Category: Weblog

Does electric car not reach the stated range? Possible ground to terminate the sale!

Posted on by Guido Brandt

The range is an important consideration for many when buying an electric car. If the range is mentioned when selling an electric car, it is important (depending on the wording) that the car actually achieves this range. The Supreme Court ruled on 28 June 2024 (ECLI:NL:HR:2024:980) in a case where a buyer of an electric Jaguar had rescinded the purchase agreement because the car did not always achieve the stated range.

Background

In 2018, Jaguar launched an electric car, the Jaguar I-PACE. Jaguar’s sales brochure mentioned that the I-PACE has a range of 480 kilometres. A Dutch car dealer selling this model copied this range in its own I-PACE advertisement on its website. However, a buyer who bought the I-PACE from the dealer complained shortly after the purchase that the I-PACE only had a range of about 300 kilometres. Incidentally, this was a problem experienced by several consumers and buyers of the I-PACE. The cause seemed to be the conditions of the winter season.

The buyer gave the car dealer the opportunity to modify the car in such a way that the range of 480 kilometres was still achieved, but repair was not forthcoming. The buyer subsequently terminated the purchase agreement.

The proceedings between the buyer and the car dealer centred on whether the buyer was allowed to terminate the purchase agreement. The court of appeal ruled that this was allowed. To this end, the court considered in summary as follows.

  • Based on the statements made by car dealer about the range of the Jaguar I-PACE, the buyer could reasonably expect the car to have a significantly higher range than around 300 kilometres under usual conditions.
  • This means that the purchase agreement entails that the car dealer had to supply a car with that feature.
  • The actual range achieved of at most around 300 kilometres in winter is over 35% less than the 480-kilometre range advertised by the car dealer.
  • For this reason, the car delivered by the car dealer to the buyer does not comply with the purchase agreement concluded between them.

The seller appeals in cassation. The Supreme Court rules that the court of appeal correctly applied the testing framework for non-conformity: An item does not comply with the contract if the item, also taking into account the nature of the item and the statements made by the seller about the item, does not possess the features that the buyer was entitled to expect under the contract. The court of appeal’s judgment stands.

Relevance ruling

The Supreme Court ruling highlights the importance of accurate communications about an item to be sold. Those communications have an impact on whether or not an item complies with the contract ((non-)conformity). In the present case, non-conformity justified termination of the purchase agreement. In view of the enormous increase in the number of electric cars that have been and are being sold, manufacturers and sellers would seem well advised to further specify the action radius, as far as necessary, or state more clearly what it depends on and what the consequences of certain (weather) conditions are. After all, a lower range than stated could have far-reaching consequences for the enforceability of the sales contract.

In conclusion

Do you have any questions following the above? Feel free to contact us, we will be happy to think with you.

Employment law in the Netherlands – part 4 termination procedures and dismissal law

Posted on by Joost Kokje

Dutch employment law is designed to offer a balanced approach to the rights and obligations of employers and employees. This equilibrium is particularly evident in the procedures and laws surrounding the termination of employment contracts. Understanding these procedures is crucial for both employers and employees to ensure that dismissals are handled legally and ethically.

Grounds for termination

Employers can terminate an employment contract on several grounds, such as:

  1. Economic reasons: This includes financial difficulties, reorganization, or redundancy.
  2. Performance-related reasons: Inadequate performance or persistent incompetence.
  3. Behavioural reasons: Misconduct, such as theft or harassment.
  4. Long-term illness or disability: If the employee is unable to perform their job after a reasonable period of illness (usually two years).
  5. Mutual agreement: Both parties agree to end the employment relationship.
  6. Personal circumstances: Such as relocation or imprisonment of the employee.

Termination procedures

  1. Mutual Consent: The simplest and most amicable method is termination by mutual consent. This involves both parties agreeing to end the employment contract, often documented through a settlement agreement (vaststellingsovereenkomst).
  2. UWV Procedure: For economic reasons or long-term illness, employers must obtain a dismissal permit from the Employee Insurance Agency (UWV). This process involves submitting a request for dismissal with supporting documentation. The UWV reviews the request and makes a decision, which can be appealed by either party.
  3. Subdistrict Court Procedure: For reasons such as underperformance, misconduct, or a disrupted working relationship, employers must file a petition with the subdistrict court (kantonrechter). The court evaluates the evidence, holds a hearing, and then makes a decision.
  4. Summary dismissal: in the event of urgent cause, the employment agreement can be terminated immediately. It is essential that the employer acts fast when being made aware of any conduct which might justify such a dismissal.

