Compandben SA 76cc4568-c846-4b55-9339-28effacfa554.xls
Market Conditions Summary - Netherlands
LAW MARKET
general information
Recruitment and Contract
Probationary period is maximum 2 months for a
standard indefinite contract, or a contract of at least
2 years. During probationary period the contract may
be ended without notice. If the contract is for less
than 2 years then the probationary period is only 1
month. The probationary period must agreed to in
Probationary Period writing to be valid. As law
Probationary Period Not possible to extend even if employee is sick
Extension during the probationary period
As per article 7:672 of the civil code the minimum
notice period is 1 month. Less than 5 years service
=1 month`s notice. Note that the employer notice
period is normally twice that of the employee-so if
the employee needs to give 2 months notice the The maximum notice period permitted is 6 months for the
Notice Period employer will have to give 4 months notice. employee and 12 months for the employer.
Notice Period 2 5 to 10 years =2 months as law
Notice Period 3 >10 < 15 years = 3 months as law
Notice Period 4 15 years or more =4 months as law
Article 7:668a of netherlands civil code states that:
up to 3 fixed term contracts may be entered into
with a total span of 36 months. Or if there is a break As law This means there can be a maximum of 2 renewals. There
of 3 months or more between the contracts then any is no notice period required if a fixed term contract comes to the
Fixed Term Contract number of contracts may be undertaken. end of its term.
It is common to employ employees in Netherlands on a fixed term
contract of 1 year and then convert it into an indefinite one,
Indefinite Contract effectively giving a long probationary period.
Pensionable age is 65. But for the employee to retire
Retirement Age at 65 it must be agreed beforehand.
1 76cc4568-c846-4b55-9339-28effacfa554.xls 11/11/2011
Compandben SA 76cc4568-c846-4b55-9339-28effacfa554.xls
Market Conditions Summary - Netherlands
LAW MARKET
general information
Employment Conditions
maximum over a 13 week period is 40 hours per In collective agreements the working hours can go to 45 hours
Working Hours week. So this is the effective legal maximum over the 13 week period.
employees granted annual leave to 4 times their Legal minimum often increased to 5 weeks .There is a tendency
working week. So if they have a 6 day week they get to give more vacation for length of service- typically: +5
24 days vacation. Legal minimum is 4 weeks. yrs = +1 days vacation +10 yrs=+2 days vacation +15
Vacation Unused vacation lapses after 5 years yrs=+3 days vacation
article 7:629 previews an exception to the principle
"no work no salary" (Geen arbeid geen loon) and
permits some special leave for employees to fulfill
Special Leave civic duties
Birth of Child
Death of Spouse or child
Death of Father or Mother
Marriage
Marriage of a child
others
New years Day/Easter Monday/Christmas Day/New
Years Day Night/Queen's Birthday/Pentecost/Whit
Sunday/Liberation Day/ Christmas Eve/Ascension Some employers also give St Stephen's day/Good
Public Holidays Day =10 Friday/Constitution Day/Remembrance Day 4th May
16 weeks maternity paid leave but note that
employer receives from the state a similar amount.
The maternity leave can be taken a maximum of 6 as law. The maternity leave can be extended if the employee is
Maternity leave weeks before the childbirth unable to work after the birth.
6 months part time work or 3 months full time unpaid
parental leave for a child of up to 8 years old- article
Paternity and Parental Leave 7:644 as law
Employee may apply for unpaid leave under the
"Wet financiering loopaanoderbreking" and if granted
Unpaid leave social security will pay a benefit.
Remuneration
As of January 2002 minimum wage is EUR 1206.60
per month for employees full time employed and
Bonus/Minimum Wage over 23 years of age. awaiting 2003 update
8% of a years pay calculated from June 1 to May 31
in any year holiday allowance is normally added to
Months of salary payment pay. Most frequent is 13.96 months of pay.
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Compandben SA 76cc4568-c846-4b55-9339-28effacfa554.xls
Market Conditions Summary - Netherlands
LAW MARKET
general information
Social Coverage
Normally a private insurance is taken out for this coverage.In
contracts it can be agreed that this salary is not payable for the
Employers required to pay a minimum of 70% of pay first two days. A new project is in progress whereby the employee
Payment of salary after during sickness but there is a maximum of 70% of will be entitled to 100% of salary in the first year. In practice
accident or sickness the EUR 159.99 gross per day. employers pay 70% without minimum.
