News & Events

Reform of Dismissal Law and Flexible Employment Scheduled to Enter into Force Sooner

Submitted By Firm: Boekel De Nerée

Contact(s): Eugenie Nunes, Sascha C. Kuit

Author(s):

Hester Uhlenbroek and Afra Pepping

Date Published: 10/21/2013

Article Type: Legal Update

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In April of this year we informed you about the changes the government seeks to introduce on the basis of the Social Agreement in the years ahead in the field of dismissal law, the Unemployment Insurance Act, flexible employment and the employment of occupationally disabled persons. In order to gather the required support for the reforms, the government was forced to enter into an agreement with three opposition parties. The Budget Agreement of 11 October 2013 (again) entails changes to the plans, particularly to the time schedule.

Dismissal Law
The reform of dismissal law, which had been anticipated to enter into force by 1 January 2016, is scheduled to take effect six months earlier, i.e. from 1 July 2015. The proposed changes entail, among other things: 

  • dismissal application due to reorganisation and long-term occupational disability via Employee Insurance Agency (UWV);
  • dismissal application due to employment dispute or inadequate performance via subdistrict court;
  • subdistrict court judgment is open to appeal;
  • maximum transition payment of €75,000 (or an annual salary if that exceeds €75,000) in case of dismissal of employees with an employment contract of two years or longer.

Flexible Employment
The amendment of the rules governing flexible employment is also scheduled to enter into effect six months sooner, in this case with effect from 1 July 2014. This involves, among other things:

  • quicker conversion by operation of law of the final fixed-term employment contract into a contract for an indefinite period of time;
  • no probationary period in fixed-term contracts with a duration of up to 6 months;
  • no non-competition clause in fixed-term contracts.

Unemployment Insurance Act
The reform of the Unemployment Insurance Act (shortening of the duration of unemployment benefits to a maximum of two years and adjustment of the accrual of unemployment benefit rights) remains scheduled for 1 January 2016. From 1 January 2015 however, unemployed persons will have to accept all offered employment already after 6 months (now: 12 months), even if such employment is below the level of the job from which they have become unemployed.

Occupationally disabled persons
Finally, employers in the market sector in 2014, instead of 2,500 jobs additional jobs, will create 5,000 additional jobs for occupationally disabled persons. If at the end of 2015 (previously: 2016) not enough jobs have been created, then a compulsory quota will be introduced for the hiring of occupationally disabled persons.

Finally
The present Budget Agreement has increased the chance that the plans of the government will be converted into legislation.  In your planning, you can already take into account the accelerated introduction of the proposed measures in the field of dismissal and flexible employment. It is expected that the legislative proposals in which the measures are further elaborated will be submitted to the Dutch House of Representatives in the course of November 2013. We will keep you informed.

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