Most Read Contributor in Netherlands, January 2017
Although the dust has barely settled on the new employment and
dismissal laws contained in the Work and Security Act introduced in
2015 and 2016, more changes are on the horizon. Much depends on the
outcome of the Dutch elections this coming March, as it seems
unlikely that the current coalition will continue. The VVD, D66 and
CDA have already proposed significant reforms of the Work and
Security Act in their election programmes.
On a smaller scale, a legislative proposal has been submitted to
parliament to amend the Works Councils Act and extend the right of
works councils at large companies to receive information about
Work and Security Act (Wwz)
2017 may be a 'make or break' year for the new
employment and dismissal laws. While the Minister of Social Affairs
continues to stress the positive effects of the legislation that he
implemented during his term of office, criticism is increasing as
elections approach. According to VVD, D66 and CDA, the employment
sector, including the Wwz, needs thorough reform.
VVD wants to reintroduce the possibility of extending temporary
contracts more than twice, as was the case before the Work and
Security Act. They also want to abolish the universal applicability
of collective labour agreements, which would allow employers and
employees to make their own arrangements for their employment
contracts, making termination simpler and cheaper. Both VVD and CDA
want to introduce temporary contracts with a longer duration than
the current two year period. CDA also wants to ease the burden on
employers by shortening the statutory two-year period of employee
The D66 party envisages a system with shorter and cheaper
dismissal procedures, facilitating only one type of contract: the
permanent contract. The build-up of the transition payment should
start immediately, not after two years of employment. However, they
want to abolish the higher transition payment after ten years of
service and oblige employees to use the transition payment to
actually seek new employment. They also want to abandon the
'age proportionality' principle which applies in collective
reorganisations; instead of a selection based on years of service
per age group, employers should be allowed to select on the basis
The left-wing parties also have some suggestions: Groen Links
and SP want to make permanent contracts more attractive to
employers by increasing the employers' unemployment insurance
contributions on temporary contracts. The PvdA party also wants the
build-up of the transition payment to start from day one, while the
SP Party intends to double the transition payment from one-third to
two-thirds of the monthly salary per year of service.
Regarding self-employed persons, right-wing and left-wing
parties stand on opposite sides of the discussion. Right-wing
parties want to maintain the 'flexible shell' formed by
self-employed persons and let them choose whether or not they want
to pay for their own pension and disability insurance. Left-wing
parties want to reduce what they call excessive labour market
flexibility, which - in their opinion - has resulted in unfair
competition. They want to introduce compulsory minimum insurance
and pension for self-employed persons.
All in all, while we do not expect the employment law landscape
to change as drastically as it has done over the past two years,
reforms seem unavoidable. Which reforms will prevail will depend on
the composition of the government after the elections.
Works Councils Act (Wor)
The Works Councils Act may be amended in 2017. This would extend
the works council's right to information on salaries and
remuneration policies at large companies (meaning those with more
than 100 employees). The legislative proposal specifies that at
least once a year, the remuneration policy and the development of
remuneration proportions within the company will be discussed in
the consultation meeting with the works council. This right to
information extends to the content and amount of employee benefits
for each group of employees, including the management board and -
if applicable - the supervisory board. Although this does not
constitute a major change (the works council currently has the
right to be informed in writing on these subjects), the government
wants to use this proposal to stress the importance of transparency
in remuneration, in view of the social debate on high incomes.
It is currently unclear when the amendment will enter into
force. We will keep you informed on these and any other relevant
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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