In the Netherlands, the framework of laws is key in shaping the employment landscape. Understanding the dynamics of employment law in the Netherlands, the relevance of these regulations is crucial for both employers and HR professionals.
How a Law Comes into Force in the Netherlands
Proposal and Draft
Laws in the Netherlands typically begin with a proposal, originating from various sources such as government bodies, political parties, or interest groups. When ministers intend to regulate rules and procedures legally, they instruct their officials to create a legislative proposal. Officials involve relevant stakeholders (e.g., legal experts, labour unions) and prepare a Memorandum of Explanation, outlining the purpose and details of the proposal.
The proposal moves to the ambassadorial preparatory stage, involving discussions among high-ranking officials. Subsequently, it proceeds to the sub-cabinet, an assembly of ministers with subject matter expertise.
Generally, the government (the King and ministers) submits a legislative proposal, known as a government proposal.
- Following the sub-cabinet discussions, the proposal undergoes deliberation in the Ministerial Council, involving all ministers. If the council approves the proposal, the text is sent to the Council of State for advice.
- The Council of State reviews the proposal’s feasibility and ensures it aligns with the constitution. While under consideration by the Council of State, the proposal remains confidential.
- The proposal, along with supporting documents, goes to the Second Chamber, including the Memorandum of Explanation, Council of State advice, a subsequent report, and the Royal Message. The King presents the proposal to the Second Chamber, and the entire process becomes public. In the Second Chamber, the proposal is initially discussed in a specialised committee before the minister defends it in a plenary debate. A vote follows on proposed amendments and, subsequently, on the entire proposal. If approved, it moves to the First Chamber.
- The First Chamber reviews the proposal and can only accept or reject the proposal, followed by a plenary debate and a vote.
Royal and Ministerial Endorsement
Upon approval by both chambers, the King and the responsible minister sign the law. After publication in the State Gazette, the law comes into effect.
Employment Law in the Netherlands
Dutch employment law governs the rights and obligations of employers, employees, and temporary workers in the Netherlands.
Understanding both employer obligations and employee rights is crucial for compliance with Dutch employment law. This ensures a safe working environment and respects the interests of all parties.
Health & Safety Act – Arbeidsomstandighedenwet/Arbowet
The Working Conditions Act [Arbeidsomstandighedenwet/Arbowet] governs the occupational health and safety standards in the Netherlands. It outlines the rights and responsibilities of both the employer and employees regarding the working conditions.
Health & Safety Policy
Employers are required by law to have in place a Health & Safety policy providing a safe and healthy working environment for all employees, visitors, contractors, and any other persons affected by the business operations.
Both the employer and employees share a legal responsibility to work together in establishing a safe and healthy workplace.
The purpose of this Health & Safety Policy is providing guidelines and establishing a genuine culture of health and safety within the workplace and fostering such a culture.
It will inform employees about health and safety protocols and procedures, measures, working with company equipment, machinery, and computer screen work.
Risk Inventory & Evaluation (RI&E)
Secondly the Risk Inventory & Evaluation (RI&E) [Risico Inventarisatie & Evaluatie], assessment is also mandated by law for employers (even with only one employee) and essential for fulfilling the legal obligation of ensuring employee health and safety.
Emergency Reponse Officers
The employer is also obliged to seek assistance of employees who have been designated as Emergency Response Officers (ERO) acting effectively in the event of an emergency at the office location.
In conjunction companies need to protect employees against sexual harassment, aggression, and violence and to pay attention to undesirable behaviour, referred to in the law as Psychosocial Occupational Stress (PSA) [Psychosociale arbeidsbelasting].
In 2023, a new bill was passed with a convincing majority vote in the Dutch parliament, requiring employers with more than 10 employees to appoint a Confidential Counsellor, in Dutch Vertrouwenspersoon.
The Confidential Counsellor is a designated professional providing confidential support to employees facing issues within the workplace.
Grievance Policy and Procedure
The purpose of this document is to outline the procedure for staff (employees, contractors and consultants) to raise a complaint or formal grievance.
It describes the process, stages in case of a compliant such as criminal activity, danger to health and safety, breach of legal obligations etc).
Additionally, the steps are provided in case of raising a formal grievance in case of discrimination, sexual harassment, aggression, violence, or bullying.
Bullying & Harassment Policy
These guidelines and procedures outline the definitions of bullying and harassment in the workplace, along with examples of unacceptable behaviour.
The policy is closely associated with the role of the confidential counselor and the procedure outlined in the Grievance Policy & Procedure.
Sick Leave Policy
In addition to the Health & Safety Policy, it is imperative for a company to establish a comprehensive Sick Leave Policy.
The law sets all sorts of obligations for both the employee and the employer to facilitate as much as possible the speedy recovery of the employee.
A well-crafted Sick Leave policy in the Netherlands is not just a legal necessity; it is a strategic guide to navigate the complexities of sick leave management in accordance with the Permanent Incapacity Benefit (Restrictions) Act.
Code of Conduct
The code of conduct outlines the rules, principles, and guidelines on expected behaviour and ethical standards within the organisation.
