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New employment law: Tightening of the regulation regarding successive fixed-term contracts

Publication date: 29 January 2015
There will be major changes to employment law in the Netherlands. Russell Advocaten will inform you of these changes by a series of newsletters. This time: Tightening of the regulation regarding successive fixed-term contracts.

keten

A tightening of the regulation regarding successive fixed-term employment contracts (in the following referred to as ketenregeling) will take effect as of 1 July 2015.

Employment contracts for an indefinite period at an earlier stage

The ketenregeling for employees with fixed-term employment contracts will be tightened so that employees will be entitled to an employment contract for an indefinite period at an earlier stage. In case of fixed-term employment contracts concluded in succession within a period of six months (currently: three), the fourth contract or a period of two years (currently: three) will bring about an indefinite employment contract. As of 1 January 2020 this is again a period of three years.

Limited possibility to deviate by CAO

The possibility to deviate from the regulation regarding successive fixed-term employment contracts by means of collective bargaining agreements (CAOs) will be limited. CAOs can only deviate with regard to employment contracts through temporary employment agencies or, if required by the nature of the business operations (this does not include the common fluctuation in the business operations as a consequence of economic circumstances). Deviation can only take place up to a maximum of six contracts within a maximum period of four years. The interval period of six months can not be deviated from.

Wider possibility to deviate for specific employee groups

Wider possibilities to deviate will apply to specific employee groups. Thus, as regards directors of legal entities it can be deviated by written agreement, and, as regards employment agreements concluded because of employee training it can be deviated by CAO from the two year term (it can not be deviated from the maximum number of contracts though). The regulation regarding successive fixed-term employment contracts does not apply to jobs in certain business sectors designated by the Minister of Social Affairs and Employment as fixed-term employment contracts are an inherent feature of these business operations in these sectors (as for instance professional football).

The ketenregeling will not apply

The ketenregeling will not apply to employment contracts concluded in connection with work-study programmes. In addition, the regulation regarding successive fixed-term employment contracts will not apply to employees younger than 18 years working a maximum average of 12 hours per week.

Successive employership will exist sooner

Successive employership will exist sooner so that the regulation ketenregeling will apply to successive employment contracts of the same employee working for different employers (for instance, as regards temporary employment agency workers or a relaunch/takeover after bankruptcy). In contrast to the current case law it will no longer be necessary that the new employer has information of the nature and skills of the employee. However, the requirement that the employee will have to do a similar job for the successive employer remains in force. Just as right now, the applicability of the ketenregeling in successive employership can be excluded by CAO.

Transitory law

To fixed-term employment contracts concluded before 1 July 2015 that pass the term of two years after 1 July 2015, the old ketenregeling will remain applicable. In the event a fixed-term employment contract will be concluded on or after 1 July 2015, the new ketenregeling will apply. In that case, the ketenregeling will not apply if the period between the employment agreement concluded on or after 1 July 2015 and the previous employment contract has been longer than six months. CAOs in force on 1 July 2015 including a deviation from the ketenregeling will remain in force for the duration of the term of the CAO, but no longer than 1 July 2016. Intervals of more than three months between employment contracts concluded before 1 July 2015 will remain valid as an interruption of the regulation regarding successive fixed-term employment contracts.

Contract for indefinite period with termination agreement no longer possible

Employers sometimes conclude a termination agreement together with the fourth contract (for a fixed-term) to sidestep the ketenregeling. On 9 January 2015, the Netherlands Supreme Court ruled that this construction is in conflict with the law. Thus, it is no longer possible to create an additional fixed–term contract through a termination agreement.

Action

  • Check the term of fixed-term employments contracts you concluded with your employees.
  • Contact your outside corporate counsel in case you have concluded a termination agreement in the context of the extension of an employment contract for an indefinite period.

More information

Would you like to receive more information about the Work and Security Act or the Participation Act, or about any other changes in employment law? Please contact:
Jan Dop, LL.M. (jan.dop@russell.nl).

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