2 years salary is most common and 3 years max as life insurance
as beyond this the amounts are taxed. If there is a pension
Life insurance No legal requirement provision for widows it is not usual to have a life insurance as well
Military Service Suspended 1996.
see "pension plan" It is legal in Netherlands to have
different pensions for different groups. Thus some
can have a pension based on 70% of final salary
Social Insurance and some on 80% see "pension plan"
Early retirement
About 90% of employees covered by a private pension plan .Of
these the majority are "final salary" plans. Normally enough to
guarantee the payment of 70% pension. The salary for this 70%
can be the final salary (most usual) or the average of the last 2 to
3 years. As pensions have become more expensive because
investment returns have slumped, companies moving toward
carreer average definitions for pensions.40 years of contributions
normally expected. The norm is for an employee contribution of
Pension No legal requirement to arrange a pension plan. 5% or so and some plans are index linked some not.
Intended that 70% of final salary at the time of
retirement be available, less whatever "franchises" Common contribution of employee is 5% of salary for both
Principle of the pension or reductions agreed as apart of the financing of the defined benefit and defined contribution plans with an average of
arrangements plan. 7.5% and up to 15% being contributed by employer
Contributions as indicated elsewhere as indicated elsewhere
Accident Insurance paid through general social insurance not separately paid through general social insurance not separately
For executives a private health care is required and it is common
Up to Dfl 47545 the health insurance is normally for this to be paid by the employer to 60% of the premium. This
paid by the state in return for the contribution of can cost up to Dfl 3000 for adults and Dfl 1500 for children. A
Health Insurance 6.25% o salary paid by the employer. standard insurance is Ffl 307 per month.
Long Term Care Insurance
Called WAO 7. 96% premium on a salary of Euro
Disability Insurance 41499 per annum
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Compandben SA 76cc4568-c846-4b55-9339-28effacfa554.xls
Market Conditions Summary - Netherlands
LAW MARKET
general information
Child Allowance
SOCIAL INSURANCES EMPLOYEE EMPLOYER
Old age and surviving
dependents insurance ,
Disability insurance , Loss of
earnings insurance Old age pension provision is part of general taxation Old age pension provision is part of general taxation
Unemployment insurance 4.13% on Eur 41499 per annum- employee pas called WW unemployment benefit is to a maximum of 70% of Dfl
WW 4.95% 337.
Unemployment insurance
Professional and non-
professional accident
insurance Paid through WAO
Employers usually take out insurance for covering employees
salaries beyond the 12 months payable by the state and
Loss of earnings insurance supplementing the amount paid by the state to the previous level
for sickness of salary
Called ZFW 1.7% EMPLOYEE contribution on Called ZFW 6.25% EMPLOYER contribution on salary up to
Health Insurance salary up to Euro 30700 per annum Euro 30700 per annum
Total see sample charges spreadsheet
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Compandben SA 76cc4568-c846-4b55-9339-28effacfa554.xls
Market Conditions Summary - Netherlands
LAW MARKET
general information
Indemnities
Application for severance has to be made to
Cantonal courtsGiving notice of termination can
terminate an agreement for an indefinite period of
time. The employer has to obtain prior written
consent from the Executive Legal Affairs of the
Central Organisation for Work and Income (in Dutch:
“Functionaris Juridische zaken van de Centrale
Organisatie voor Werk en Inkomen”: “CWI”) before
notice of termination can be given.
Dismissal proceedings with the CWI
After the CWI renders written consent (permit to give
notice) to give notice of termination, upon the giving
notice the notice period must be observed. After
lapse of the notice period the employment
agreement terminates. Until the permit to give notice
is obtained, any notice is null and void and does not
terminate the employment. Typical market rate would be one month salary per year of
service but courts may apply a rate where years of service up to
age 40 count as 1, from 40 to 50 count as 1.5 and above 50
Termination Indemnities count as 2
An employee of whom the employment has been
correctly terminated by giving notice after a permit to
give notice is obtained may, nevertheless, claim
damages or even reinstatement in his former job on
the grounds that he has been unreasonably
dismissed. It takes in general approximately two to
three months to obtain a permit to give notice with
the CWI.An employment agreement may be
terminated by mutual consent. It is recommended
that a termination by mutual consent is confirmed
explicitly in a written document signed by both
parties. A mutual consent termination may
jeopardise the employee’s right to unemployment
benefits. Therefore, a mutual consent termination is
in practice often formalised by a Court termination.
This is then only a formality in order to safeguard the
Termination Indemnities employee’s unemployment benefits as far as
continued possible.
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