Notice periods

Dutch law mandates specific notice periods, which vary based on the length of employment:

  • Less than 5 years: 1 month’s notice
  • 5 to 10 years: 2 months’ notice
  • 10 to 15 years: 3 months’ notice
  • More than 15 years: 4 months’ notice

However, collective bargaining agreements (CAOs) or individual contracts may stipulate different notice periods.

Severance Pay

In cases of dismissal initiated by the employer, employees are typically entitled to a transition payment (transitievergoeding). This payment calculated as follows: 1/3 of the monthly wage (including holiday allowance, average bonusses and/or commissions earned), times the time in service.

Protective measures

Dutch employment law strongly protects employees against dismissal, e.g. through the following:

  1. Preventative review: Employers must obtain permission from either the UWV or the subdistrict court before proceeding with a unilateral termination.
  2. Prohibition on dismissal during certain conditions: Employees cannot be dismissed during pregnancy, illness (up to two years), or membership in a works council (due to such membership).
  3. Right to appeal: Both employers and employees have the right to appeal against the decision of the UWV or the subdistrict court.

Employee rights and remedies

Employees who believe they have been unfairly dismissed can challenge the termination in court. If the court finds the dismissal to be unjustified, it can order reinstatement or award additional compensation to the employee.

Conclusion

Termination procedures and dismissal law in the Netherlands are designed to protect the rights of both employers and employees. These laws ensure that dismissals are carried out in a fair and transparent manner, providing a structured framework for resolving disputes. For employers, adhering to these procedures helps avoid legal complications, while for employees, it ensures their rights are safeguarded during the termination process. Whether you are an employer navigating the complexities of dismissal procedures or an employee facing termination, understanding these legal frameworks is essential. Seeking legal advice or consulting with a labor law specialist can provide further guidance tailored to specific

Appeal also possible for (only) changing request/claim

Posted on by Joost Van der Grinten

Appeals are usually lodged by parties who have been unsuccessful in whole or in part. In its judgment of 28 June 2024 (ECLI:NL:HR:2024:968), the Supreme Court ruled that an appeal can also be lodged for merely amending a request or claim. This therefore also applies to parties whose application or claim was granted in full at first instance.

The present proceedings involve a petition on a family dispute. The parties are referred to as the mother and the father.

Court and court of appeal

During the oral hearing at the court, the mother and father reach a settlement. The court grants both parties’ amended requests accordingly.

The mother (the appellant) – whose application, after amendment, was thus granted in full – appeals, (re)amending her application to her original application.

Declaring the mother inadmissible, the court considered as follows (freely translated).

“As a basic principle, the party whose application has been granted by the court at first instance has no interest in an appeal and the remedy of appeal is not there to provide an opportunity in such a case to overturn the order granting the application.“

Supreme Court

The mother then appealed in cassation, complaining that the court wrongly declared her inadmissible. The Supreme Court agrees and considers as follows (freely translated).

“3.2 (…) Even if a party’s application or claim was granted at first instance, that party may have an interest in bringing an appeal; indeed, an appeal may also serve only to amend or increase the application or claim.2 Accordingly, the mother was free to request on appeal that a care arrangement be established in accordance with her preliminary application, irrespective of whether she had amended that application at the hearing at first instance to reflect the agreement reached there.“

Wieringa Advocaten is happy to assist you

If you have questions about conducting, preparing or just avoiding proceedings, contact us. We have extensive experience in conducting proceedings, both at first instance and on appeal. Wieringa Advocaten is happy to assist you.

Attribution & co-entrepreneurship: the role of the Works Council in international concerns

Posted on by Thijs Dalmolen

Within international concerns, employee participation can be complex. Because decision-making is often more layered, the influence of a Dutch director on the decision of the foreign manamgent is sometimes limited. However, that doesn’t mean that the Dutch Works Council has no role at all.

