Practice Area Articles


February 05, 2024

By Paul Hastings Professional

Back to International Employment Law



CO2 emissions and work-related travel

As from 1 January 2024, entrepreneurs with more than 100 employees are required to report on employees’ compensated work-related mobility (kilometres travelled, means of transport, type of fuel) to state-owned platform Netherlands Enterprise Agency (Rijksdienst voor Ondernemend Nederland), by which the related CO2 emissions will be calculated. Employers therefore should more consciously choose sustainable mobility and emit fewer greenhouse gases in traffic. The Government’s goal is to achieve a reduction of 1.5 megatons of CO2 emissions by 2030. Employers must report once a year and may be subjected to additional checks and/or administrative sanctions. The reports will be studied by the relevant Ministry of Infrastructure and Water Management (Ministerie van Infrastructuur en Waterstaat), and employers will receive feedback on the results.

Whistleblower protection

In 2019, the European Union adopted EU Directive No. 2019/1937 to protect whistle-blowers. The Netherlands has implemented the directive through the Whistleblower Protection Act (Wet bescherming klokkenluiders) of 18 February 2023 (the “Act”), amending the House for Whistleblowers Act (Wet huis voor klokkenluiders) 2016. The Act applies from 18 February 2023 to large employers with at least 250 employees. On 17 December 2023, the Act became applicable to medium-sized employers (50 – 249 employees). There have been several amendments to the extant Dutch rules on whistleblower protection, of which a few are mentioned here. Previously, whistleblowers had to first report internally under the previous legislation whereas, under the new rules, whistleblowers may choose to report directly to external parties such as the already existing “House for Whistleblowers” or designated competent authorities for the different sectors of industry. The Act broadens the protection of whistleblowers by defining a wider range of forbidden retaliatory acts. Also, the definition of “misconduct” is expanded. There are now stricter requirements for employers as to their internal reporting procedures.

Qualification of employment contracts

On 23 March 2023, the Supreme Court delivered the long-awaited ruling in the Deliveroo case on whether the riders of Deliveroo are self-employed persons or qualify as employees. The Supreme Court ruled that they are, in fact, employed by Deliveroo, upholding the Court of Appeal’s judgment. The Supreme Court concluded that whether an employment contract exists should be assessed on the basis of all facts and circumstances of the case. Although the riders had a certain freedom to work whenever they wanted and to be replaced by someone else (which elements are typically found in services contracts), all other facts and circumstances pointed at that the riders were, in fact, employed by Deliveroo. This Supreme Court ruling is important in practice as the court specifically mentioned certain elements of the work relationship to be included in any case when assessing if an employment agreement exists. The Supreme Court did not define new general rules for assessing if a worker is self-employed or employed, as new legislation in expected on the topic both on the national and the European level. In line with earlier decisions of lower courts, the Supreme Court’s ruling clarifies that a holistic approach is still required when assessing if an employment agreement exists. This means that, even if an agreement between an employer and a worker contains typical “services contract” provisions, the agreement can still qualify as an employment agreement.

With thanks to Els de Wind of Els de Wind Law for her invaluable collaboration on this update.




Whistleblower legislation

The draft 'Whistleblower Protection Act' on Implementing EU Directive 2019/1937 of 23 October 2019 on the protection of Whistleblowers has been submitted to the House of Representatives on 1 June 2021. The Directive entered into force on 16 December 2019 and should have been implemented into Dutch law on 17 December 2021. The new Act is to amend and clarify the existing Dutch 'House of Whistleblowers Act' which will be renamed 'Whistleblower Protection Act'.

The implementation of the Directive will:

  • Strengthen the legal position of whistleblowers; amongst others by the reversal of the burden of proof in the event of a detrimental action caused by making a report; the burden of proof for demonstrating the absence of a causal relationship lies with the employer.

  • Extend the category of persons entitled to receive support and legal protection when a suspected abuse is reported, to job applicants, shareholders, directors, and anyone working under the supervision and direction of contractors and subcontractors. Furthermore, persons assisting a reporter and third parties involved will be protected.

