After three consecutive fixed-term contracts, or once those contracts together have lasted longer than 36 months, a permanent contract arises by operation of law. That is set out in Article 7:668a of the Dutch Civil Code. A gap of more than six months breaks the chain.
Many employees start out on fixed-term contracts. The chain rule determines when a series of fixed-term contracts automatically becomes a permanent one. That gives employees more certainty and obliges employers to make clear choices. This article explains how the chain rule works, which exceptions exist, and what it means for you as an employee or employer.
What does the chain rule involve?
The chain rule ensures that a fixed-term contract is converted over time into a contract for an indefinite period. That happens in two cases:
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Where the total duration of consecutive fixed-term contracts exceeds a period of 36 months, gaps included (Article 7:668a(1)(a) of the Dutch Civil Code).
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Where more than three fixed-term contracts have followed one another with gaps of no more than six months (Article 7:668a(1)(b)).
Important: if there is a period of more than six months between contracts, the chain is broken. The count then starts again.
An example from practice
Suppose an employee receives three contracts of eight months each. Together that is 24 months, so the 36-month limit has not yet been exceeded. Even so, a fourth contract becomes one for an indefinite period by operation of law, because it exceeds the limit of three contracts. Both limits therefore apply alongside each other: whichever is reached first counts.
Successive employership
The chain rule also applies to successive employership. This means that where an employee does virtually the same work for a new employer as for the previous one, the period with the first employer counts.
For example: an agency worker who first works through an agency and then enters the client’s employment directly. The agency period then counts towards the chain.
Exceptions to the chain rule
There are situations in which the chain rule does not apply, or in which different rules are possible:
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A long contract with a short extension
Where an employment contract lasts longer than 24 months and is then extended by a contract of no more than three months, the chain rule does not come into play. -
Departures in the collective agreement
A collective agreement can provide that:-
the maximum duration of the chain is extended to 48 months;
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the maximum number of contracts is raised to 6.
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The agency sector
For agency workers, the chain rule only applies once they have worked 26 weeks. That period can be extended by collective agreement to a maximum of 78 weeks.
The chain rule for employees of state pension age
Different rules apply to employees who have reached state pension age. Instead of the standard limit, an employer can offer such staff a maximum of six fixed-term contracts spread over a period of four years. Only once that limit is exceeded does permanent employment arise automatically.
This exception makes it more attractive for employers to deploy employees of state pension age flexibly, while those employees still have clarity about their legal position.
The chain rule for vocational students and young pupils
The chain rule does not apply to everyone. It is excluded for students working under a combined work-and-study agreement in the vocational training pathway. It also does not apply to your side job if you are a pupil under 18 working a maximum of twelve hours a week. Your contracts then do not count towards the chain rule’s maximum.
Why does the chain rule matter?
For employees it means protection: after a certain period they can claim a permanent contract. For employers it offers clarity and prevents fixed-term contracts from being continued indefinitely.
Choosing the right moment for a conversation about a permanent contract
Many employees wonder when it is sensible to raise a permanent contract with their employer. Timing is crucial. Choose a moment when your employer is not under heavy pressure: after completing a successful project, at an appraisal, or when you have recently received positive feedback. These are natural occasions on which your commitment and value to the organisation are already in view.
Also keep an eye on how your current contract is running. Start the conversation well before the end date, so that both sides have enough time to discuss the options. Choosing the moment deliberately improves your chances of a constructive and successful conversation.
How can you prepare well for a conversation about getting a permanent contract?
A good start is half the work, certainly if you want to negotiate a permanent contract. Before you speak to your manager, it pays to pause on the following points:
- Map out your achievements: Note recent successes, positive feedback and targets met. That gives your conversation extra weight.
- Know your rights and the rules: A little knowledge of the chain rule and employment legislation (as set out in the Dutch Civil Code) helps you stand your ground.
- Rehearse the conversation: Try to formulate in advance what you want to say and which arguments you want to put. You can practise with someone, or even make a short crib sheet.