For the most part, the Dutch Works Councils Act (WCA) assumes a singular situation, whereby the entrepreneur who maintains an enterprise must consult the Works Council in the case of important decisions. Besides the possibility of setting up a COR, GOR or GemOR, the WCA offers companies the option of setting up an employee participation structure that benefits employee participation within the company. Within international concerns, however, in many cases this will not suffice to give the (Dutch) Works Council an important role.

Territoriality

The WCA has territorial effect, which means that the WCA must only be applied by companies established within the Dutch national borders. Therefore, when an enterprise in the Netherlands is maintained by an entrepreneur abroad, the WCA applies. This means that the WCA must also be complied with when a concern is partly established in the Netherlands. This will be difficult to apply in many cases, especially when a decision is taken by a foreign concern management. The reverse does not fall under the scope of the WCA: when a Dutch entrepreneur maintains a company abroad, that entrepreneur does not have to take into account the provisions of the Dutch WCA.

Although the WCA has so far not been adapted to international concern situations, case law has developed a number of principles that ensure that the Dutch Works Council still has to be consulted when the decision is taken at a higher, foreign level.

Attribution

With the principle of attribution, the decision of the concern management is attributed to the company where the Works Council is established. This may imply that the Dutch company must ask its Works Council for an opinion in order to implement a decision of the foreign concern management. This is the case when the higher-level decision (1) directly affects the company for which the Works Council was established and (2) the WCA-director is involved in the decision-making.

Direct intervention means that the decision would be subject to consultation if the WCA-director himself had taken the decision. The foreigen company’s decision to reorganise and what leads to social consequences at the Dutch subsidiary is a good example. There is involvement with the WCA-director when the director of the subsidiary also has a position within the foreign parent, which makes him actually involved in the decision-making.


Co-entrepreneurship

However, based on the attribution principle, the Dutch Works Council cannot stop or hold back the decision of the higher manament. As mentioned, the consultation right extends only to the cooperation of the Dutch lower management with the decision of the concern management.

To complement this, case law has developed the principle of co-entrepreneurship as well. Based on this principle, the management of the concern should be seen as WCA management, which gives the Works Council a direct consultation right and could possibly also litigate against (decisions of) the concern management.

Co-entrepreneurship exists when (1) the decision directly affects the undertaking where the Works Council is established and (2) the concern management exercises such systematic influence that it is considered to co-maintain the undertaking.

The second requirement is particularly important and is also the essential difference compared to the principle of attribution. The parent must co-determine decisions. This is the case when the concern management owns a substantial part of the shares, for example, or when the concern management actually takes all important key decisions. If the scope for the WCA-director to take decisions independently is limited, then this is a strong indication to argue for co-entrepreneurship.

In practice

Although these two principles have been developed in case law, the same case law shows that these two principles are applied with restraint. Moreover, there is a chance that when a foreign concern management realises to be in a situation where co-entrepreneurship or attribution can be important, this will often be too late.The role of the Dutch Works Council will then still remain limited. For the Dutch WCA director, however, there is a responsibility to properly organise co-determination within the company. It is therefore important for the Dutch entrepreneur to bring the WCA to the attention of the foreign concern management.

Employers beware: CO2 reporting of employee’s travel mandatory as of 1 July 2024

Posted on by Guido Brandt

From 1 July 2024, employers with more than 100 employees will be obliged to record and report their employees’ commuting and business travel. This ‘reporting obligation work-related personal mobility’ stems from the Climate Agreement.

What does the reporting requirement entail?

The reporting requirement means that an employer must report kilometres travelled by its employees. There is no requirement to track actual CO-2 emissions.

The reporting obligation distinguishes between commuting and business travel. Commuting involves trips made by employees between their place of residence or stay and the location where work is performed. Business travel includes the trips an employee makes for work, excluding commuting. Business travel is broken down into: Lease and/or own fleet, mobility services and expense claims.