  • Lead to some additional obligations for (a) employers, such as tightening requirements for internal reporting channels, and for (b) designated competent authorities with respect to setting up external reporting channels.

The debate in parliament is ongoing. The aim is still to have the Act enter into force on 1 January 2023.


Working where you want act (Wet werken waar je wilt)

The legislative proposal amending the Flexible Work Act, was adopted by the House of Representatives on 5 July 2022. The legislative proposal aims to give employees more freedom to choose between working at the office or from home. Currently, if the employee requests an adjustment of the workplace, the employer must consider such a request and consult with the employee and if he refuses the request inform the employee of the reasons of this refusal in writing. Under the legislative proposal a request to work from home (within the European Union) must be tested by the employer against the standards of reasonableness and fairness. The legislative proposal is currently pending in the Senate. The date of entry into force is yet unknown.


Future pension act

As a result of the financial crisis, the Dutch Government started a nationwide discussion on fundamental changes in the occupational pensions system. This discussion has resulted in a Principle Agreement (Pensioen Akkoord) in 2019 between the Government and all employer and employee representatives (social parties). The most important change will be the abolition of the so-called average contribution or equal accrual of benefits. In the near future employers will have to grant benefits based on age independent contributions, which results in so called degressive or reducing accrual of benefits the older the employee becomes.

On 29 March 2022, the legislative proposal for the Future Pension Act has been submitted to the House of Representatives. It is the intention that the new legislation will come into effect on 1 July 2023. The transition to the new system will take place in the period up to 1 January 2026 or maybe 1 July 2026. Agreement must be reached no later than 1 January 2024 between the social partners and/or employer and employees regarding the new pension scheme.

All pension plans will be based on a defined contribution system (DC system), under two options:

  • An individual DC plan with investments in the accrual phase and a fixed or variable pension in the retirement phase.

  • A DC plan with a conditional pension that would increase if the pension provider's assets were to exceed the liabilities and lowered if the liabilities exceed the assets.

In both options, the provider would need to use a life cycle approach for investment risk. The defined contribution would be based on 80% average pay with an accrual phase of 42 years that would include an age-independent contribution calculated at a (mitigated) market interest rate.

All pension plans with age-related premiums introduced before 2023 (or maybe 2024) may continue for participants in the pension plan. New employees can no longer participate in these old plans and need to enter a pension plan allowed under the revised pension legislation.

The latest moment of entry in these old pension plans – given that they are in place before 2023 (or maybe 2024) – is the day before a company introduces the pension schemes allowed under new legislation. The latest moment of entry is 31 December 2026 (or maybe later due to the lengthy legislative process).

Furthermore, a new survivor's pension up to a maximum of 50% of pensionable salary, independent of years of service is also proposed. A dependent's pension after retirement is on an accrual basis and remains 70% of old-age pension. The orphan's pension amounts to a maximum of 20% of pensionable salary with a maximum of 40% for full orphans. Payment is made up to age 25.

In addition, it is envisaged that existing accrued pension entitlements and rights will be converted under one of the two new DC plans. The implementation of these changes may require compensation. Compensation can be financed by employers. But there are some possibilities of financing of compensation by pension funds.

The benefits will be secured on the same basis as under present rules, but without solvency buffers and based on cost covering contributions only. The assets of the pension fund will have to be invested in accordance with life cycle principles and allocated on an individual basis (age related). Profits or losses in a given year will lead to an increase or decrease of benefits, most probably in equal parts over a period not exceeding 10 years.

With thanks to Els de Wind and Niels van Boekel of Van Doorne N.V. for their invaluable collaboration on this update.




New Act to improve gender diversity in the boardrooms of Dutch companies

As of 1 January 2022, the Act on a balanced ratio between men and women on management and supervisory boards (Diversity Quota and Targets Act) contains two measures to promote more diversity in the boardrooms of Dutch companies. First, an appointment quota is set for the Supervisory Boards of listed companies, to help ensure that men and women each hold at least one third of the seats on the Supervisory Board. This quota will apply to all new appointments of Supervisory Board members. Second, it will become mandatory for large public and private limited liability companies (i.e., large N.V.'s and B.V.'s) to set appropriate and ambitious target ratios to improve the gender diversity on their boards and among their senior management personnel. The companies will be required to report annually on their progress.


