Quarterly Insights Q2 2026: Netherlands Employment Law

Welcome to our quarterly employment law update. This update contains a selection of the most important employment law developments in the Netherlands, with respect to legislation and case law.

Legislation

Bill on the modernization of the non-compete clause submitted to the Council of State for advice

The Dutch government has been considering a revision of the rules governing the non-compete clause for many years. The most recent milestone was the public consultation on a draft bill in 2024. On 26 June 2026, the government took a further step and submitted a bill on this subject to the Council of State (Raad van State) for advice. This version of the bill has not been published.

From the government's announcement, we understand that:

• the maximum duration of a non-compete clause will be 12 months;
• the geographic scope of the non-compete clause will have to be specified; and
• mandatory compensation will be payable when the employer invokes the non-compete clause.

Based on the earlier draft bill that was put out for consultation, we also expect that a non-compete clause will have to include a written justification of the compelling business interests that make the clause necessary. This requirement would apply to both fixed-term and indefinite-term employment contracts.

That earlier draft also contained transitional rules (overgangsrecht). Non-compete clauses that were validly agreed before the bill enters into force will remain valid. However, the rules on invoking such clauses will apply as soon as the bill takes effect. These include the maximum duration of 12 months and the mandatory compensation.

We will, of course, keep you informed of further developments, including on the important issue of the transitional rules.

Update July 3, 2026: The bill submitted to the Council of State has now been published and can be consulted here.

Bill to implement the Directive on Pay Transparency between men and women submitted to the House of Representatives

On May 21, 2026, the bill to implement the Directive on Pay Transparency Between Men and Women was submitted to the House of Representatives. For an overview of the key provisions, see our earlier blog post.

Compared to the earlier consultation draft, the bill introduces three notable changes:

• An employer is now defined as the party with whom the employee has entered into an employment contract, rather than being linked to the concept of "company" in the Works Councils Act.
• The term "pay structures" has been replaced by "a system of job evaluation and classification".
• Employers are no longer required to have the works council confirm the accuracy of information provided under the reporting obligations.

On June 19, 2026, a public consultation opened on the draft implementing decree. This subordinate legislation elaborates on the implementation bill and addresses the reporting obligation, the definition of pay-related terms for the reporting obligation and the disclosure of inspection data. The consultation is open until July 31, 2026.

If the Senate also approves the bill, it can take effect on January 1, 2027 (past the Directive's implementation deadline of June 7, 2026). The first group of employers subject to the new rules, those with at least 150 employees, must then report on pay gaps for the calendar year 2027 by June 7, 2028. Employers with 100 to 150 employees will follow in 2031, reporting on pay gaps from 2030.

Bill to limit the transition allowance compensation scheme: complete abolition of compensation

On April 25, 2026, the Minister informed the Dutch House of Representatives that the bill to limit the compensation scheme for transition allowances in the event of dismissal has been postponed. The originally intended effective date of July 1, 2026 has been pushed back to January 1, 2027.

Under existing Dutch law, employers who pay a statutory transition allowance (transitievergoeding) upon dismissal of a long-term disabled employee may claim compensation from the Dutch Employee Insurance Agency (UWV). The initial aim of the bill was to restrict this compensation to small employers only. However, the Minister has now announced a significant amendment that goes much further: under the revised proposal, no employer regardless of size, will be eligible for compensation of the transition allowance upon dismissal following long-term disability, nor upon termination due to business closure resulting from the employer's retirement or death.

The Minister acknowledges that this change could lead to a resurgence of so-called "dormant employment relationships" (slapende dienstverbanden), whereby employers refrain from formally terminating the employment contract after the statutory period of 104 weeks has expired, in order to avoid paying the transition allowance.

Dutch Senate passes bill introducing hourly-rate presumption of employment

On June 16, 2026, the Dutch Senate passed the bill introducing a legal presumption that a worker is employed under an employment contract based on the worker’s hourly rate. The measure, formerly part of the WVBAR legislative proposal, provides that workers earning less than EUR38 per hour will be presumed to be working under an employment contract.

The bill is intended to make it easier for lower-paid workers to invoke employee status. The intended effective date is January 1, 2027.

Dutch bill to ease reintegration obligations for SME employers in the second year of sick leave

A new Dutch bill aims to give small and medium-sized employers more flexibility when managing long-term sickness leave. In this context, small and medium-sized employers are employers with a total wage bill (loonsom) of up to and including 100 times the average wage base for social premiums (gemiddeld premieloon) per employee. In particular, the bill would provide earlier clarity on how long an employer must keep a sick employee’s original position available, allowing employers to make decisions about replacement sooner.

Under the proposal, small and medium-sized employers would be able, from the start of the second year of illness, to focus exclusively on reintegration through the so-called second track. That is, reintegration outside the employer’s organization. However, the employer could not unilaterally end the first track, which focuses on return to the employee’s own or other suitable work within the employer’s organization. As a starting point, the employer and employee would need to agree in writing to close the first track. The employee would then have a reflection period of 14 days.

If the parties cannot reach agreement and the employer nevertheless wants to close the first track, the employer would need to request permission from the UWV no later than the 42nd week of sick leave. The UWV would assess whether the employee is incapacitated for work, whether the employer’s reintegration efforts during the first year of illness were sufficient, and whether there are opportunities for the employee to return under the first track within 13 weeks.

The bill also includes additional employee protections. In particular, a new prohibition on termination would apply where an employee fully recovers during the second year of illness. That prohibition would remain in place until 104 weeks after the first day of illness. At the same time, the bill would introduce a new ground for termination for situations in which the first track has been closed after one year. Small and medium-sized employers could rely on this ground both while the employee remains sick and after the employee has fully recovered. For medium-sized employers, the UWV would also assess whether reassignment opportunities exist before termination is permitted.

