Category: Weblog

Dutch employment law in 2025: this is what’s changing

Posted on by Annemarie Buwalda

As every year, 2025 brings updates to Dutch employment law. Below is an overview of the most significant changes.

Self-Employment and the lifting of the Enforcement Moratorium (under the DBA Act)

As of January 1, 2025, the so-called enforcement moratorium is lifted, allowing the Tax Administration to resume regular enforcement of false self-employment cases. The Tax Administration’s Explanation of the Assessment of Employment Relationships (in Dutch), published on November 1, 2024, clarifies that the assessment framework will be based on facts and circumstances of the specific cases. This framework stems from the criteria established in the Deliveroo ruling. In this case, the Dutch Supreme Court identified nine indicators that may point to the existence of an employment agreement. Please be referred to our previous blog for an elaboration on this ruling.

Enforcement of false self-employment will primarily target the client or employer. On 18 December 2024, the Tax Administration has indicated that, to ensure a ‘soft landing’ in 2025, no fines for omissions and neglect or fines for an offence will be imposed in 2025. However, corrective obligations and additional tax assessments may be imposed retroactively from 1 January 2025. For the period before this date, corrections can only be made in cases of malicious intent or if a previously issued directive was not (adequately) followed.

Additionally, the model agreeements approved and provided by the Tax Administration will be phased out as of 1 January 2025. Approved agreements that are currently being used, can still be used until their expiration, but new agreements are no longer issued. Since the existence of an employment agreement must be assessed based on all facts and circumstances of a particular case, these standardised agreements no longer provide certainty about employment status. We advise reviewing current agreements with freelancers to prevent potential enforcement actions by the Tax Administration.

The 30% Ruling

In 2024, the 30% ruling — a tax scheme that allows expats to receive part of their salary tax-free — was revised. The maximum allowance of 30% over three years was adjusted to a decreasing percentage: up to 30% for the first 20 months, 20% for the next 20 months, and 10% for the final 20 months. However, this adjustment will be reversed in 2025.

The Dutch government has a different cost-saving measure in mind: the maximum tax-free allowance will decrease from 30% to 27%. This change will however not take effect until 2027.

Employee CO₂ Emissions Reporting

Employers with 100 or more employees are required to report the CO₂ emissions from their employees’ commuting and business travel. Reports for the 2024 calendar year must be submitted to the Netherlands Enterprise Agency (RVO) by 1 July 2025.

Adjustments to Unemployment Insurance Contributions and the Overtime Exceptions

Since 2020, the unemployment insurance contribution rate (WW-premium) has differed based on the type of employment contract. A higher rate applies to flexible contracts, while a lower rate applies to permanent contracts, encouraging employers to offer more permanent contracts.

As of 1 January 2025, the high premium rate will rise from 7.64% to 7.74%, and the low rate will increase from 2.64% to 2.74%. Employers must pay the higher rate for employees with a permanent contract who work over 30% more hours than agreed upon in a calendar year. However, contracts for employees working an average of 35 hours or more per week are exempt. As of 2025, this exception is expanded to contracts averaging 30 hours or more per week.

Indexations

Minimum Wage Increase:

  • Effective 1 January 2025, the minimum hourly wage for employees aged 21 and older will increase by 2.75%, from €13.68 to €14.06 per hour. Minimum youth wages (ages 15 to 21) will also rise and can be found on the Dutch government’s website.
  • The next indexation will take place on 1 July 2025. The extent of this increase is not yet determined and depends on the estimated collective labor agreement wage increase by the Netherlands Bureau for Economic Policy Analysis (CPB) and will be announced by the Ministry of Social Affairs and Employment (SZW) in the spring of 2025.

Salary Criteria for Highly Skilled Migrants:

  • In 2025, the salary thresholds for highly skilled migrants will rise by 6.7%. For those aged 30 and older, the new threshold is €5,688 (excluding holiday allowance). For those under 30, the threshold is €4,171.

Allowance for working from home and commuting

  • In 2025, the maximum tax-free homeworking allowance increases from €2.35 to €2.40 per day. The maximum tax-free commuting allowance remains €0.23 per kilometer.

Officials’ Pay Cap Increase under the Standards for Remuneration Act (WNT)

  • The general remuneration cap under the Standards for Remuneration Act (WNT) is also increasing. The WNT sets limits on the maximum remuneration for top executives in the (semi-)public sector. For 2025, the maximum remuneration has been set at €246,000, representing a 5.4% increase compared to 2024.