Proposed implementation of new whistleblowing legislation

The Dutch legislative proposal implementing the EU Whistleblower Directive 2019/1937 was submitted to the Dutch House of Representatives on 1 June 2021. The proposal aims to:

  • strengthen the legal position of whistleblowers, amongst others by the reversal of the burden of proof in the event of a detrimental action caused by making a report: the burden of proof for demonstrating the absence of a causal relationship lies with the employer;

  • extend the category of persons entitled to receive support and legal protection when a suspected abuse is reported, to job applicants, shareholders, directors, and anyone working under the supervision and direction of contractors and subcontractors. Furthermore, persons assisting a reporter and third parties involved will be protected; and

  • lead to additional obligations for employers, such as implementing stricter requirements for internal reporting channels, and for designated competent authorities with respect to setting up external reporting channels.

This Directive entered into force on 16 December 2019 and should have been implemented in Dutch law on 17 December 2021, but the Netherlands did not meet this deadline. At this stage, it is unclear when the existing Dutch legislation will be amended but it is expected to be in 2022.


Transparent and predictable working conditions

On 11 November 2021 the Act implementation EU Directive 2019/1152 on transparent and predictable employment conditions was submitted to the House of Representatives. The Directive was implemented in Dutch law on 1 August 2022. This legislative proposal provides amongst others that:

  • training that is required by law or by a collective agreement will be free of cost for the employee and will count as working time. 

  • any clauses under which an employer prohibits or restricts a worker from taking up employment with other employers outside the work schedule established by that employer, will be void, unless such clause is justified on objective grounds. 

  • employers will be obliged to provide their employees with written information on the standard working hours and rest periods, within one week after commencement of the employment, and on the training policy and dismissal policy, including notice periods, after one month. 

  • after 26 weeks of employment, employees may submit a request to their employers asking for more predictable, and therefore more secure, working conditions. The employer will not be obliged to agree to the request, and the request must be feasible.




New Dutch pension system

In July 2020 the Dutch Government presented an outline for a new Dutch pension system. This new system will affect all occupational pension arrangements in the Netherlands. In December 2020 the first draft for the Future Pensions Act (FPA) was made available for public consultation. The FPA was due to be presented to Parliament mid‑2021. All pension contracts under the FPA will be defined contribution plans. Pension premiums will be flat rate and age independent. Employers, employees, and pension operators will be allowed to enter into this new pension contract as of 2024. All current pension arrangements and accrued pensions must be transferred to the new system in 2026 at the latest, with the exception of some existing non‑flat rate defined contributions plans. Accrual in defined benefit plans is no longer allowed. Workers whose pensions are negatively affected by the transfer will receive compensation from their employer, starting no later than 2026 and until 2036.


Supreme Court changed its point of view on qualification of the employment agreement

The Dutch Supreme Court ruled on 6 November 2020 (in a case involving the Municipality of Amsterdam) that it is irrelevant for the assessment whether in a particular case an employment or independent contractor agreement exists, whether the parties had the intention to conclude an employment agreement. It is more important to look at how parties work together and relate to each other in practice. Until this ruling, the parties' intention was an important factor in such assessment, based on the Supreme Court's Groen/Schoevers ruling of 14 November 1997. The 6 November 2020 ruling went in the expected direction following the elaborated opinion of the Advocate‑General on the need for clarification of the definition of the employment agreement. The court held that if an agreement matches the statutory definition of an employment agreement ("the agreement under which the one party, the employee, undertakes to perform work in the service (under the authority) of the other party, the employer, for remuneration during a given period"), the agreement must be considered an employment agreement. This question has to be answered according to the so‑called "Haviltex assessment:" it is not a purely linguistic interpretation of the text of the agreement/contract that is decisive, but merely the meaning that the parties could have reasonably attached to the provisions of the contract in the particular circumstances at hand and what they could reasonably have expected from each other. The Supreme Court explained that first, it should be determined with the Haviltex assessment which rights and obligations were agreed upon by the parties, and only then it can be decided if the agreement has the characteristics of an employment agreement. It is expected that, as a result of this ruling, it will be easier for independent contractors to claim to be employed because they do the same work in the same manner as employees. The ruling does not give clarity on the more important practical question of whether or not in a particular work relationship the criterion of "authority" is met.