- Choose the right moment: A conversation usually goes more smoothly when your manager has time and attention for you. So schedule a suitable moment, after a well-completed assignment or an appraisal for instance.
With this preparation you improve your chances of a constructive conversation and can put your request with confidence.
What tips are there for persuading your employer to offer you a permanent contract?
Good preparation is half the work if you want to persuade your employer. Consider the following:
- Make clear in advance what you have achieved within the company. Set out your performance, successes and value to the team clearly.
- Choose a suitable moment for the conversation, after successfully completing a project or at an appraisal for instance.
- Use positive, open communication: show that you are motivated to commit to the organisation for the longer term, and emphasise your commitment.
- Do not be afraid to give concrete examples – say where you made the difference or what you contributed beyond expectations.
That way you show that a permanent contract is a logical next step not only for you but for the company too.
Legal advice on the chain rule
The chain rule looks straightforward, but in practice it often raises questions and disputes: with successive employership, for instance, or where employer and employee disagree about the duration of the contract.
Our employment lawyers can help you with:
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checking whether a contract has automatically become a permanent one;
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calculating the correct period and the number of contracts;
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resolving disputes with employers or employees.
You can also come to us for:
- answers to all your questions about employment contracts and terms of employment;
- personal advice on work, income and career;
- support in going through your contract before you sign it, so you know exactly where you stand;
- advice on financial planning and help with money matters, should that be needed;
- tips and information about possible discounts on insurance, energy or groceries, for example.
That way we make sure you continue or conclude your working relationship well prepared and with confidence.
Useful conversation techniques for asking about a permanent contract
Would you like to take the step to a permanent contract? Then it helps to be well prepared for the conversation with your employer. The techniques below improve the chance that your request comes across clearly and convincingly:
- Prepare your arguments. Gather facts: your performance, positive feedback, and points showing that you are a valuable member of staff.
- Be concrete and clear. State clearly why you want a permanent contract and what your expectations are. Avoid vague wording and speak in the first person.
- Stay professional and calm. Put your request in a friendly, respectful way, even if the conversation feels daunting.
- Listen actively. Show understanding for your employer’s position. Listen carefully, ask questions and, if useful, repeat the gist of what is said so that you understand each other properly.
- Show initiative. Ask what you can still work on, or which conditions you must meet to qualify for a permanent contract.
- Keep it businesslike. Focus on the substance and the facts, not on emotions.
With these techniques you make sure your wish for a permanent contract is put across convincingly.
Conclusion
The chain rule determines when fixed-term contracts automatically become permanent. That can happen as soon as the contracts together last longer than 36 months, or as soon as you receive a fourth consecutive contract. There are exceptions and special situations, however, particularly with successive employership or in the agency sector. Unsure whether the chain rule applies in your situation? Feel free to contact us for a no-obligation consultation.
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Frequently asked questions
When do I automatically get a permanent contract under the chain rule?
You automatically get a permanent contract if you have more than three consecutive fixed-term contracts, or if their total duration exceeds 36 months. The period under successive employership counts too, unless there is a break of more than six months between contracts.
What happens if I have a break of more than six months between two contracts?
With a break of more than six months the chain is broken, and the count starts again as soon as you receive a new fixed-term contract. A long break therefore does not automatically take you past the chain’s maximum.
Are there exceptions to the standard chain rule?
Yes. By collective agreement the 36-month period can be extended to a maximum of 48 months and the limit of three contracts raised to a maximum of six (Article 7:668a(5)). For employees who have reached state pension age those same wider limits apply by operation of law (paragraph 12). The law also provides exceptions for the vocational training pathway (paragraph 10) and for employees under eighteen with a small contract (paragraph 11).
As an employee of state pension age, how long can I be given fixed-term contracts?
For an employee who has reached state pension age, the 36-month period is extended to a maximum of 48 months and the limit of three contracts raised to a maximum of six (Article 7:668a(12)). Only contracts entered into after reaching state pension age count. Once that limit is exceeded, permanent employment arises by operation of law.
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