Increased maximum severance payment

  • The maximum transition compensation increases in 2025. This amount is adjusted annually based on contractual wage trends. In 2024 the maximum compensation was €94,000 and rises to €98,000 in 2025.

Work-related costs scheme

  • The tax-free allowance percentage under the work-related costs scheme will increase for wages up to €400,000, rising from 1.92% to 2%. For wages above €400,000, the percentage remains 1.18%.

Flavour ban on e-cigarettes upheld in court

Posted on by Lucia Tellegen

A so-called flavour ban was added to the Dutch Tobacco and Tobacco Products Decree in 2022. This means it is prohibited to use flavour-determining additives as ingredients of nicotine-containing and non-nicotine-containing liquids for e-cigarettes.

Of the thousands of known additives, only 16 are exempted in the Ministerial Tobacco and Tobacco Products Regulation. These additives taste like tobacco or are in tobacco. And no flavour other than tobacco can be made with them. The idea is that tobacco-flavoured e-cigarettes can be used as a smoking cessation tool.

A UK tobacco goods manufacturer asked the court in The Hague to rule on the unlawfulness of the flavour ban. This ruled today (ECLI:NL:RBDHA:2024:17892).

Flavour ban or ingredient ban?

The recitals of the European Tobacco Products Directive express that the responsibility for regulating flavours of e-cigarettes remains with the member states and that the regulation of ingredients is a harmonised area. Thus, the Tobacco Products Directive does not apply to regulating flavours. Member states have more freedom in this regard.

In vain, the manufacturer is still trying to bring the flavour ban under the scope of the Tobacco Products Directive. This is because the manufacturer argues that the flavour banis shaped by a list of permitted ingredients. The court does not go along with this. The fact that the Tobacco Products Directive also lays down rules with which nicotine-containing liquids must comply does not mean that it is also the intention of the Tobacco Products Directive to harmonise the regulation of flavours. Indeed, the recitals expressly show the opposite.

Free movement of goods

One of the pillars of the European Union’s internal market is the principle of free movement of goods. This means that goods should be able to circulate in the internal market without internal borders and unjustified restrictions. The taste ban violates this.

However, not every infringement of the free movement of goods is unlawful. Article 36 TFEU allows an infringement of the free movement of goods, among other things, if the infringement is appropriate, necessary and proportionate. The latter means that the infringement is necessary to achieve the stated objective (of general interest) and that this objective cannot be achieved by measures less restrictive of the free movement of goods.

Taste ban necessary and appropriate

The court ruled that the necessity and appropriateness of the flavour ban have been sufficiently demonstrated by the State. E-cigarettes are harmful to (public) health. Only the degree of harmfulness is still subject to (some) scientific uncertainty. The attractiveness of flavours to young people is also sufficiently established. One study shows that flavours are an important reason for young people to try e-cigarettes. Another study shows that flavours reduce the perception of harm.

The manufacturer’s objections are of insufficient weight. For instance, according to the court, there is no unequivocal evidence that e-cigarettes (with flavours) are an effective means of quitting smoking. In any case, the effectiveness of e-cigarettes as a quitting tool is lower than other aids.

Taste ban proportionate

Against the extensive analysis of the appropriateness and necessity of the flavour ban, the court’s assessment of the proportionality of the flavour ban nevertheless compares rather poorly. The manufacturer had argued that less drastic measures with the same effect as the flavour ban were also conceivable. The manufacturer had pointed, among other things, to exclusive sales in speciality shops, a ban on mentioning appealing to young people on packaging, providing information to young people and intensifying supervision aimed at preventing sales to young people.

The court considered that the State does not have to prove that the protection of public health cannot be achieved by other conceivable measures. Therefore, according to the court, the State does not have to rebut the efficacy of all conceivable measures.

Surely, the court is shortchanging itself here. It follows, for example, from the CJEU ruling on Scotch Whisky Association(ECLI:EU:C:2015:845) that a national court must assess objectively whether the evidence presented by the Member State concerned could reasonably lead it to consider that the means chosen are appropriate to achieve the objectives pursued, and whether those objectives could also be achieved by measures less restrictive of the free movement of goods. And it follows from the CJEU judgment Commission v Spain(ECLI:EU:C:2011:172) that a Member State must attach an analysis of the appropriateness and proportionality of the restrictive measure it adopts to the reasons it invokes to justify a derogation from the principle of freedom of establishment, and must substantiate its argument with precise data.