Posting of workers in the Netherlands

The Dutch implementation Act of the new EU Posted Workers Directive came into force on 30 July 2020. Under the 1996 Posted Workers Directive foreign workers posted to the Netherlands are entitled to certain hard core minimum terms and conditions, regardless of the choice of foreign law governing their employment contract. These hard core terms include minimum wage and eight percent holiday allowance, minimum paid annual leave (20 holiday days based on fulltime employment), maximum work periods and minimum rest periods, non‑discrimination, equal treatment and health, safety, and hygiene at work. Under the new rules, the maximum duration of a posting is set at 12 months, which can under circumstances be extended to 18 months. Further, the hard core terms to which the posted employee is entitled are extended after the agreed posting period. For instance, the employee then also becomes entitled to continued pay during illness. Under Dutch law, employees are entitled during the first two years of illness to 70% of their last earned salary, with a minimum of the (monthly) minimum wages and a maximum of 70% of the set daily wages. The definition of 'wages' (loon) is extended to include, for instance, bonus payments. The new hard core terms do not include the protection under Dutch dismissal rules (including the rules on non‑competition provisions) and supplementary retirement arrangements. So if the posting lasts longer than the agreed period, the posted worker will automatically become entitled to almost all mandatory provisions of Dutch employment law. In this way, the rights of posted workers in the Netherlands will after a short initial period be almost equal to those of local temporary workers.




Extension of COVID-19 relief measures by the Dutch Government

Emergency Fund Employment Bridging (NOW 2.0)

The NOW relief measures were recently extended by the Dutch Government. The NOW is aimed at financially assisting companies following a decrease in turnover as of 1 March 2020. For the months March, April, and May 2020, employers were able to apply for a wage subsidy under the NOW 1.0. For the months June through September 2020 employers could apply for the newly introduced NOW 2.0.

The following (key) conditions apply:

  • an employer must expect to lose at least 20% turnover over a period of 4 months (June through September 2020);
  • business groups with Dutch and foreign subsidiaries may not take into account any turnover loss from subsidiaries that do not pay Dutch social insurance contributions on wages;
  • an employer must continue to pay its employees in full (100%);
  • if an employer dismisses employees due to business economic reasons, it must repay 100% of the relief received per employee. If the employer intends to dismiss 20 employees or more for business economic reasons, it must have reached an agreement on the same with any applicable unions or other employee representatives. If an employer fails to do so and makes an application for collective dismissal between 29 May 2020 and 1 October 2020, this will result in a 5% discount on the final grant;
  • an employer is obligated to encourage its employees to take retraining or reskilling courses. The employer must include a statement with its application confirming this;
  • an employer receiving a significant wage subsidy under the NOW 2.0 is not permitted to pay out bonuses to key management or dividends to shareholder(s) and may not buy (back) its own shares, subject to certain exceptions;
  • if an employer applies for the NOW subsidy from 6 July 2020 for the first time, the start date to calculate turnover loss can be 1 June, 1 July or 1 August 2020. If the employer has already applied for the NOW 1.0, the period of turnover loss must be continuous;
  • the compensation for wage costs depends on the drop in turnover. The compensation amounts to 90% of the wage costs and is determined by reference to the drop in turnover, as follows:
    • if turnover is reduced by 100%, the allowance amounts to 90% of the employer's wage costs;
    • if turnover is reduced by 50%, the allowance amounts to 45% of the employer's wage costs; and
    • if turnover is reduced by 25%, the allowance amounts to 22.5% of the employer's wage costs.
  • the Employee Insurance Agency (UWV) will generally make an advance payment of 80% of the expected relief and the actual decrease to turnover will be determined afterwards. When determining the relief amount, a correction can be made if there has been a decrease in wages or an increase in turnover.

