A fixed-term employment contract is a contract that ends at a predetermined moment or on a particular event. It ends by operation of law: no notice and no procedure are required.
Legal basis
Article 7:667 of the Dutch Civil Code governs the automatic ending. Paragraph 3 provides that early termination by notice is possible only where that has been agreed in writing for both parties; without such a clause the employer is bound to pay salary until the end date. Article 7:668 contains the notification duty: for a contract of six months or longer the employer must state in writing, at the latest one month before the end date, whether it will be renewed and on what terms. Failing that, a payment of one month’s salary is due, pro rata where notification is late. Article 7:652(4) prohibits a probationary period in a contract of six months or less, and Article 7:653(2) allows a non-compete clause only with written reasons setting out the substantial business interest.
How it works in practice
A fixed-term contract is attractive to employers, but the restrictions are real. Without an early termination clause there is no way back if performance disappoints, other than applying to the court. If the contract continues past the end date without objection, Article 7:668(4) treats it as continued for the same period, up to a maximum of one year.
Where it goes wrong
The notification payment is regularly overlooked, including for contracts that simply expire. A second error is including a probationary period in a short contract; it is then void, even if both parties agreed to it. Third, the chain rule fills up unnoticed, so that a fourth contract or exceeding 36 months produces a permanent contract.
Related terms
The contract connects to the chain rule, the probationary period and the non-compete clause.
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