Furthermore, kilometres must be reported split by fuel type and means of transport. In terms of means of transport, cars, motorbikes, mopeds/scooters, (e-)bicycles, walking and public transport are covered by the reporting obligation. Other means of transport are excluded from the reporting obligation.

Who counts as an employee?

For the calculation of the 100 employees, all employees who work more than 20 hours per month under an employment agreement or on-call agreement count. Temporary workers, seasonal workers, self-employed workers and volunteers do not count in the calculation. For temporary employment agencies, temporary workers do count unless an temporary agency clause is included in the employment agreement.

When to report?

Employers employing more than 100 employees on 1 July 2024 must report employee business and commuting traffic for the second half of 2024 (or all of 2024) by 30 June 2025. Employers that hire more than 100 employees after 1 July 2024 will not yet have to report for 2024 in 2025. It is of course also possible to report voluntarily.

In conclusion

More information can be found in the Ministry of Infrastructure and Water Management’s handout. You can do the reporting yourself on the website of the Rijksdienst voor Ondernemend Nederland. If you have any questions, you can of course contact us.

From friend to foe: what you need to know about the law on adjusting dispute resolution and clarifying admissibility requirements inquiry procedure (Wet aanpassing geschillenregeling en verduidelijking ontvankelijkheidseisen enquêteprocedure)

Posted on by Michelle Sangers

Imagine this: you start a company full of enthusiasm and confidence with a few close friends or business partners. You share the same dreams and goals. But what happens when you suddenly disagree?

Ending shareholder disputes

If you cannot manage to work things out together, then ending the shareholder dispute can be a huge challenge. Current legislation allows for the squeeze-out of another shareholder (uitstoting) or withdrawal (uittreding) (the “dispute resolution”) in circumstances, but the court procedures for doing so are not currently perceived as accessible or practical. They cost a lot of time and money. For the time being, the possibility of having an enquiry into the affairs and policies of a legal entity (the “inquiry procedure”, de enquêteprocedure) is more frequently used, as it is generally perceived as somewhat more accessible and effective. However, this procedure also involves costs and takes time.

The law on adjusting dispute resolution and clarifying admissibility requirements inquiry procedure (Wet Aanpassing geschillenregeling en verduidelijking ontvankelijkheidseisen enquêteprocedure)

The “Wet Aanpassing geschillenregeling en verduidelijking ontvankelijkheidseisen enquêteprocedure” (also called “Wagevoe”) is designed to solve disputes within legal entities faster and more efficiently:

  • Thus, the Enterprise Chamber becomes the body to conduct both dispute resolution and inquiry proceedings. Concentrating proceedings at the Enterprise Chamber is expected to save time and money.
  • Whereas previously a squeeze-out/withdrawal procedure had to be started with a writ of summons and an inquiry procedure with a petition, all the aforementioned procedures will now be started with a petition. This makes it possible to combine the litigation procedure with the inquiry procedure. This is expected to save time and money.
  • It will also (presumably) become easier to squeeze-out a shareholder: previously, the courts only looked at the conduct of the “obstructive” shareholder as such, but with the introduction of the new law, other conduct, for example his conduct as a director, will also be considered. This may make the squeeze-out regime more attractive for resolving disputes between, for example, two shareholders also directors, where there is a deadlock not only in the general meeting, but also in the board.
  • In addition to shareholders, certificate holders will now also have the possibility to initiate an exit procedure. Especially for certificate holders whose position is similar to that of a shareholder, this seems to be a favourable instrument.
  • Also, the access requirements for the inquiry procedure with regard to capital providers of listed companies with an issued share capital not exceeding €22.5 million will be clarified: a capital provider will in principle have access to the inquiry procedure if it represents 1% or more of the issued capital or represents a value of at least €20 million.

Prevent escalation

Although the arrival of the new law is expected to make dispute resolution and the inquiry procedure more attractive, it is preferable to stay in control yourself. After all, litigation costs time and money. By drawing up your own arrangement, you can avoid ending up in court. After all, you will have a script ready for when shareholders get into conflict with each other. But even if you do end up in court, having your own arrangement is useful. After all, your preferred and tailor-made arrangement usually takes precedence over the legal dispute resolution scheme, unless a share transfer on the basis of that own scheme is not possible or extremely objectionable. So it is definitely worth making one.

