A foreign company employing someone who habitually works in the Netherlands may have to comply with Dutch employment protections even when the employment contract chooses another country’s law. Incorporating a Dutch subsidiary is not the only event that can create local employment obligations. Before hiring, establish who the employer is, where the employee works, which mandatory rules apply and who will manage payroll, absence and termination. [S09]
Dutch employment law for foreign employers is therefore more than a contract-translation exercise. A workable setup connects the employment agreement with the actual management of the employee. This guide covers direct recruitment, temporary contracts, collective agreements, illness, dismissal and common cross-border mistakes. It is written for employers and business owners rather than employees seeking personal advice.
Which entity is the employer?
Choose the employing entity deliberately. It may be an overseas company, a Dutch subsidiary or another organisation under a properly assessed arrangement. The employment contract, payroll records, managerial instructions and group documentation should not give contradictory answers.
For a corporate group, record whether the Dutch manager can make employment decisions on behalf of the foreign employer. Clarify who approves salary changes, disciplinary measures, remote working and dismissal. A local manager should not promise terms that head office later denies having authorised.
Employment, tax and social-security questions are related but distinct. Ask specialists to assess payroll registration, social insurance and any relevant cross-border arrangements. Do not assume that paying salary from a foreign bank account means only foreign rules apply.
Likewise, a Dutch office address does not answer every question about the employee’s habitual place of work. Look at the real arrangement: where work is organised and performed, whether a foreign assignment is temporary, and whether a different country has a closer connection under the applicable rules. [S09]
Can the employment contract choose foreign law?
A choice-of-law clause can be relevant, but under the Rome I rules it cannot deprive an employee of mandatory protection under the law that would apply without that choice. The factual place of work and the relevant connecting factors matter. A standard Turkish, British or American contract should therefore be reviewed before use for a Dutch-based role. [S09]
Avoid using “at-will employment” as though it automatically determines the Dutch position. The available grounds and procedures for ending employment need their own assessment. A contract clause and a managerial instruction cannot substitute for a legally required dismissal route.
Court jurisdiction is another separate issue. Employment disputes have protective jurisdiction rules and should not be handled as though they were an ordinary supplier contract. A clause directing every dispute to the employer’s home-country court may not have the intended effect. [S11]
Use language that the employee understands. Where an English or Turkish translation is provided, ensure it matches the operative agreement. Do not allow a translation to change salary, working hours, probation, notice periods or post-employment restrictions.
Check the CAO and pension position before setting the salary
A collective labour agreement, known as a CAO, may affect pay scales, allowances, working hours, leave, sickness pay and other terms. Applicability can arise through different mechanisms, including a generally binding declaration. The company’s foreign ownership or absence of membership in an employers’ association does not by itself resolve the question. [S24]
Investigate the actual activities of the business and the relevant scope provisions. A business description chosen for convenience should not replace analysis of what the company and employees actually do. Where activities overlap sectors, obtain a reasoned conclusion rather than assuming the cheapest CAO applies.
Pension participation also requires a separate scope assessment. Do not assume that no pension obligation exists because the individual contract is silent. Ask the payroll or pension specialist to document the conclusion and the information on which it is based.
Build the offer around the applicable package, not only a gross monthly figure. Explain working hours, holiday allowance, allowances, pension and leave clearly. An attractive headline salary can still produce disputes if the parties understand the total package differently.
Fixed-term or permanent employment?
A fixed-term contract can fit a temporary need, but it does not make Dutch employment rules disappear. Under the general chain rule, more than three successive temporary contracts, or successive temporary contracts exceeding a total of three years, can in principle lead to indefinite employment, with rules about interruptions, successive employers and exceptions. A further contract or exceeding the permitted period may produce indefinite employment. Check the applicable CAO and factual history. [S25]
Ask whether the employee previously performed substantially the same work through an agency or another group entity. A change of legal employer does not always reset the relevant history. Keep a contract register with start dates, end dates, breaks and preceding arrangements.
For early termination of a fixed-term agreement, examine whether an interim termination clause exists and whether the required route and notice apply. A fixed end date should not be confused with a free right for the employer to end the contract at any earlier moment.
The choice should reflect the role and business plan. If the business needs a continuing position, repeated temporary contracts may create administrative risk without solving the underlying employment issue.
Probation and the duty to notify non-renewal
A probation clause must meet legal requirements. A contract of six months or less cannot contain a valid probation period. For longer temporary contracts below two years, the usual maximum is one month, subject to permitted CAO deviations; for indefinite contracts and contracts of at least two years, the maximum is generally two months. Written agreement and equal duration for both parties are important. [S26]
Do not insert a fresh probation period simply because an existing worker changes from an agency arrangement to direct employment or receives a new contract. Successive employment and genuinely different duties need to be assessed. An invalid probation clause can make an attempted immediate termination much more serious than expected.
For qualifying fixed-term contracts of at least six months, the employer must inform the employee in writing at least one month before the end whether the agreement will continue and, if so, on what terms. This notification obligation, or aanzegplicht, is different from giving notice to terminate an indefinite contract. Exceptions and compensation rules should be checked. [S27]
Put the notification date in a central calendar when the contract is signed. Assign a named decision-maker and a backup. A reminder in one manager’s personal calendar is not a reliable company process.
Working hours, leave and mandatory information
The agreement should describe the role, working location, pay, hours, leave and other essential terms, while the employer must meet the applicable written-information duties. Do not leave core terms scattered across an offer email, foreign handbook and payroll assumptions. [S25]
Agree how overtime, variable hours, travel and availability are managed, subject to applicable law and the CAO. A clause saying that “all extra work is included” should not be accepted as a complete answer without assessing the actual role and legal framework.
