News - Netherlands

Netherlands - February 2014

Dutch Lower House passes Work and Social Security Act

On 18 February 2014, the Lower House of the Dutch Parliament passed the legislative proposal for the Work and Social Security Act (Wet Werk en Zekerheid). This specifically includes changes to the rules for flexi workers, the law governing dismissal and unemployment benefits. Most of these changes will take effect on 1 July 2015.

As regards flexi workers: there will only be limited cases where more than one contract for a definite period of time will be permissible. The maximum period for this "temporary-to-permanent" obligation (the so-called "ketenregeling") will be reduced from three to two years. The intervals between employment contracts, during which they will be considered consecutive, will go up from three to six months.

As regards the dismissal rules, the following changes are particularly significant:

  • If an employee is dismissed for commercial reasons or due to long-term incapacity for work, the employer must apply to the Employee Insurance Agency. Where there are dismissals for other reasons, the employer must apply to the Sub-District Court.
  • Compensation based on the "Sub-District Court formula" will no longer apply. Proceedings based on “manifestly unreasonable dismissal” will also be eliminated. Instead, the Sub-District Court may award reasonable compensation to the employee.
  • A transition payment will be introduced. The employer will be obliged to pay this if the employment contract is ended on its initiative or, in the case of a contract for a definite period, if the contract is not renewed. The Sub-District Court may award reasonable compensation in addition to the transition payment.
  • An order rescinding the employment contract may be appealed to the Court of Appeal or Dutch Supreme Court.

Resources

For further information or to discuss the consequences of the above, please contact Edith Franssen, on 31 20 578 54 52 at Loyens & Loeff Amsterdam - http://www.loyensloeff.com/.

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