Cutting corners

The taste ban has not been reviewed for proportionality as intrusively as might be expected. As a result, the final judgment – that the flavour ban is not unlawful – is not convincing.

Amsterdam canal cruise volume policy unlawful according to Council of State

Posted on by Lucia Tellegen

In a ruling (ECLI:NL:RVS:2024:3732), the Administrative Law Division of the Council of State ruled that the municipality of Amsterdam’s new policy for passenger shipping on Amsterdam’s inland waterways violates the Services Directive. The municipality of Amsterdam will therefore (as in 2017) have to go back to the drawing board. Wieringa Advocaten was involved in this case on behalf of Rederij Lovers.

Volume policy for passenger shipping

With effect from March 2024, Amsterdam’s municipal executive established a so-called volume policy for passenger shipping in Amsterdam. Briefly, this set the maximum number of operating licences for passenger shipping at 550.

Under the Services Directive, such ‘scarce licences’ cannot be granted indefinitely. Otherwise, potential applicants would de facto be barred from entering the market. Because of the volume policy, college would in future be allowed to grant operating licences only for a fixed period. At the end of this fixed period, the operating licences that become available would be distributed among potential applicants.

The Amsterdam college considered that Amsterdam shipowners’ operating licences, which had been granted for an indefinite period of time, interfered with the volume policy. So it revoked the operating licences of all Amsterdam passenger shipping. In 2022, a first part of these licences was redistributed among potential candidates.

A major blow for the Amsterdam shipowners. They did not leave it at that and went to the administrative court.

Services Directive

The Services Directive (Directive 2006/123/EC) aims to ensure the free movement of services and freedom of establishment. That is, there is an internal market within the European Union in the sense of an area without internal borders whereby Member States allow service providers originating from other Member States into their own territory. Restrictions on this (such as authorisation schemes) are only justified if they are non-discriminatory, necessary and proportionate.

In the Services Directive review, things went south for the Amsterdam municipality.

Compelling reason of public interest

Central to the debate on the presence of compelling reasons of public interest was the college’s assertion that liveability in Amsterdam is under pressure. The college wanted the volume policy to prevent the already existing nuisance from increasing further.

However, the Division held that all the research reports submitted by the college did not show that passenger shipping was partly responsible for some of the nuisance experienced by residents in the city. Thus, the college had not proved that passenger shipping partly weighs on the liveability of the city. The survey reports mainly show that the nuisance comes from pleasure and illegal passenger shipping, with residents experiencing nuisance from screaming boaters, excessive drinking and excessively loud music, among others.

Moreover, the college wants a balance between facilities for residents and facilities for tourists, but according to the Division, nowhere does it show that the supply for passenger shipping and facilities for residents is out of balance.

Proportionality of volume policy

However, the Division does consider that the board has sufficiently demonstrated that the interests of smooth and safe passage and the fair distribution of available space are at stake. These interests can therefore serve as justification for the volume policy.

However, the college had not sufficiently substantiated that these interests are coherently and systematically pursued. Indeed, the college had not demonstrated it also takes sufficient measures aimed at other users of the canals. For example, by also placing restrictions on the use of Amsterdam’s canals by pleasure boats.

Effects of the ruling

Amsterdam shipowners can breathe a sigh of relief for now; their indefinite operating licences are revived. The college will have to go back to the drawing board for new policies.

The Lex Silencio Positivo, Environment Act and the Services Directive

Posted on by Lucia Tellegen

It is widely reported that the Dutch legislator has abolished the so-called Lex Silencio Positivo (LSP) in the Environment Act. The Services Directive means that that message may still be somewhat premature.

Difference Lex Silencio Positivo under the Awb and the Services Directive

In our national law, the Lex Silencio Positivo is regulated in general terms in section .4.1.3.3 of the Awb (General administrative law act). Section 4:20b Awb provides that a requested decision is granted automatically if the application for a decision is not decided on in time. This is deemed to be a decision that takes effect three days after the decision period has expired. Section 4:20a of the Awb contains an important restriction: the Lex Silencio Positivo only applies if this has been determined by statutory provision. The applicability of the Lex Silencio Positivo therefore requires an explicit decision by the legislative body.

In the European Services Directive, this is just the opposite. Indeed, it follows from Article 13(4) that the Lex Silencio Positivo applies unless justified by overriding reasons of public interest, including a legitimate interest of a third party. Thus, to authorisation schemes that fall under the Services Directive, the Lex Silencio Positivo applies unless otherwise provided by statutory provision. There must be a good reason for this.