Possibilities

For example, include your own arrangement in the articles of association and/or make a shareholder agreement stating what happens if there is a deadlock situation. For example, you can stipulate that each of the two shareholders in a deadlock situation has the right to initiate a bidding procedure in which one shareholder (X) has to offer his shares to the other shareholder (Y), in which the shareholder Y has the choice of taking over the shares or transferring his own shares to shareholder X for that price (“Russian roulette clause”) or that both shareholders make a closed bid for each other’s shares where the highest bidder is obliged to take over the other shareholder’s shares (as, for example, in the “Texas shoot-out clause” or the “Mexican shoot out clausule”).


There are numerous possibilities to make your own arrangement. Wieringa Advocaten will be happy to advise you on this and can draft a tailor-made arrangement for you. Feel free to contact us.


Are you already involved in a (shareholder) dispute? We will be happy to advise you and, if necessary, assist you in court.

Twenty-year anniversary of Wieringa weblog!

Posted on by Tess Boekema

Exactly 20 years ago today, we published our first blog post on www.wieringa.nl. That first blog post (in those days also referred to as a blawg) was written by Lex Bruinhof and – coincidentally – was about the scope of the intellectual property of sponsor brands during UEFA Euro 2004 in Portugal.

In the following twenty years, we published over 4,500 blogs. That way, we keep our clients, other interested parties and, of course, ourselves informed about recent legal developments in a pleasant way. The 20th anniversary of our weblog is a good opportunity to make our blogs available to even more people in the future. Therefore, from now on our blogs are also available in English! In other words, blawgs again.

If you have a question about a blog, please feel free to contact us.

Everyone is allowed to sell Big Macs from now on! Or aren’t they?…

Posted on by Arjen Schram

Last week, I saw an article of nu.nl in my LinkedIn feed with a title that caught my attention:“Anyone can sell a Big Mac (with chicken)“. When I then Googled I found several more newspaper articles with similar headlines and text. For example, NRC writes:“Anyone may now sell a ‘Big Mac’ if it is a sandwich with chicken“. And the AD writes: “Any burger baker may use the name Big Mac“. In case reading these headlines made you think “that sounds like a gap in the market!”, I advise you to read on quickly.

The newspapers seemingly draw this conclusion based on a recent European Court of Justice ruling. In it, the court ruled that the European Union Intellectual Property Office (EUIPO) was right to declare the trademark “Big Mac” lapsed for food prepared with poultry and sandwiches with chicken. However, how the various newspapers came to the conclusion on that basis that any burger baker can now sell his (chicken) burgers under the “Big Mac” brand is mystery to me. To prevent a lot of burger bakers from receiving a writ of summons from Ronald Macdonald in the near future, I think it would be good to dispel this myth of the quality newspapers in this blog.

The Big Mac trademark

On 1 April 1996, McDonalds filed the trademark “Big Mac” as a European Union wordmark. And whether you love or hate it, almost everyone will be familiar with the famous burger and its trademark. There is even an actual (somewhat playfully intended) economic index named after it – the Big Mac index – which was conceived by The Economist in 1986. After all, the Big Mac is sold almost everywhere in the world and contains roughly the same simple ingredients everywhere. A very strong trademark that many trademark owners can only dream of. Perhaps the trademark is almost as strong as the trademark owner’s own name registered as a trademark.

Goods and services

A trademark is always registered for specific goods and services. Thus, this also applies to the trademark “Big Mac”, which was registered in 1996 for, among other things, foods prepared with meat in general, but also for foods prepared with specific categories of meat, namely pork, fish and poultry. In addition, the trademark was specifically registered for sandwiches containing meat, fish, pork and chicken. Ironically, not specifically for sandwiches containing beef; while in practice the Big Mac is prepared with beef (India aside, but the burger has a different name there). The trademark was additionally registered for a wide range of other ingredients, including preserved and cooked fruits and vegetables, eggs, cheese, milk, milk preparations, pickles, desserts, biscuits, biscuits, biscuits, chocolate, coffee, coffee substitutes, tea, mustard, oatmeal, pastries, sauces, seasonings and sugar.