Self-employed persons

Individuals who are self-employed are not covered by the NOW 2.0, nor were they covered by the NOW 1.0. For self-employed individuals whose businesses are affected by COVID-19, the Self employed Provision of Assistance Decree (1.0) will be extended by four months up to 1 October 2020.

The Self-employed Provision of Assistance Decree will be amended, as follows:

  • a partner income test will apply to the livelihood benefit; and
  • for the application for a working capital loan, it must be declared that no suspension of payments or bankruptcy has been applied for or obtained.

This means that the viability of the holding in question will not be verified and no capital test will be applied. The income support can be applied for in the form of an additional maintenance payment and/or a working capital loan.


Dutch Balanced Labour Market Act 2020

The Balanced Labour Market Act ("WAB") came into force on 1 January 2020 and aims to provide a better balance between permanent and flexible employment contracts.

Amendments to the transition fee

Prior to 1 January 2020, employees were only entitled to a transition fee (statutory severance) if they had been employed for at least 24 months. Under the WAB, employees are now entitled to a transition fee from commencement of employment, regardless of whether they are subject to a probationary period. For each year of employment, the transition fee will amount to one third of a month's salary. The increase in transition fee for the period of employment exceeding ten years has been abolished. It is worth noting that the temporary rules dictating lower payments for smaller employers and extended accrual for older employees have now expired.

Introduction of a new dismissal ground; the combination ground

In 2015, a small number of dismissal grounds were introduced into Dutch legislation. As a result, the (unilateral) dismissal of an employee was generally only permissible if an employer could demonstrate that one of the lawful dismissal grounds could be fully substantiated. In practice, employers were often unable to fully substantiate one particular ground (for example, underperformance) but wanted to use several grounds to justify the dismissal (for example, combining underperformance with a poor working relationship). As of 1 January 2020, a new 'combination ground' (the "i-ground") for dismissal has been established. This makes it much easier for an employer to terminate an employment contract through the courts, by combining statutory dismissal grounds to prove that it cannot reasonably be expected to continue the employment relationship. The courts may award an employee extra compensation of up to a maximum of half of the transition fee, on top of the basic statutory transition fee.

In practice, the Court tends not to be inclined to terminate an employment contract on the basis of a 'thin' combination ground. As such, each of the dismissal grounds should - to a certain extent - be substantiated by the employer to ensure they constitute one valid combination ground.

Amendments to the rules on successive fixed-term employment contracts

The period after which successive fixed-term employment contracts convert into a permanent contract has been extended from two to three years. A chain of successive employment contracts for a fixed-term may still be broken by an interval of at least six months between the contracts. This six month period can be reduced under a collective labour agreement to three months in certain circumstances.

New rules for payroll employees

The WAB prevents payrolling (i.e., companies using third parties to employ employees on their behalf) being used by companies to compete on employment terms. Companies engaged in payrolling must offer employees on a payroll contract the same employment terms as their regular employees, with the exception of a workplace pension. An adequate pension scheme is to be provided to payroll employees, which could either be the pension scheme in which the company's regular employees participate or a pension scheme which meets certain conditions as laid down in a Governmental decree.

Changes to social security premiums leading to higher costs for flexible contracts

The WAB provides that employers must pay a lower social security contribution for insurance (WW-premie) for employees on permanent contracts than for employees on flexible contracts (including fixed-term contracts). An employer must make reference to the type of employment contract on the employee's pay slip in order to qualify for the lower contribution.

New rules for on-call contracts

Employees working on the basis of an on-call contract are no longer required to be permanently available for work. The employer must contact the employee at least four days in advance (to be reduced to a minimum of one day in a collective labour agreement), failing which the employee is not required to respond. If the employer cancels the assignment within four days before the start of the work, the employee is still entitled to be paid for the assignment. Once an on-call contract has been in place for a period of 12 months, the employer must, within a month, offer the employee a fixed number of working hours, equal to at least the average monthly hours worked in the preceding 12-month period. If the employer fails to make such offer in writing, the employee can make a claim for additional pay if working in excess of their average number of working hours at any moment in time.


