The Employment Relationship in the Netherlands
The Dutch Civil Code contains general rules on Netherlands employment contracts. In practice, it may be difficult to distinguish under the law between employment contracts on the one hand and comparable personal services on the other hand. Under employment laws the distinction, nevertheless, is an important one, because many of the statutory provisions for Netherlands employment contracts are binding on the parties, deviations from these being void.

The Netherlands Employment Agreement
Under Netherlands employment law a Netherlands employment agreement need not be in writing, although the employer is obliged to provide the employee with a notification in writing, containing the essential parts of the employment agreement. Under employment laws some obligations however, are valid only if accepted in writing. An important example of that latter is provided by so called non-competition clauses, which are allowed under Netherlands employment law. Noncompetition clauses may be annulled or moderated by the competent court, if equity demands so. The Netherlands probationary period has to be agreed in writing in the employment agreement as well.

Terminating the Netherlands Employment Agreement
Under Netherlands employment law in the absence of mutual agreement or cause, an employer may not terminate a Netherlands employment contract for an indefinite period without a permit from the Director of the (local) "RBA" (labour office). The Director has to balance the interests of the employer and the employee. If the permit is refused, the employment agreement cannot be terminated in a valid way, and the employer should continue to pay to the employee his salary, etc. Especially in complicated cases, the Director may need quite some time (varying from two months or even longer) before rendering his decision. Although there are some applicable guidelines, it is often quite hard to predict whether a permit will be granted or not.

Notwithstanding the fact that an employer has terminated the contract of an employee in compliance with Dutch employment law, a compensation may be due, if the dismissal is found to be "clearly unreasonable". This may be the case if the reason for termination of employment is false or insufficient; it may also be the case if the financial effects of the termination of employment would otherwise be a burden on the employee.

A Netherlands employment contract can also be terminated by judicial order at any time. The Netherlands termination of employment proceedings will take approximately 2 months, and the court can award termination of employment damages to the employee, depending on the duration of the employment, the age of the employee and the reason for the termination. If the contract is terminated by judicial order, no notice period has to be observed and no permit from the Director of the RBA has to be obtained.

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PROBATIONARY PERIOD

Under emploment laws, for an indefinite period Netherlands employment agreement, two months is the maximum probationary period. Specification of a greater period will result in
there being no probationary period at all.


REINSTATEMENT

If the employer seeks termination of employment in Netherlands by judicial order, the court may order reinstatement and that the
parties make a good faith effort to make the employment succeed. An
employer found not to make such an effort can incur substantial financial penalties.

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