Employment law in Eindhoven: your rights as employee and employer

Employment law in Eindhoven is Dutch employment law: the same rules from Book 7 of the Civil Code apply here as everywhere else in the Netherlands, and the court for the region is the Rechtbank Oost-Brabant. What differs locally is the mix of cases, with a high-tech labour market in which international employees, secondment constructions and non-competition clauses feature heavily. Employees usually underestimate what they are entitled to on dismissal, and employers usually underestimate the procedural requirements for ending a contract.

Two documents cause most of the trouble in practice. A settlement agreement (vaststellingsovereenkomst) and a non-competition clause are routinely signed without review, and both bind the person who signs them for a long time. The sections below set out the rights, the obligations and the procedures on each side, with the points at which the risk actually sits.

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) and by European directives transposed into Dutch law. The current dismissal system dates from the Wet werk en zekerheid of 2015 and was amended by the Wet arbeidsmarkt in balans with effect from 1 January 2020. 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 from the first day of employment, regardless of the length of service. The entitlement lapses only where the termination is the result of seriously culpable conduct by the employee. 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

An employment contract does not have to be in writing to be valid, but several clauses do: a probationary period, a non-competition clause and a penalty clause are only binding if they are agreed in writing. Since 1 August 2022, when the Directive on transparent and predictable working conditions was implemented, the employer must also give the employee written information about the working conditions, including the place of work, any probationary period, the applicable CAO, training entitlements and notice periods. The core items must be provided within one week of the start of the work and the remainder within one month. 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. 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. Employment matters from Eindhoven fall within the district of the Rechtbank Oost-Brabant, which sits in both Eindhoven and ’s-Hertogenbosch.

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.

For a fixed-term contract of six months or longer, the employer must tell the employee in writing at least one month before the end date whether the contract will be continued and on what terms (aanzegging). Failing to do so makes the employer liable for compensation equal to a month of salary, reduced proportionally if the notice was merely late (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.

If you are facing a dismissal, a settlement agreement or a dispute about a non-competition clause, or if as an employer you want a procedure checked before you start it, the employment law team at Law & More is happy to look at the file with you.

Frequently asked questions