Pension Agreement

On 12 June 2020, employers' organisations, trade unions and the Government reached an agreement on the adjustment of the pension system. It has taken more than one year to negotiate certain crucial details relating to how the money in the Dutch pension pools is distributed.

Some of the most notable themes in the Pension Agreement are as follows:

  • retirement age rises less rapidly;
  • abolition of average premiums and the introduction of age-independent premiums and compensation; and
  • compulsory disability insurance for self-employed persons.

At the time of writing, the finer details of the Pension Agreement have yet to be finalised and certain conditions are yet to be met (for example, the Pension Agreement requires legislative changes that will be realised in the coming years).




Proposed reforms to Dutch employment law

On 6 November 2018, the government presented the proposed “Balanced Labour Market Act” (Wet Arbeidsmarkt in Balans or WAB) to the Lower House of Dutch Parliament. The WAB is currently pending in the Second Chamber of Dutch Parliament, but is expected to come into force on 1 January 2020.

The most important elements of WAB are:

  • cumulative dismissal ground: the introduction of a cumulative dismissal ground, for use in cases where the facts and circumstances are not sufficient to substantiate one specific dismissal ground. If the employment contract is terminated based on this new dismissal ground, the court may grant the employee additional compensation of up to half the statutory severance pay;
  • changes to the statutory severance pay: service after ten years will be weighted the same as previous service years: at 1/3 of a month’s salary per year of service instead of 1/2 of a month’s salary per year. Employees will start accruing entitlement on the first day of employment instead of after two years. Furthermore, employers will be compensated for paying the statutory severance pay where they dismiss employees because of long-term illness (lasting at least two years);
  • changes to rules around fixed-term contracts: under the current rules, no more than three consecutive fixed-term employment contracts can be agreed in a two year period before the employment converts into a permanent contract, unless the employment is interrupted for a period of six months or more. This two year period will be extended so fixed-term contracts can be agreed for a maximum period of three years before the contract converts;
  • changes to rules on probationary periods: if an employer offers a permanent contract for the first time, a probationary period can be agreed for a maximum of five months (rather than the current two). For contracts lasting two years or longer, a probationary period of maximum three months may be agreed instead of the current maximum of two months;
  • changes for payrolling employees: employees who are permanently seconded; so-called “payrolling employees”, shall be entitled to (with the exception of pensions) the same terms and conditions of employment as the employees employed by the legal entity where the payrolling employees are seconded to;
  • changes for on-call employees: an employee with an on-call contract no longer needs to comply with a call if:
    1. the number of working hours is not, or not clearly, laid down in the employment contract (which is the case in so-called zero hours contracts); and
    2. the employee is given less than four days’ notice of the start of the work.

If the employer cancels the assignment within this period, the employee is entitled to be paid for the hours the assignment would have lasted; and

  • social security premiums: employers will pay a lower unemployment social security contribution for an employee with a permanent employment contract in contrast to employees working on fixed-term contracts.




Proposed Reforms to Dutch Employment Law

On 11 October 2017, the newly formed Dutch government published its plans for the next 4 years. The most important proposals are:

  • the introduction of a cumulative dismissal ground, for use in cases where the facts and circumstances are not sufficient to substantiate one of the other dismissal grounds. If termination is based on this new dismissal ground, the court may grant the employee additional compensation of up to half the statutory severance pay;
  • amendments to statutory severance pay such that service after ten years will be calculated at a third of the monthly salary per year instead of half of the monthly salary per year. Employees will start accruing the payment on the first day of employment instead of after 2 years;
  • under current rules, no more than 3 consecutive fixed-term employment contracts can be agreed in 2 years before it converts to a permanent contract. This will be extended so that fixed terms contracts can be agreed for a maximum of 3 years before it converts. For permanent contracts, probationary periods can be in place for up to a maximum of 5 months (rather than the current 2). Companies employing up to 25 employees will be required to continue salary payments only during the first 52 weeks of sickness absence (instead of 104 weeks);
  • current paternity leave entitles partners to 2 days’ leave with full wage after childbirth, which should be taken within 4 weeks. As of 1 January 2019, this will be extended to 5 days. The plan is that partners will receive additional paid paternity leave of 5 weeks from 1 July 2020, to be taken within the first 6 months after childbirth; and
  • the existing legislation on wage tax and social security when hiring independent contractors is expected to be abolished, and new legislation introduced to determine whether a work relationship qualifies as an employment agreement or an independent contractor agreement.


