of proof is shared: once the employee puts forward facts that suggest a distinction was made, it is for the employer to prove that it was not.

Pay and working time

Collect the pay slips, the record of hours actually worked and the relevant contract or collective agreement provisions, and set out the discrepancy in writing to the employer. The Netherlands Labour Authority enforces the minimum wage and the Working Hours Act and can be asked to investigate; contractual pay claims belong before the subdistrict court, where no lawyer is required and the procedure is relatively quick. Note that an employer that pays wages late owes a statutory increase on top of the arrears.

Dismissal

Do not sign anything on the day it is presented. A settlement agreement can always be revoked within fourteen days, but a signature given without advice narrows your options considerably. If you are dismissed on the spot, object in writing at once, state that you remain available for work, and take advice immediately: the two-month deadline for challenging a dismissal runs from the moment the contract ends, and it cannot be extended.

Practical steps for employers and employees

For employers, the recurring failures are avoidable ones: no written record of the essential terms, a probationary period agreed in a contract too short to carry one, a chain of fixed-term contracts that has quietly converted into a permanent one, an on-call worker who was never offered fixed hours, a personnel file that contains no trace of the performance problem now relied on, and a self-employed contractor who is in truth an employee. Each of these is cheap to fix in advance and expensive to fix afterwards.

For employees, the useful habits are equally simple. Read the contract before signing and check which collective agreement applies. Keep your own record of hours and holiday balances. Ask for feedback in writing. And when the relationship starts to go wrong, get advice early, while the options are still open, rather than after a deadline has passed.

Frequently asked questions

How Law and More can help

Employment law in the Netherlands is detailed, and the cost of a procedural mistake is usually higher than the cost of preventing it. Our employment lawyers draw up and review employment contracts, staff handbooks and collective agreement compliance, advise on reorganisations and individual dismissals, negotiate settlement agreements, and represent employers and employees before the subdistrict court and the UWV. If you are hiring in the Netherlands, or your own employment is under pressure, contact Law and More to discuss your position.