Lex Silencio Positivo abolished in the Environment Act?

In the Explanatory Memorandum(Parliamentary Papers II 2013/14, 33 962, no. 3), the Minister of Infrastructure and the Environment describes that the Lex Silencio Positivo brings complications in light of a number of innovations envisaged by the Environment Act. According to the minister, these include the more far-reaching integration of consents in the single permit in combination with bringing more single permits under the regular preparation procedure. In addition, the Lex Silencio Positivo does not fit well with the greater discretion that will be given to administrative bodies for assessing applications for environmental permits. When assessing permit applications, tailor-made solutions will therefore be necessary, and environmental permits will hardly have any standard regulations attached to them. Moreover, application of the Lex Silencio Positivo creates problems when it comes to the allocation of functions to locations by the national and provincial governments.

Abolition of Lex Silencio Positivo in the Environment Act justified?

In the Explanatory Memorandum, the minister acknowledges that environmental permits integrate consents that in part qualify as a permit covered by the Services Directive.

For some of these environmental permits, the Water Framework Directive already provides that the Lex Silencio Positivo does not apply. For another part of these environmental permits, the Mer Directive or the Industrial Emissions Directive requires a prior substantive assessment of the permit application or permit requirements.

On other environmental permits, the Minister stated that exclusion of the Lex Silencio Positivo is justified due to compelling reasons of public interest. These are:

  • the environmental permit for the fire-safe use activity;
  • the environmental permit to deviate from all rules in the environmental plan;
  • the environmental permit for the environmentally harmful activity for which although no substantive assessment is required under European law;
  • the environmental permit for mining activities;
  • The environmental permit for the Natura 2000 activity;
  • the environmental permit for the flora and fauna activity;
  • the environmental permit for activities for which the water board ordinance prohibits carrying out an activity without an environmental permit;
  • the provincial environmental regulation;

Case law on the Environment Act will have to show whether case law considers the minister’s justification sufficient.

The Lex Silencio Positivo and (deviating from) the environmental plan

In particular, the environmental permit to deviate from all rules in the environmental plan is an interesting one. The minister considers that the generic possibility offered to apply for a permit to deviate from all rules in an environmental plan requires a prior assessment of the application on the risks of this for the physical living environment. Among other things, the minister points to the risks to spatial planning, the environment or safety, whereby the competent authority must weigh up different interests and where customisation is required. According to the Minister, application of the lex silencio positivo entails the risk of granting an environmental permit that leads to irreparable damage to the physical living environment.

The justification for excluding the Lex Silencio Positivo is thus a particularly general one. All the more so given the ongoing debate on what kind of permit systems can be included in an environmental plan. Municipalities are given until 2032 to incorporate rules in municipal regulations that deal with the physical living environment into the environment plan. However, it is not always clear whether a municipal permit system is about the physical living environment. Consider, for example, the permit systems for events and catering establishments in APV. It is not said that the justification given by the Minister in the Explanatory Memorandum is sufficiently valid for all conceivable permit systems in environmental plans.

In short: despite the news that the Lex Silencio Positivo has been abolished in the Environment Act, it is still important to be critical. Especially in the case of permit systems for services in environmental plans, it may pay to question the exclusion of the Lex Silencio Positivo. Who knows, it might result in a permit granted by operation of law.

The external regulatory authorities

Posted on by Michelle Sangers

External regulatory authorities can influence the composition of a company’s board, decision-making in the company and the functioning of the company’s board in various ways. The extent to which external regulatory authorities have this influence depends on the laws and regulations applicable to the relevant company. Often, the influence of external regulatory authorities in specific sectors is detailed in sectoral governance codes. Companies applying these codes take into account the influence of their external regulatory authorities as a matter of course.

As part of the Corporate Governance blog series, in this blog we look at two examples of how an external regulatory authority can influence the functioning of a company.

Influence on information, decision-making and functioning of the board

For the board of a company to perform its duties properly, it is important that it receives the necessary information. External supervisors can play an important role in providing the management board with such information. Examples include information on the company’s financial condition.

A large company is obliged to have its financial statements audited by an external auditor every year (Article 2:393(1) of the Civil Code). The Corporate Governance Code requires the board of a listed company to have regular contact with the external auditor.