Pre-Pack is TUPE Transfer

On 22 June 2017, the European Court of Justice rendered its judgment in the Dutch Smallsteps (previously Estro) case. The ECJ ruled that this pre-pack of Estro Group (flitsfaillissement) qualified as a transfer of undertaking, and the intention was for a continuation of (part of) Estro’s business, not the liquidation. This matter was referred back to the Dutch court for reconsideration.




Proposed change to the statutory redundancy payment in cases of business related dismissals

Under the new dismissal rules, an employee who has been employed for at least 24 months and whose employment contract is terminated or not extended at the employer’s initiative is in principle entitled to a statutory severance payment called the ‘transition fee’. Parties to a collective labour agreement may agree on a similar arrangement as long as the value of total compensation to which the employee is entitled is at least at the same level as the statutory transition fee to which the employee would have been entitled. A recent proposal (if legislated) would permit employers to agree via collective agreements for transition fees which are lower than the statutory transition fee for dismissals for business related reasons. These new rules are scheduled to enter into force on 1 January 2018.


Proposed change to statutory transition fee in case of long term illness

Since 1 July 2015 employers have been required to pay employees who are ill a statutory transition fee in case of dismissal within the period of two years from the period of illness. Following protests from employers, the Dutch Minister of Social Affairs has proposed that employers are repaid this statutory transition fee (which is paid to its employees who are ill for two years or more) out of a government fund. The nationwide social security contributions for employers are intended to be increased to fund this proposal. These new rules are scheduled to take effect on 1 January 2018.




Changes in the assessment of payroll tax liability for independent contractors

With effect from 1 May 2017 a new and stricter regime means that payroll taxes do not need to be withheld by the client who has engaged a contractor if (i) the contract between the contractor and the client is based on a template contract published by the Dutch Tax Authority; or (ii) the contract drafted by the contractor and the client was ‘preapproved’ by the Dutch Tax Authority, provided that (in both situations) the contractor and the client act directly in accordance with the contract terms. In any other case, payroll taxes will be due. If the client fails to withhold and pay these payroll taxes, this may result in a tax claim. This may be increased with interest and a penalty of up to 100% of the payroll taxes which have not been withheld and paid.


New fines for businesses acting in breach of the Dutch Data Protection Act

On 1 January 2016, two important changes were made to Dutch data protection law. Under the revised law, Data processors are required to notify the Dutch Data Protection Authority (“DDPA”) (and on some occasions the data subjects concerned) in the case of a personal data security breach. As of the same date, administrative fines can be imposed in case of a breach of the Dutch Data Protection Act. These fines can be up to EUR 810,000 or 10 percent of the annual turnover in case of a legal entity. Employers can be data processors so they should make sure that they meet the Dutch employee data protection rules, particularly if data are stored in, transferred to, or accessible from locations abroad or if they are shared with third parties.

Considering the new risk of fines, employers should ensure that their internal privacy policies are in line with the guidelines provided by the DDPA.



From 1 July 2016, employers employing 50 employees or more were required to have a whistleblowing scheme in place. An independent governmental body called the House for Whistleblowers can investigate wrongdoings at the request of whistleblowers, advise whistleblowers on their position and possible actions and provide protection against detrimental measures of their employers. It is expected that there will be more whistleblowing claims by employees.

With thanks to Els de Wind, Niels van Boekel and Cara Pronk of Van Doorne N.V. for their invaluable collaboration on this update.

For More Information

Image: Suzanne Horne
Suzanne Horne

Partner, Employment Law Department

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Aashna Parekh

Associate, Employment Law Department

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