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From the 1st of January 2020 a number of changes in Dutch employment law will come into force. These changes will bring new attractive benefits as well as new risks that need be taken into account by both employers and employees.

In this overview we will briefly inform you on the changes in Dutch employment law in 2020 with a focus on the employers perspective. This, due to the fact that our firm is specialized in corporate law. For more information please visit our website or contact Lisa Kloot via kloot@lvh-advocaten.nl or +31(0)102092777.

New Dutch employment act in 2020

The new employment act called “Wet arbeidsmarkt in balans” will enter into force on the 1st  of January 2020. This new law should make it more attractive for employers to offer employees an employment contract for an indefinite period of time. The most significant changes are:

  • In case of the termination of a contract, the employee will be entitled to a transition fee (“transitievergoeding”) from the first day of employment. The right to a transition fee already exists but it is only applicable if the employee has worked over two years. The new (extended) right of an employee also applies to a dismissal during the probationary period. The increased accrual for older employees, on the other hand, has been deleted;

  • There will be an additional legal ground for dismissal. Due to this new so called cumulation ground (“cumulatiegrond”) in article 7:669 paragraph 3, sub i Dutch Civil Code, the current legal dismissal grounds can be combined. The chance of a dismissal being granted by the court will therefore be higher. However, the downside is that the transition fee that can be assigned by the court, can be increased to 150% in case of a dismissal on a combined ground instead of the regular 100%;

  • The duration of temporary contracts, before they automatically turn into an indefinite contract, is prolonged from 2 to 3 years (“ketenregeling”

  • The rights of on-call workers are being expanded. For example, after a working period of 12 months the employer must offer the on-call workers an employment contract with working hours that are equal to the hours that the employee has worked in the previous period of 12 months;

  • A new system for insurance premiums for unemployment benefits will be introduced (“WW-premie”). There will be a lower unemployment insurance premium for employees with a written employment contract for an indefinite period of time (this does not include on-call workers);

The definition of Payrolling will be adjusted, so that the overlap with the temporary employment structure will disappear completely. Payroll employees will be entitled to the same employment conditions as employees who are employed by the client itself. Payroll is therefore merely a reduction of the administrative burden for the employer.

Compensation of transition fee for long-term incapacitated employees

On the 1st of April 2020 employers can claim compensation for the transition fee that has been paid to long-term incapacitated employees. This new scheme in Dutch employment law applies with retroactive effect to transition fees that have been paid since the 1st of July 2015 to long-term incapacitated employees.

Employers can request compensation up to six months after payment of the full transition payment. If the transition payment is paid in instalments, then the application can only be submitted after the final payment has been made. If the transition payment has already been paid before the scheme comes into effect, the employer will have six months after April 1, 2020 before the application needs to be submitted.