The auditor shall audit whether the company complies with the statutory requirements in respect of the financial statements, the management report and all related matters. After his audit, the auditor shall report to the Management Board and the Supervisory Board. The result of the auditor’s examination shall be reflected in a report which shall be included among the other information in the financial statements and shall thereafter be provided to the general meeting.

Vice versa, of course, it also applies: the board should ensure that an auditor has timely access to all the necessary information to perform his assignment.

Influence on the composition of the board

The composition of the board can also be influenced by external regulatory authorities. For instance, the Dutch Financial Markets Authority, The Dutch Central Bank and the Housing Corporation Authority assess the reliability and suitability of policymakers, such as directors, at a company. These audits of public-interest entities, enshrined in various laws (Wft, Wta and the Housing Act) and policy rules (e.g. the Policy on Suitability 2012, the Policy Wta and the Policy Housing Corporations Authority 2024), often stem from the idea that there is a strong public interest in guaranteeing the quality of statutory audits that these organisations are required to conduct.

By testing directors for suitability, the board will in practice only be composed of directors who the relevant external regulator deems suitable as directors. Within this framework, the supervisory authorities Authority for the Financial Markets and De Nederlandsche Bank also test whether the directors complement each other collectively and expressly take into account the importance of diversity, whereby persons who do not have a distinct background in the financial sector can also successfully pass the test, as long as they bring with them a specific expertise that is still lacking. So these supervisors also have a say in the matter when it comes to diversity.

Wieringa Advocaten

Would you like to know specifically what the impact of external supervisors is in your case? Then feel free to contact us for tailored advice.

Employment law in NL: Part 6 Collective Labor Agreements (CLAs)

Posted on by Joost Kokje

Understanding Collective Labour Agreements in the Netherlands

The Dutch labour market is regulated by various legal frameworks designed to ensure fair treatment, decent wages, and good working conditions. Among these frameworks, collective labour agreements (collectieve arbeidsovereenkomsten or CAOs) play a crucial role. In this blog I will explain in a short overview what a CLA entails.

What is a Collective Labour Agreement (CLA)?

A CLA is a written agreement between employers (or employer organizations) and employee unions. It sets out employment terms such as wages, working hours, holiday allowances, pension contributions, and other job-related benefits. These agreements apply to specific industries, sectors, or even individual companies.

How are CLAs negotiated?

Negotiating a CLA involves collective bargaining between employers’ associations and trade unions. Both parties meet periodically to discuss employment conditions and reach a mutually acceptable agreement. Once signed, the CAO becomes binding for all employers and employees within the scope of the agreement.

Types of CLAs in the Netherlands

There are two primary types of CLAs:

  1. Sector-Specific CLAs: These cover an entire industry or sector, such as healthcare, retail, or construction. Employers within the sector can be bound to apply this CLA through different methods as explained below.
  2. Company-Specific CLAs: These apply to a single company or organization. Large corporations often negotiate their own CLAs directly with unions.

Legal Framework and Binding Nature

In the Netherlands, CLAs can be declared legally binding by the Ministry of Social Affairs and Employment. This declaration ensures that all employers within a specific sector must adhere to the CLA, even if they are not members of the negotiating employer’s association.

Alternatively, CLAs can apply if the employer is a member of the employers’ association who agreed upon a CLA with the unions. Furthermore, CLAs can apply if the employer incorporated its applicability into the employees’ employment agreements.

Key Elements of a CLA

Typical provisions found in a CLA include:

  • Wages and Salary Increments: Minimum pay and scheduled raises.
  • Working Hours: Standard working hours and permissible overtime.
  • Leave and Holidays: Annual leave, maternity/paternity leave, and sick leave policies.
  • Pensions and Insurance: Contributions to pension funds and insurance coverage.
  • Health and Safety Standards: Measures to ensure workplace safety.

Why Are CLAs Important?

For employees, Clas guarantee fair employment conditions, job security, and protection against arbitrary changes in work terms. For employers, they provide clear guidelines and help prevent labour disputes (although currently there are a lot of disputes between employers and unions e.g. on wage increases). Moreover, CLAs contribute to industrial peace and a stable labour market.

Conclusion

Collective labour agreements are in some sectors a cornerstone of employment relations. The intention is that they promote fairness and stability by ensuring that employees receive equitable working conditions while giving employers clear regulatory frameworks to follow. Understanding the CLA system helps both employees and employers navigate the Dutch labour market effectively and maintain a harmonious working environment.