The bill was submitted to the House of Representatives on April 9, 2026. Once the bill has been passed by the House of Representatives, it will need to be considered by the Senate. The intended effective date is January 1, 2030.

Reporting obligation for work-related mobility: threshold raised from 100 to 250 employees

Employers with 100 or fewer employees are already exempt from reporting CO₂ emissions from business travel and commuting. With retroactive effect from January 1, 2026, this threshold will be raised to 250 employees. The government aims to reduce the administrative burden on SMEs with this change.

Internet consultations

In our continuous effort to keep you informed on legislative developments, we wish to highlight the current consultation phase for upcoming legislation. This phase is an important step in the legislative process, allowing stakeholders to review and comment on proposed bills.

The most relevant draft bills that were opened for consultation:

• Act implementing the revised Directive on European Works Councils:This bill implements Directive (EU) 2025/2450 on the revision of the Directive on European Works Councils.
• Act implementing the Platform Work Directive: This bill implements Directive (EU) 2024/2831 on improving working conditions in platform work.
• Equal Opportunities in Recruitment and Selection Act: This bill aims to combat labor market discrimination in recruitment and selection.

Case law

We have made a selection of the most significant recent employment law cases for employers, mainly from the following courts: 

• The Supreme Court (Hoge Raad)
• The Court of Justice of the European Union (CJEU)

International Court of Justice: right to strike falls within the scope of freedom of association (ILO Convention No. 87)

At the request of the International Labour Organization (ILO), the International Court of Justice (ICJ) has issued an advisory opinion on the relationship between the right to strike and ILO Convention No. 87 concerning Freedom of Association and Protection of the Right to Organise.

The central question was whether the right to strike is protected under this Convention. Employer organizations had argued that the Convention contains no provision on the right to strike and that the drafting history does not indicate any intention to establish such a right. Workers' organizations, by contrast, maintained that the right to strike is inherent to the right to freedom of association.

The ICJ acknowledged that the Convention does not contain an explicit reference to the right to strike, but nevertheless held that strike action does fall within the protection afforded by the right to freedom of association. The Court noted, however, that its opinion does not address the precise content of the right to strike, nor the scope of or conditions for its exercise.

Practice note: While the advisory opinion is not legally binding, it carries significant authority and is likely to influence the interpretation of freedom of association protections in domestic and regional legal systems. Employers operating across multiple jurisdictions should be aware that this opinion may encourage trade unions and labor regulators to adopt a broader reading of Convention No. 87, potentially expanding the legal basis for protected industrial action. 

Reference: ICJ Advisory Opinion, May 21, 2026

CJEU: Does dismissal following a workplace relocation fall within the scope of the collective redundancies directive?

Egenergy, a power generator manufacturer with more than 15 employees, decided on September 6, 2021, to cease operations at its production site in Campania and transfer them to a site in Sardinia, more than 600 kilometers away and separated by the sea. When the affected employees refused to transfer to the new workplace, the company dismissed them for unauthorized absence. The employees challenged those dismissals before the Italian courts, arguing that the relocation effectively amounted to a collective redundancy and that Egenergy should have completed the information and consultation procedure under Directive 98/59/EC before terminating their contracts.

The Court emphasized that the concept of "redundancies" must not be given a narrow definition, since the Directive is intended to afford workers broad protection in the event of collective redundancies. According to the Court, a unilateral, detrimental and substantial change to an essential element of the employment contract may fall within that concept. The place of work can constitute such an essential element, particularly where the change has far-reaching consequences for the employee. In this case, the relocation was not temporary and involved a move from Campania to Sardinia, more than 600 kilometers apart and separated by the sea. Subject to verification by the national court, this appears to constitute a substantial change. The termination of the employment contract following the employee's refusal of that transfer therefore qualifies as a "redundancy" and must be taken into account when calculating the collective redundancy thresholds.

Practice note: Employers contemplating a significant workplace relocation should be aware that, even where individual employees are formally dismissed for refusing to report to a new site, those terminations may qualify as "redundancies" for the purposes of Directive 98/59/EC. This means that where the number of affected employees meets the relevant thresholds, the full information and consultation procedure with worker representatives must be completed. In practical terms, any planned relocation that materially alters the place of work, particularly over a long distance or across geographical barriers, and where it is not temporary, should be assessed against the collective redundancy rules.

Reference: CJEU, June 4, 2026, C-907/24, ECLI:EU:C:2026:460

Supreme Court: no increased burden of proof for the cumulative dismissal ground and no requirement that at least one ground be nearly fully met

In this employment dismissal case, the Supreme Court addressed the so-called cumulative ground for termination of employment (the i-ground). The employer had requested termination of the employment contract. The Court of Appeal granted the request on the basis of the i-ground and terminated the contract accordingly. The employee appealed to the Supreme Court, arguing that (i) a heightened burden of proof should apply when an employer invokes the i-ground, and (ii) a successful reliance on the i-ground requires that at least one of the underlying dismissal grounds be nearly fully met. The Supreme Court rejected both arguments and dismissed the appeal.

Practice note: This ruling confirms that employers invoking the cumulative i-ground do not face a heightened burden of proof and are not required to demonstrate that at least one of the underlying dismissal grounds is nearly fully met. In practice, the i-ground remains a somewhat flexible tool for employers in cases where individual dismissal grounds, taken on their own, fall short of the statutory threshold but, viewed in combination, justify termination. However, courts will still assess whether the combination of circumstances, taken together, reasonably warrants termination of the employment contract.

Reference: Supreme Court, April 10, 2026, ECLI:NL:HR:2026:594