It serves as a framework for how employees should conduct themselves in various situations and interactions, both internally with colleagues and externally with clients, customers, and stakeholders.
A typical code of conduct covers a wide range of topics, including honesty and integrity, respect for others, confidentiality, conflicts of interest, compliance with laws and regulations, use of company resources, and professional conduct in the workplace.
Working Hours & Overtime – Dutch Working Hours Act
The Working Hours Act regulates overtime, working hours, rest periods, breaks and night shifts under employment in the Netherlands. These rules are aimed to protect employee’s health, safety and welfare and to make the combination work and family life easier. In the Working Hours Act rules regarding:
- working hours
- rest periods
- night shifts
- service calls
- working on Sunday
- on call duty and on-site duty calls
For the brochure on the Working Hours Act in English published by the Dutch government, click to download the Brochure Working Hours Act.
Salary – Minimum Wage Netherlands per Hour
Commencing January 1, 2024, the statutory minimum wage is established on an hourly basis for all industries in the Netherlands.
All employees aged 15 and above are required to receive at least the prevailing hourly minimum wage.
To establish the salary per job position in a company, a salary benchmarking, also referred to as compensation benchmarking could be considered. It involves comparing job descriptions and pay ranges from one company to similar positions in other organisations. This process provides insight into the average or market salary for each job role.
Employee Benefits Netherlands
Employee benefits in the Netherlands are the non-wage compensation provided to employees in addition to the regular salary. These benefits are offered by employers as part of their overall compensation package.
It can include a pension scheme, travel and transport allowance, insurances regarding income protection disability, (sales) bonus, employee assistance programmes and other forms of compensation.
More market practice examples of employee benefits can be found on HRMNetherlands.com.
Holiday Allowance & Paid Holidays Netherlands
The labour law in the Netherlands requires that all employees receive a minimum of four weeks paid annual holiday each year, the non-statutory holidays [Wettelijke vakantiedagen].
Additionally, there are Non-Statutory Holidays [Bovenwettelijke vakantiedagen], which are at the discretion and decision of employers. Both statutory and non-statutory holidays have expiration dates to respected by law.
The holiday allowance is equate to 8% of an employee’s salary, more information is available in our blog FAQs: Holiday Allowance & Paid Holidays in the Netherlands.
Leaves of Absence – Work & Care Act
Employee leaves of absence in the Netherlands, paid and unpaid time off, is governed by the Work and Care Act [WAZO]. The statutory leaves of absence in the Netherlands are pregnancy and maternity leave, partner/paternity leave, parental leave, calamity leave, short-term care leave, long-term care leave (such as Informal Care Leave), adoption leave and unpaid leave/sabbatical leave.
Employment Contracts & Dismissal Procedures under Dutch Employment Law
Employment contracts play a crucial role in the relationship between employers and employees in the Netherlands.
According to the Dutch Civil Code, all fixed-term and permanent employment contracts must be documented, outlining details such as job title, responsibilities, and salary to ensure legal adherence.
The extension of a fixed term employment contract or conversion in to a permanent employment contract is also bound by legal rules and procedures.
In the Netherlands, termination of employment is a sensitive issue governed by complex employment laws. According to Dutch law, if the employment contract is terminated or if an employee is being made redundant, they are entitled to a severance payment [transition fee] based on their salary and years of service.
Laws prevent unfair firings and discrimination based on age, gender, or ethnicity.
When negotiating termination of employment, it is important to consider the statutory notice periods, which vary based on the length of employment.
Trade Unions and Works Councils Netherlands
Employment relations in the Netherlands are tightly governed by trade unions and collective bargaining agreements. It is crucial for businesses to comprehend their legal responsibilities within these frameworks, as non-compliance may lead to fines or sanctions.
In addition to trade unions, there is legal requirement, described in the Dutch Works Councils Act, for companies to establish a Works Council [ondernemingsraad, OR].
The Works Council has consultation and approval rights in respect of certain significant proposed management decisions and employment.
Data Protection Netherlands
In the Netherlands, companies must protect employees’ personal data according to the law. Employers need to follow specific rules outlined in the General Data Protection Regulation (GDPR) as a lot of personal data of their employees are processed and stored in employee files.
It is essential for employers to know which documents to keep in the employee records under the law.
Whistleblowing – Dutch Whistleblower Protection Act
The Dutch Whistleblower Protection Act is aimed at protection for whistleblowers, ensuring those reporting wrongdoing are protected.
It shifts the burden of proof to employers, broadens the protection for whistleblowers, and mandates stricter internal reporting rules.
Frequency of Labour Law Changes
A employment law or a general administrative measure in the Netherlands often comes into effect on January 1st or July 1st.
A ministerial regulation comes often into effect on January 1st, April 1st, July 1st, or October 1st.
In certain instances, the legislation could come into force by August 1st, such as when the European regulation Partner Leave and Parental Leave was introduced in 2022.
Power of Knowledge
In conclusion, understanding Dutch employment law is vital for both employers and employees to ensure fairness and compliance. It fosters a positive work environment and contributes to economic stability and growth.
As experienced HR and employment law agency in the Netherlands, our company advices on all aspects of labour law and Human Resources.
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