The composition, functioning and decision-making of the board

Posted on by Michelle Sangers

By law, the board of a Dutch (private) legal entity is ‘charged’ with managing that legal entity. This applies not only to the BV (Article 2:239 of the Dutch Civil Code (DCC)) and the NV (Article 2:129 DCC), but also, for example, to the association (Article 2:44 DCC) and the foundation (Article 2:291 DCC).

In discharging its duties, the board of a Dutch private limited company (besloten vennootschap (BV)) and public limited company (naamloze vennootschap (NV)) must be guided by the interests of the company and its affiliated enterprise. What these interests entail depends on the specific circumstances. The law does not stipulate how a board must govern. In principle, the board itself determines how it governs (the so-called board autonomy). However, it must do so within the limits of the law, the applicable articles of association and the company’s statutory objectives. The composition, functioning and method of decision-making of the board depends on how these limits are arranged. As part of the Corporate Governance Blog Series, we address these elements of governance in this blog.

Composition of the board

In order to properly perform the board duties, directors are obviously needed. It is important that the board is composed in such a way that the necessary expertise is present. The number of directors that must be part of the board also determines how flexible the board is in taking decisions. What ‘expertise’ is required varies by company and the sector in which it operates. Sectoral legislation and sectoral governance codes may impose sector-specific requirements on the composition of a board. Moreover, several sectors have regulatory authorities that assess the competence of board members. A good example is the assessments conducted by the Dutch Central Bank and the Dutch Financial Markets Authority for board members active in the financial markets.

Not only expertise is important for a good board governance but also diversity in nationality, gender, knowledge and experience, can contribute to an effective board. After all, a diverse composition can provide a variety of perspectives. Differing views, contradiction, cooperation and cohesion are important for having good and valuable discussions, which contributes to effective decision-making and an effective and well-functioning board.

Decision-making by the board

The manner in which the board makes decisions plays a significant role in its functioning, in addition to its composition. If only because of the practical nature that certain regulations may have. For example, a decision may be subject to the prior approval or advice of another body of the legal entity. Failure to comply with such a requirement may have far-reaching consequences for the status of the board decision taken.

The method of decision-making may be specified in the articles of association, and possibly in board regulations. The general principle is that every director can participate in the decision-making of the board. This is different if the director in question has a direct or indirect personal interest that conflicts with the company’s interests. In that case, a director will not participate in the board’s deliberations and decision-making. Conflicts of interest should be avoided as much as possible. In general, directors are not readily permitted to compete with the legal entity, to accept (substantial) donations from the legal entity or to take advantage of corporate opportunities that accrue to the legal entity.

To make decisions, the board needs to be well informed. In this context, it is important that the board has frequent contact with the other bodies within the legal entity and the stakeholders of the legal entity. The board would do well to set up an information system that results in all important information being available in time to both the board and any other bodies of the legal entity.

Functioning of the board

Not only the board’s composition, but also its method of decision-making determines its functioning. To ensure that the board continues to function well, it is advisable to periodically evaluate the boundaries within which the board governs and the suitability of directors. This is relevant not only to get a picture of the (historically) functioning, or not, of the incumbent board, but also to ensure the proper functioning of the board in the future.

Do you have any questions following this blog? If so, feel free to contact us. We will be happy to advise you.

Employment law in NL: Part 5 Employee Rights and Protections

Posted on by Joost Kokje

The Netherlands is renowned for its progressive labor laws, which offer strong protections for employees. Dutch employment law strikes a balance between protecting workers’ rights and fostering a flexible, productive economy. In part 5 of this blog series, we cover the key aspects of employee rights, being safe working conditions, leave arrangements, benefits, and work-life balance.

1. Safe Working Environment

The Dutch Working Conditions Act (Arbowet) ensures that all employees have the right to a safe and healthy working environment. Employers are obligated to take measures that guarantee the well-being of their staff. Key responsibilities include:

  • Risk Assessment: Employers must conduct regular risk assessments to identify and minimize potential hazards in the workplace.
  • Health and Safety Training: Companies are required to provide training for employees to handle work-related risks and emergencies.
  • Occupational Health Services: Employers must have access to an occupational health service (arbodienst) or a certified health and safety expert. These services help manage work-related illnesses, stress, and absenteeism.
  • Stress and Burnout Prevention: Stress is a growing concern in modern workplaces, and Dutch labor laws mandate that companies take proactive steps to prevent work-related stress and burnout by offering flexibility and adequate breaks.