Declaration of revocation

There is an obligation on trademark owners to put a registered trademark to genuine use in relation to the goods and services for which it is registered. If a trademark owner fails to do so for a continuous period of five years, it risks revocation its trademark under Article 58(1)(a) of the European Union Trade Mark Regulation. Where a trademark owner takes action against an alleged infringer, the alleged infringer has the option of filing a counterclaim for revocation.

And this is what happened in 2017. An Irish burger restaurant called Supermac’ s got caught up in proceedings in which McDonalds invoked its “Big Mac” trademark. Supermac’s responded by filing a claim for revocation of the Big Mac mark. This was because, according to Supermac’s, McDonalds was using its trademark exclusively for the famous beef sandwich – which was not included in the trademark registration. The EUIPO went along with that argument and declared the revocation of the “Big Mac” trademark.

Fourth Board of Appeal

McDonalds appealed, arguing first that beef and chicken fall under the broader categories of meat and poultry. Moreover, it would have actually sold burgers containing both beef and chicken in the past five years. It presented very substantial evidence for this. To substantiate the sale of chicken burgers, it recited that, among other things, it allegedly sold a Big Mac in France that was prepared with chicken meat, as allegedly shown in the Facebook screenshot below.

The Fourth Board of Appeal ruled on 14 December 2022 that chicken meat does indeed fall under the broad category of poultry. Moreover, the evidence submitted would show that the trademark was indeed normally used for sandwiches prepared with beef and chicken meat. The decision to declare the trademark’s complete revocation was therefore reversed.

Normal use for sandwiches containing pork and fish, as well as all the other ingredients mentioned earlier, was not accepted by the Board of Appeal. While it is true that some ingredients were used in the preparation of the Big Mac, the Board of Appeal did not find it plausible that the public actually associates the trademark “Big Mac” with these ingredients. After all, no one talks about Big Mac vegetables, Big Mac cheese, or Big Mac pickles.

Court of Justice

The case eventually ended up in the Court of Justice. There, Supermac’s argued that the evidence previously submitted by McDonalds as far as the Big Mac with chicken was inaccurate. First of all, the advertising material supplied would only consist of drafts – as evidenced by the text “confidential” included therein. Drafts of advertising material obviously do not conclusively prove that a trademark is genuinely used in practice. Moreover, the screenshots provided by Facebook (including as shown above) would date from 2016; and thus fall outside the required five-year period. This, according to Supermac’s, did not prove that McDonalds had used its trademark for poultry and chicken sandwiches in the past five years. The ECJ agreed and rejected these goods.

Consistency

The consequence of the revocation is that the trademark Big Mac is no longer registered for food prepared with poultry and sandwiches with chicken. And that’s all there is to say about it. The fact that the trademark is no longer registered for food prepared specifically with poultry and specifically for chicken sandwiches does not mean that the trademark can therefore be freely used by anyone wishing to sell chicken burgers under the “Big Mac” trademark.

First of all, beacause the trademark is still registered for foods prepared with meat in general. When a court considers whether there is a likelihood of confusion, it will still take into account that meat and chicken are complementary to each other. The greater simply includes the lesser. The trademark registration may have become less specific, but that does not mean that the trademark has thereby lost its protection entirely in respect of the more specific goods that have been crossed out.

Trademark with a reputation

Moreover, McDonalds has another important legal ground to act against parties using the “Big Mac” trademark (or trademarks that are similar). The trademark is considered to be a trademark with a reputation. And such trademarks enjoy a very broad protection under Article 9(2)(c) of the European Union Trade Mark Regulation. In fact it does not even matterr for which goods or services an identical or similar trademark is used. As long as this causes confusion and where the use without due cause of the trademark would take unfair advantage, or be detrimental to, the distinctive character or the repute of the trademark. There is no doubt that this would be the case if anyone other than McDonalds were to use the “Big Mac” trademark for other goods or services. Be it chicken burgers or flip-flops. The Dutch newspapers quoted earlier have drawn a conclusion that (at least in terms of trademark law) is not based on anything.

