Working contracts
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Understanding Employment Contracts
Dutch employment law distinguishes primarily between fixed-term (temporary) and permanent (indefinite) contracts, alongside specific arrangements for flexible work.
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Permanent vs. Fixed-Term Contracts
Fixed-term or temporary contracts are agreements with a set duration for a job or service, after which employment automatically terminates. These contracts offer flexibility for employers, particularly for project-based needs, seasonal work, or managing workforce fluctuations. For employees, they can be an excellent pathway to gain valuable work experience, explore different industries, and build professional networks.
In contrast, a permanent or indefinite contract implies long-term employment without a predetermined end date, providing significantly greater job security and stability. Employees on permanent contracts are entitled to a comprehensive range of benefits, including paid vacation days, sick leave, pension contributions, and healthcare coverage, alongside legal protections regarding notice periods and severance pay in case of dismissal.
A key aspect of Dutch labor law is the conversion rule: an employee is generally entitled to receive a permanent contract after having three consecutive temporary contracts or after a cumulative period of temporary contracts exceeding three years. Furthermore, it is possible for a fixed-term contract to be converted into a permanent one, provided there is mutual agreement between the employer and employee and all necessary criteria are fulfilled.
Zero-Hour Contracts
A zero-hour contract is a type of on-call contract where employees do not have a fixed number of working hours per week and are only paid for the hours they actually work when called upon. Employers are typically required to give employees at least four days’ advance notice for work. If the employer cancels a call within this four-day period, or changes the work times, the employee is still entitled to payment for the hours they were initially called to work. Even if an employee is only needed for one or two hours, they are entitled to a minimum of three hours’ pay per call.
Significant protections exist for employees on zero-hour contracts. After six months of employment, the “Continued Payment of Wages Obligation” (loondoorbetalingsverplichting) comes into effect. This means the employer must continue to pay wages even if they do not call the employee to work. Furthermore, after one year of working on a zero-hour contract, the employer is legally obligated to offer the employee a contract with a fixed number of hours. This fixed number must be at least the average number of hours the employee worked per week over the preceding year.
Looking ahead, the Dutch government is implementing changes to enhance job security for flexible workers. From January 1, 2027, zero-hour contracts will generally no longer be allowed for most employees. Employers will be required to offer a fixed basic contract for the hours employees are scheduled at least as standard. While on-call contracts may still be permissible in some specific cases, such as for minors, pupils, and students, this legislative shift underscores a clear policy direction towards more predictable employment arrangements. This move is a direct outcome of the “Wet Arbeidsmarkt in balans” (Balance Employment Market Act, WAB), which aims to reduce precarious employment and provide greater certainty and protection for flexible workers by shifting more of the employment risk from the employee to the employer.
This development represents a significant positive for international job seekers, offering increased job security and predictability even in roles that might initially be flexible, thereby supporting their long-term planning and integration into Dutch society.
Min-Max and On-Call Contracts
Beyond zero-hour contracts, two other types of flexible contracts are common:
Min-max contracts specify both a minimum and a maximum number of hours an employee is guaranteed to work each week. The employee is always paid for at least the minimum hours, even if there is less work available. This offers more predictability than a zero-hour contract while retaining flexibility for the employer to call upon the employee for additional hours up to the agreed maximum.
An on-call contract with a preliminary agreement is a highly flexible option where the employment contract itself only begins when the employee is called up for work and explicitly accepts the assignment. Until acceptance, there is no formal employment contract, meaning the employer is not obligated to call the employee or pay wages if no work is offered.
For all types of on-call contracts (zero-hour, min-max, and on-call without a preliminary agreement), employers are now required to specify the days and times when they can call up employees in the employment contract. Employees have the right to decline work requests that fall outside these agreed-upon days and times.
Temporary Employment Agency Contracts (Uitzendbeding)
Temporary employment contracts are distinct and can only be issued by employment agencies (uitzendbureaus). These contracts often include an “uitzendbeding” (temporary employment clause), which stipulates that the contract between the temporary worker and the agency automatically ends when the assignment with the client company concludes. In such cases, the temporary worker receives payment only for the hours they have actually worked.