If a company fails to provide a safe environment, employees can file complaints with the Labor Inspectorate, which has the authority to enforce regulations and impose penalties. For employees working remotely, a easier regime applies to the employers to make sure the employees’ working environment is safe.

2. Leave Arrangements

The Netherlands offers several statutory leave arrangements for employees to use depending on the specific situation. These arrangements should contribute to a healthy work-life balance. Examples are:

  • Paid Annual Leave: Full-time employees are entitled to at least four times the weekly working hours in paid vacation per year (e.g., 20 days for a 5-day workweek). Employers are required to pay employees their wage during their vacation time.
  • Sick Leave: Employees are entitled to sick leave and can receive up to 70% of their wages (capped at the statutory maximized daily rate) for a period of up to two years. Employers must facilitate a return-to-work plan in collaboration with the employee and occupational health services.
  • Parental Leave: Both parents are entitled to unpaid parental leave (26 weeks) until the child turns 8. Additionally, new parents can benefit from paid parental leave since 2022, which covers up to 9 weeks at 70% of the employee’s salary, maximized at the statutory daily rate.
  • Maternity Leave: Pregnant employees are entitled to a minimum of 16 weeks of maternity leave, with full salary compensation. Women can start this leave 4 to 6 weeks before their due date.
  • Paternity Leave: Fathers or partners are entitled to 5 days of paid paternity leave after the birth of a child, plus an additional 5 weeks of partially paid leave at 70% of their salary.

3. Employee Benefits

The Dutch welfare state provides a wide range of employee benefits, ensuring that workers have access to healthcare, social security, and pension schemes.

  • Social Security: Employees contribute to social security, which covers unemployment benefits, disability insurance, and sick leave compensation. If an employee becomes unemployed through no fault of their own and if they worked sufficient days in a year and year in conjunction, they can claim unemployment benefits for a period of time based on their employment history.
  • Healthcare: Every Dutch resident, including employees, is required to have health insurance. Employers can, but are not required to provide supplementary health insurance schemes and may cover part of the cost.
  • Pension Plans: Dutch employees automatically participate in the national pension scheme (AOW), which is complemented by mandatory or company-based pension plans. Many companies also offer additional pension contributions as part of the employment package. This is either mandatory through CLA applications or voluntary through enrolment via a pension insurer.

4. Work-Life Balance

The Netherlands is famous for its emphasis on work-life balance. According to the OECD, Dutch workers have one of the shortest average workweeks in Europe.

  • Flexible Working Hours: The Working Hours Act regulates the number of hours employees can work each day and week, including rules for overtime and night shifts. It limits workdays to a maximum of 12 hours and workweeks to a maximum of 60 hours.
  • Part-Time Work: Part-time work is very common in the Netherlands, particularly among women. Employees have the right to request part-time hours under the Flexible Working Act, which employers are required to consider unless substantial business interests require otherwise.
  • Remote Work: Remote and hybrid working models are increasingly common. While the law doesn’t yet guarantee the right to work from home, the COVID-19 pandemic has made it more mainstream, and many companies now offer remote work options to promote work-life balance. Although we now do see a trend of employees returning to the office more often as well.
  • Work and Care: Employees with caregiving responsibilities for sick family members or children can request care leave. Short-term care leave allows workers to take up to twice the number of weekly working hours within a 12-month period, while long-term care leave provides for 6 weeks of unpaid leave.

5. Protection Against Unfair Dismissal

Dutch labor law protects employees from unfair dismissal. Employers must have valid reasons to terminate a contract, such as poor performance, misconduct, or financial necessity. If dismissed without just cause, employees can challenge the dismissal through the courts. Severance pay, known as transition compensation, is provided in most cases of involuntary termination.

  • Notice Period: Employers are required to provide notice before terminating an employee. The length of this notice period depends on the employee’s tenure.
  • Termination by Mutual Agreement: Many terminations in the Netherlands occur by mutual agreement, and it is common for employees and employers to negotiate severance packages.

We explain more about termination procedures and protections in part 4 of our series.

Conclusion

The main views are that Employee rights and protections in the Netherlands are among the most advanced in Europe, reflecting a commitment to both the well-being of workers and the needs of businesses. From safe working environments to extensive leave arrangements and robust social security benefits, Dutch labor laws prioritize work-life balance and fairness in the workplace. These regulations not only protect employees but also foster a more engaged and productive workforce. Despite these positive notes, there are still challenges as well, such as the equality in pay between men and woman, flexible working arrangements and payment during illness (which is seen by employers as far too long).  