Conclusion

Were you planning to start selling Big Macs prepared with chicken tomorrow? If so, you would be wise to reconsider your business plan. There could be an angry clown at your doorstep in no time… Of course, you can then still try to recover your losses from one of the quoted Dutch newspapers.

Employment law in the Netherlands – part 3 key features of Dutch Labor Law

Posted on by Joost Kokje

The Dutch labor law framework is characterized by a balance between employee protection and entrepreneurial flexibility, rooted in a tradition of social dialogue and progressive regulation. Understanding the key features of Dutch labor law is crucial for both employers and employees operating within the Netherlands. In this third part of our comprehensive guide into Dutch labor laws, we highlight some essential elements that define this legal landscape.

1. Employment Contracts

Dutch law recognizes three main types of employment contracts:

  • Permanent contracts: these are open-ended contracts that provide significant job security. Termination is subject to stringent legal requirements, such as prior court proceedings.
  • Fixed term Contracts: These are for a specified period and can be renewed up to three times within a three-year period before they automatically convert into a permanent contract.
  • Temporary Agency Contracts: These involve a tripartite relationship between the employee, the temporary employment agency, and the company where the employee actually works.

Each type of contract must comply with specific legal requirements regarding terms, conditions, and notice periods. Other contract types exist as well, such as payroll contracts.

2. Probationary Period

Probationary periods in the Netherlands are strictly regulated. For permanent contracts and fixed-term contracts longer than two years, a probationary period of up to two months is allowed. For fixed term contracts with a duration between six months and two years, only one month is allowed. Fixed term contracts shorter than six months, a probationary period is not permitted. During the probationary period, both employer and employee can terminate the contract with immediate effect for any reason other than discriminatory grounds.

3. Working hours and overtime

The standard workweek in the Netherlands is 40 hours, but variations exist depending on the sector and specific agreements. The Working Hours Act (Arbeidstijdenwet) governs maximum working hours, rest periods, and overtime:

  • Maximum hours: Employees can work a maximum of 12 hours per shift and 60 hours per week, though these limits are subject to averaging over a given period.
  • Overtime: Compensation for overtime is typically agreed upon in the employment contract or collective labor agreements (CLAs). There is no statutory requirement for overtime pay, but – at least in some sectors – it is regularly provided for.

4. Leave and holidays

Employees in the Netherlands are entitled to various types of leave:

  • Annual leave: The statutory minimum is four times the weekly working hours (e.g., 20 days for a full-time employee). Additional days are often provided by CLAs. Best practice as well shows employer offering 5 above statutory holidays on a yearly basis.
  • Public Holidays: There are generally eight public holidays, though the exact number can vary.
  • Sick Leave: Employers must pay at least 70% of the employee’s salary for up to two years of illness. The salary does not only include base wage, but potentially as well commission or bonus.
  • Parental Leave: Parents are entitled to parental leave, which can be taken up until the child reaches eight years of age.
  • paternity leave: relatively recently additional rights have been introduced, providing more support for new fathers. Now 5 additional weeks are offered to be taken within 6 months after the child is born. The employee’s wage is covered by the UWV up to 70%.

Other types of leave exist as well, such as pregnancy leave and short term and long term care leave.

5. Dismissal and Termination

Dutch law imposes strict rules on dismissals to protect employees from unfair termination:

  • Dismissal with permission: employers need prior permission from the Employee Insurance Agency (UWV) or a court to terminate an employment contract.
  • Grounds for dismissal: before permission is granted, valid reasons for termination need to be proven. Valid reason may be economic reasons, long-term incapacity, poor performance, and misconduct.
  • Notice period: the notice period varies based on the length of service, generally ranging from one to four months. CLA might deviate from this, just as employment agreements.

In cases of unfair dismissal, employees can claim compensation or reinstatement. Additionally, when the employer terminates the employee’s employment, in principle the employee is entitled to a statutory severance pay (transitievergoeding), being 1/3 of a monthly wage (including holiday allowance and commission and/or bonus) per year worked.