The Collective Labor Agreement (CAO) for temporary workers outlines a specific phase system that governs the rights and obligations of temporary workers as their employment duration increases:
Phase A (or Phase 1/2): This initial phase can last for up to 52 weeks. During this period, the temporary worker typically operates under an agreement with the “uitzendbeding.” This means their contract can end automatically if the client no longer has work for them. However, after these 52 weeks, the employment agency is legally required to offer the temporary worker a temporary contract for a set number of hours, which must always be paid, even if work is temporarily unavailable.
Phase B (or Phase 3): Following Phase A, the temporary worker transitions to Phase B. In this phase, they receive a contract for a specific, fixed period, and the “uitzendbeding” no longer applies. This transition provides the temporary worker with increased certainty regarding their work and income.
Phase C (or Phase 4): This final phase begins after a temporary worker has completed three years of employment in Phase B or has had six consecutive contracts. At this point, the temporary worker is entitled to a permanent contract, which offers the same level of security and benefits as a direct, indefinite employment agreement.
Under the Allocation of Labour by Intermediaries Act (WAADI), temporary workers are entitled to the same terms of employment as employees directly employed by the client company. This includes the right to equal pay for equal work, supplements, holidays, and leave, as stipulated in the client’s collective labor agreement (CAO). The “hirer’s remuneration” principle ensures that temporary workers receive the same wages as regular employees in similar positions from their very first day. Additionally, temporary workers accrue holidays and are entitled to 8% holiday pay on their gross salary. Since 2023, temporary workers cannot be immediately dismissed when ill; the temporary employment agency is obligated to continue paying wages for up to two years, depending on the contract length. Furthermore, from January 1, 2024, pension accrual for temporary workers aged 18 or older applies directly from their first working day.
This structured phase system for temporary agency workers illustrates a clear, legally defined progression from highly flexible to permanent employment. It is not merely an informal practice but a regulated pathway designed to provide temporary workers with increasing rights and certainty over time, ultimately leading to a permanent contract. This system effectively balances employer flexibility with robust employee protection. For expats considering temporary agency work, this means viewing it not just as a short-term solution but as a potential and regulated stepping stone towards long-term career stability in the Netherlands. Understanding these phases empowers individuals to advocate for their rights and strategically plan their career progression.
Seconded Workers (Posted Workers)
Secondment (detachering) refers to a situation where an employee temporarily works for another company (the “hirer”) while remaining formally employed by their original company (the “lender” or “intermediary”). The lender is responsible for paying the employee’s wages, but the hirer typically determines the salary based on the nature of the work and the required experience.
The legal framework governing secondment involves two key acts:
The Allocation of Labour by Intermediaries Act (WAADI) sets out the rules for hiring and lending personnel within the Netherlands. It mandates that lenders must be registered with the Chamber of Commerce and ensures that seconded workers receive equal working conditions as the hirer’s directly employed staff.
The Terms of Employment Posted Workers in the European Union Act (WagwEU) applies specifically to employers from countries within the European Economic Area (EEA) and Switzerland who temporarily send their staff to work in the Netherlands. This act requires these foreign employers to register temporary assignments in the Dutch online notification portal and to ensure that their seconded staff receive certain minimum Dutch employment terms, including minimum wage, adherence to the Working Hours Act, and compliance with health and safety regulations.
Foreign employers are also obliged to maintain documents such as payslips and working hours summaries at the Dutch workplace or have them digitally accessible, and to appoint a contact person in the Netherlands for communication with the Netherlands Labour Authority.
A key difference between secondment and temping is that secondment contracts are often for longer periods, with an agreed end date and average working hours, and may include a notice period for early termination. Temping contracts, conversely, are typically for shorter durations and frequently contain an agency clause allowing for immediate termination by any of the three parties involved (worker, agency, client).
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