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Dutch law is partly codified and the Civil Code (Burgerlijk Wetboek) is the most important single source of employment law. Book 7 of the Code deals with employment contracts, including basic principles, probationary periods, fixed-term and temporary agency work contracts, and termination of contract. It also regulates related matters such as pay, annual leave, sick leave, part-time work, transfers of undertakings and sex discrimination. Outside the scope of the Civil Code, major individual statutes (often implementing EU law) deal with areas such as equality and non-discrimination, working time and rest, parenthood- and care-related leave, flexible forms of employment, health and safety, and employee representation. Case law, especially that of the Supreme Court, plays a significant role in interpreting employment-related legislation.
Pay and conditions for a large majority of Dutch employees are set by collective agreements, which are signed mainly at industry level. The Government has made many industry-level agreements binding on all employers in the sectors concerned, even those that do not belong to the signatory employers’ organisations. Collective agreements must generally comply with the provisions of employment legislation, though they are specifically allowed to deviate from statutory provisions in some areas (eg aspects of probationary periods, working time and sick pay). Where an employee is covered by a collective agreement, it usually takes precedence over the terms of their employment contract.
A works council must be set up to represent employees in all undertakings with at least 50 employees. As well as informing and consulting the works council, the employer must obtain its approval for policies and rules in many area of HR, including working hours, pay systems, recruitment, dismissals and training.
This topic refers to employment law in the private sector only.
Temporary Covid-19 Crisis Measures (as at 19 June 2020)
During the Covid-19 pandemic, the Government’s main measure to prevent crisis-related job losses has been a temporary pay compensation scheme (replacing the normal statutory subsidised short-time working arrangement). Under this scheme, the state reimburses part of the wage costs of employers that have lost at least 20% of their turnover over a three-month period during the crisis (the amount of the reimbursement depends on the fall in turnover, with a maximum of 90% of wages, up to a ceiling). Employers using the scheme must not make redundancies during the period concerned. This scheme is currently due to expire on 30 September 2020. Employers are generally obliged to pay the wages of employees who are unable to work for reasons related to Covid-19, such as being quarantined.
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