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Terms of employment & CBA

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Terms of employment and collective bargaining agreement

The lawyers of Penrose specialise in terms of employment under Dutch law and assist employers and employees in drafting and adjusting terms of employment. Terms of employment are usually included in employment contracts, collective bargaining agreements (CBA), staff regulations and other appendices to the employment contract. Below, we will discuss a number of important topics and frequently asked questions regarding the terms of employment.

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The contractual relationship between the employer and the employee is usually laid down in a written employment contract. The employment contract often states at least the primary conditions such as working hours, salary and holidays. It may also include fringe benefits and the further specific agreements between the parties, such as a relationship or non-competition clause and how company information is protected. Terms of employment that are not included in the employment contract are often set out in the Netherlands in a collective bargaining agreement (CAO), staff regulations or other appendices to the employment contract.

Employees with a temporary contract are entitled to the same terms of employment as permanent employees. Learn more about flexible contracts.

Many terms of employment can be agreed between the employer and the employee. For some terms of employment, minimum standards are laid down by Dutch employment law. These may not be deviated from to the detriment of the employee. One of these minimum legal provisions is, for example, that if a probationary period is agreed upon, it must be in writing. The maximum duration of the probationary period depends on the duration of the employment contract, but may never exceed two months.

Frequently used clauses in employment contracts in the Netherlands are the non-solicitation clause and the non-competition clause. A non-competition clause is a clause that prohibits the employee, at the end of the employment contract, from performing work elsewhere that competes with the activities of the employer for a certain period of time.

A non-solicitation clause is a variation to the non-competition clause. The non-solicitation clause limits the group of persons with whom an employee can assist or collaborate with at the end of the employment contract. Usually it prohibits the employee from doing business with customers or employees of the employer.

The non-solicitation clause and the non-competition clause are fairly common in employment contracts for an indefinite period of time in the Netherlands. They are also found in fixed-term employment contracts, but in that case the clause must include a good reason why it is necessary. Here, Dutch labour law is more protective for fixed term employees.

Non-solicitation and non-competition clauses are usually combined with a penalty clause, which states that in the event of violation of these clauses, a penalty must be paid to the employer.

A collective bargaining agreement (Dutch acronym: CAO) is a written agreement with (supplementary) agreements on, in particular, terms and conditions of employment that apply in the relationship between the employer and the employee. A CAO is concluded by one or more employers or employers’ organisations and one or more employees’ organisations / unions and applies collectively to all employers and employees belonging to the group or sector for which the CAO has been concluded.

There are two types of CAOs in the Netherlands: industry and corporate collective agreements. Corporate collective agreements are collective agreements within a large single company. Such collective agreement is concluded between the employer and one or more employees’ organisations / labour unions. Industry CAOs are collective agreements within a sector, such as a CAO for the hotel and catering industry, temp workers or the metal industry. The CAO only applies to companies and employees represented by the parties who have concluded the CAO, unless there is a generally binding declaration (Dutch: AVV) of the CAO. In that case, employers who are not party to the CAO must also comply with the CAO.

The stipulations of a CAO must not be less favourable to an employee than the applicable statutory Dutch law provisions. With regard to the transition allowance, however, a CAO may be less that on the basis of the statutory system of the Netherlands.

Our Dutch employment lawyers specialise in terms of employment and CAO. They can help you consider and deal with any of your issues and are happy to answer your questions. The contact details of our employment law experts can be found here.

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