Review and drafting of employment contracts

When entering into an employment relationship, it is important to conclude an employment contract ensuring that parties are aware of their rights and obligations. We recommend paying adequate attention when drafting and/or reviewing an employment contract in order to prevent misunderstandings or discussions at a later stage.

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What should be included in the employment contract?

The contracting parties are in principle free to determine the employment conditions. However, certain clauses need to comply with the corresponding Dutch statutory rules, for example clauses including a probation period or a non-competition clause. 

It is also important to check if a collective labour agreement (in Dutch: collectieve arbeidsovereenkomst, “cao) is applicable. This is an agreement concerning employment conditions between one or more employers or employers’ organizations with one or more workers’ organizations, such as a trade union. The website of the Ministry of Social Affairs provides an overview of the existing collective labour agreements in the Netherlands. 

When in doubt if a collective labour agreement is applicable, please do not hesitate to contact us. We would be happy to assist.

Important employment contract clauses

Below we discuss several important clauses to be included in an employment contract.

  1. Duration

The employment contract can be entered into for a fixed period of time or an indefinite period of time. 

Please be aware of the so-called chain rule: if subsequent employment contracts for a fixed period of time succeed each other, the employment contract may convert to an employment contract for an indefinite period of time by operation of law. According to the chain rule a contract for an indefinite period of time will come into existence (a) after 36 months or (b) as of the commencement of the fourth contract for a fixed period of time, unless there is a break of more than six months between such successive contracts.

  1. Notice period

When terminating the employment, both employer and employee will have to take into account a notice period. The notice period to be respected by the employer depends on the employee’s years of service. The notice period for the employee is, in principle, one month. For more information on the notice period, please refer to our blog.

  1. Working hours and job location

The employment contract includes the number of working hours per week, the working schedule, and the location(s) where the job is usually performed. 

  1. Probation (trial period)

The employment contract may include a clause stipulating a probation period. During such probation period, both parties can terminate the employment contract with immediate effect. The maximum duration of the probation period depends on the duration of the employment contract. For more information on the probation period, please refer to our blog.

  1. Non-competition and non-solicitation clause

The employment contract may include a non-competition and/or a non-solicitation clause. A non-competition clause prohibits the employee from being directly or indirectly active or involved in a business performing similar activities during and after the term of the employment contract. A non-solicitation clause prohibits the employee from being active for or having contact with clients or other business relations of the employer once the employment contract has ended. For a non-competition and a non-solicitation clause, strict rules apply (please refer to our blog for more information). Breaching a non-competition and/or non-solicitation clause often triggers a contractual penalty clause.

  1. Confidentiality clause

During the employment, the employee acquires confidential information about the employer’s business. A confidentiality clause has the purpose to prevent the employee from sharing confidential information with third parties. Breaching a confidentiality clause often triggers a contractual penalty clause.

Need assistance in drafting or reviewing an employment contract?

We would be pleased to assist in drafting or reviewing the employment contract, both in Dutch and English. We also assist in drafting or reviewing addenda to the employment contract, such as an Employee Handbook. Please use our contact form, or contact us by telephone (020-6898123) or email (info@noordamadvocatuur.nl).