6. Collective Labor Agreements (CLAs)

Many industries and sectors in the Netherlands are governed by collective labor agreements, which set terms and conditions of employment, including wages, working hours, and benefits. These agreements are negotiated between employers’ organizations and trade unions and are legally binding if employers are a member of the employers organizations, if the CLA is incorporated into the employment agreement and/or if the CLA has been declared universally applicable by the Dutch government.

7. Employee representation

Dutch law promotes strong employee representation through Works Councils (Ondernemingsraad):

  • Works councils: companies with 50 or more employees are required to establish a Works Council. These councils have various rights, including the right to be informed and consulted on significant business decisions. As well they have a right of consent on several topics, such as the implementation of reward policies.
  • Representation in smaller companies: In smaller companies with between 10 and 50 employees, employee representatives may be elected to ensure workers’ voices are heard. When the employees request for such a representative, the company is obliged to appoint.

Conclusion

Dutch labor law provides a robust framework that balances the interests of employees and employers. Its key features, from comprehensive employment contracts and strict dismissal protections to detailed regulations on working hours and leave entitlements, make it one of the most protective labor systems in Europe. Understanding these laws is essential for maintaining compliant and fair workplace practices in the Netherlands.

Want to learn more e.g. through an in-house training? We are happy to provide.

The non-competetion clause – Special clauses in the employment agreement

Posted on by Guido Brandt

An employment agreement sets out essential terms such as the position, salary and holiday and sick leave rights. In addition, provisions are often included on, for example, probationary periods and joining a competitor after termination of the employment relationship. Separate different requirements apply to these ‘special clauses’, both legally and developed in case law. In this series, we discuss the most common special clauses. In this episode: the non-competition clause.

Background

The non-competition clause restricts an employee after termination of employment from performing work that competes with the former employer’s business. The purpose of the non-competition clause is to protect an employer’s market position. After all, an employee may use business-sensitive information at a competitor, potentially causing damages tothe former employer. The clause is explicitly not meant to bind employee. At play here is the fact that restricting work is contrary to the fundamental right to free choice of employment. For this reason, the non-competition clause is subject to strict requirements.

Non-competition clause requirements

First, a non-competition clause must be included in writing in the employment agreement. It is also sufficient that an employment agreement or letter refers to the non-competition clause in attached terms and conditions of employment, as long as an employee has signed the employment agreementor letter.

Second, a non-competition clause is only valid in an employment agreement for an indefinite period of time. The non-competition clause in a fixed-term contract is null and void in principle, unless an employer motivates that the clause is necessary because of important business interests. An employer must justify which business interests justify use of the clause, but also why the non-competition clause is necessary for the specific employee.

Furthermore, both indefinite and fixed-term agreements should specify the duration of the restriction and the geographical scope of the non-competition clause. Although this is not a legal requirement, case law shows that violation of this can be grounds to annul the clause in whole or in part.

Finally, the non-competition clause must be re-agreed if the non-competition clause has become significantly more onerous because of a (major) job change. This may be the case if an employee has been promoted to a significantly higher position. An employee must then again be given the opportunity to properly consider the consequences of the clause.

Validly agreed, now what?

If a non-competition clause is validly agreed in an employment agreement, an employer can claim that an employee complies with the non-competition clause. This is regularly accompanied by a penalty clause in the employment contract that serves as an incentive not to breach the clause. Conversely, an employee can claim (partial) annulment or suspension of the clause if he is unfairly disadvantaged by use of the non-competition clause. This is the case if an employee’s interest in being employed elsewhere, given the circumstances, outweighs the employer’s interest in binding the employee to the non-competition clause. Missing out on a higher salary elsewhere or better career prospects might be a factor in this. To accommodate each other’s mutual interests, parties can also agree to different arrangements regarding the non-competition clause in a settlement agreement.

Possible new requirements

Relatively recently, Social Affairs and Employment Minister van Gennip expressed her intention to tighten the requirements of the non-competition clause. Proposals include a limitation of duration and introduction of a fixed penalty. We previously wrote extensively about this bill.

Conclusion

We regularly help entrepreneurs and employees draft and assess non-competition clauses. Are you in doubt (following the above) about the validity and effect of your non-competition clause? Feel free to contact us, it is our pleasure to assist you.