Want to know more or need guidance? Please contact us.

Stakeholders

Posted on by Michelle Sangers

In continental Europe, the way the company and its associated enterprise are organised is based on the “stakeholder model”, also known as the “Rhineland model”. This model views the company and its business as a community of interests in which the factors of labour and capital work together in harmony as far as possible. It follows from this model that directors must carefully consider the interests of all stakeholders involved in the company and its affiliated enterprise, which was confirmed in the Dutch Supreme Court’s Cancun decision.

Who or what are stakeholders?

Stakeholders, according to the Corporate Governance Code, are individuals or groups that (in-)directly influence, or can be influenced by, the achievement of the company’s objectives. Examples of stakeholders are:

  • employees
  • shareholders
  • other capital providers
  • suppliers
  • customers
  • other interested parties

Stakeholders and the law

The powers and rights of certain stakeholders, such as shareholders and employees, with which they can exercise power over (the management of) the company are regulated by law.

Thus, the relationship between the company and its employees (representatives) in terms of employee participation is governed, among other things, by the Works Councils Act ( WOR). Therein, for example, the works council is granted an advisory right in certain cases.

For individual shareholders, the relationship between the company and them as such is largely governed by the Civil Code Book 2 – Legal Entities. These include the right to institute certain proceedings (e.g. the annual accounts procedure/dispute settlement procedure), various information rights, various financial rights and control rights.

Stakeholders and the corporate governance code

Not only in law, but also in the Corporate Governance Code, certain stakeholders are addressed. For example, for employees (representatives) at listed companies, in addition to the WOR, a number of additional provisions of the Corporate Governance Code apply to culture and contacts between the supervisory board and the employee participation body, cf. e.g. article 2.5.2 Corporate Governance Code and article 2.5.3 Corporate Governance Code.

The Corporate Governance Code also provides that the listed company shall outline a policy for an effective dialogue with relevant stakeholders on the sustainability aspects of the company’s strategy (Article 1.1.5. Corporate Governance Code). Furthermore, the Corporate Governance Code provides that the management board of a listed company, under the supervision of the supervisory board, shall focus on the long-term value creation of the company and its affiliated enterprise and weighs the relevant interests of stakeholders to this end (principle 1.1 Corporate Governance Code). Such weighing of interests may result in the management board disregarding certain stakeholders, but not necessarily: the Corporate Governance Code does not prescribe what the outcome of the weighing of interests and the consequences to be attached thereto should be in concrete cases.

Wieringa Advocaten

Are you curious about what rights you have as a stakeholder? Or are you a director of a company and wondering to what extent you need to take certain stakeholders into account when making decisions? If so, feel free to contact us. We will be happy to advise you.

The function of the Enterprise Chamber

Posted on by Michelle Sangers

What is the Enterprise Chamber?

The Enterprise Chamber, also known as “OK”, is a special division of the Amsterdam Court of Appeal. The Enterprise Chamber adjudicates disputes at Dutch companies and specialises in hearing and deciding various proceedings in the field of corporate law.

The Enterprise Chamber consists of a chairman, two counsel (“judges of the court”) and two practitioner experts who are not judges. We call these experts “councils”. This allows the Enterprise Chamber to specialise.

What does the Enterprise Chamber do?

Proceedings before the Enterprise Chamber usually aim to remediate and restore healthy relations within the company, provide disclosure and determine who is responsible for mismanagement (if any) within the company.

The Enterprise Chamber handles disputes between shareholders, as well as disputes between shareholders and directors, directors among themselves or shareholders/directors with the supervisory board. Employees can be represented by the Works Council (OR) or trade unions. Depending on which proceedings you wish to bring before the Enterprise Chamber, separate admissibility requirements (“entry requirements”) apply.

The Enterprise Chamber is best known for proceedings, in which the applicant asks the Enterprise Chamber to investigate the affairs of the company and its affiliated enterprise (the inquiry procedure).

In addition to the aforementioned proceedings, the Enterprise Chamber handles many other proceedings, such as:

Questions?

Have you become curious about the Enterprise Chamber and want to know more? Then also read our Enterprise Chamber Series.

Wondering if legal procedings before the Enterprise Chamber could also do something for your situation? If so, feel free to contact us. We will be happy to advise you.