For hybrid work, establish expectations about workplace, equipment, expenses, security and changes of country. An employee working temporarily from another country can create questions beyond ordinary homeworking. Require prior approval and a proper assessment rather than treating every overseas remote-working request as administratively identical.
Maintain accurate records and make the employee’s applicable policies accessible. When head office updates a global handbook, check whether the change can lawfully be implemented locally and whether consultation or agreement is required.
Sickness: budget for duties as well as wages
Under the general Dutch regime, employers continue paying at least 70% of wages during sickness for up to 104 weeks, within the relevant legal limits and exceptions. In the first year, a minimum-wage floor generally applies. A CAO or employment agreement may require more. Fixed-term expiry, state-pension age and particular benefit situations require separate treatment. [S28]
Payment is only part of the employer’s responsibility. The employer and employee must work on reintegration, supported by the occupational health service or company doctor. Poor reintegration efforts can lead to an extended wage-payment obligation. A foreign head office should not wait until the end of two years before asking what documentation is required. [S29]
Separate medical assessment from management. Managers need information about functional possibilities and work arrangements, not unrestricted access to a diagnosis or medical file. Use the appropriate occupational health process and handle personal information carefully.
Create an absence workflow before the first employee starts. Record who contacts the occupational health service, who follows up on the plan, who monitors statutory milestones and who approves suitable work. A conflict about performance and a sickness report may coexist, but one should not automatically be used to dismiss the other.
Dismissal is a process, not just a notice letter
The appropriate dismissal route depends on the ground and circumstances. Economic dismissal and long-term incapacity generally involve UWV, while personal grounds such as a serious employment conflict or underperformance generally involve the court. Mutual termination is another route. Special categories and exceptions need separate advice. [S30]
Build an accurate file before deciding on dismissal. For performance concerns, document expectations, feedback, support and a meaningful opportunity to improve where required. A list prepared after the decision to dismiss is not equivalent to a genuine performance process.
Consider redeployment obligations, dismissal prohibitions, consultation requirements and the applicable notice period. A restructuring decision made at group level does not automatically satisfy the local requirements. For larger reorganisations, additional collective dismissal and employee-representation rules may apply.
Summary dismissal requires particular urgency and legal care. Do not treat it as a convenient response to an ordinary disagreement or a substitute for a weak dismissal file. Obtain immediate advice about the facts, investigation, timing and communication before acting.
Settlement agreements and transition payments
A settlement agreement should accurately record mutual termination and its financial and practical consequences. Address the end date, salary, holiday balance, any agreed severance, return of property, confidentiality and continuing restrictions. The employee generally has a statutory cooling-off period of 14 days, extended to 21 days if the employer fails to provide the required information about that right. [S31]
Do not pressure an employee to sign a document they cannot understand or promise a benefit outcome that depends on UWV. Encourage an opportunity for independent advice. Special care is needed where the employee is ill or dismissal protection applies.
A statutory transition payment is generally relevant to employer-initiated dismissal or non-renewal from the start of employment, subject to exceptions. In a mutual termination agreement, the parties negotiate the financial arrangement; it should not be described as though every settlement automatically triggers the same statutory payment mechanism. [S32]
Obtain a complete calculation of the final settlement. A headline severance amount does not necessarily include outstanding salary, holiday allowance, accrued leave, bonus questions or other contractual entitlements.
Non-compete and non-solicitation clauses
Post-employment restrictions should protect a genuine business interest and be drafted for the actual role. Written agreement and the employee’s age matter. A non-compete clause in a fixed-term contract requires specific written justification based on substantial business or service interests. A non-solicitation clause is not a universal way around those rules. [S33]
Avoid restrictions covering every competitor worldwide simply because the employer operates internationally. Identify the information, relationships or activities that create the risk and consider a proportionate duration and scope. Check whether the role has changed since the restriction was agreed.
The proposed modernisation of Dutch non-compete rules should not be presented as already effective law. The official information consulted for this guide still identifies an unknown effective date. Review the current position before signing or enforcing a restriction, especially where a contract will operate for several years. [S34]
Confidentiality, intellectual-property arrangements and sensible access controls should also be considered. A broad restrictive covenant is not a replacement for day-to-day information security.
Freelancers, agencies and posted workers
Calling a worker a freelancer does not settle their legal status. Review how work is actually performed, including instruction, integration into the organisation, personal performance, remuneration and entrepreneurial circumstances. Employment, payroll-tax and social-security assessments can overlap but require careful treatment. [S35]
Do not use an independent-contractor agreement merely to avoid sickness or dismissal obligations while managing the person as an ordinary employee. A genuine outsourced project should have an operating model consistent with the agreement.
For temporary cross-border assignments, assess work authorisation, applicable employment conditions, social security and notification separately. The Dutch posted-worker notification framework applies to relevant employers from the EEA and Switzerland; it should not simply be copied as a complete answer for staff sent directly from Türkiye. Non-EEA work-permit rules and exceptions require their own assessment. [S36][S37]
Using an intermediary does not eliminate the need for checks. Establish which party applies for permits, provides documents and monitors compliance, and obtain specialist immigration advice where needed.
A hypothetical example: the first Dutch sales manager
A foreign supplier recruits a sales manager who will work from Rotterdam and visit customers across the Netherlands. Head office proposes its standard six-month contract with a two-month probation period, foreign-law clause and worldwide non-compete restriction.
A proper review would not simply translate that document. It would examine the employer’s identity, habitual place of work, mandatory protections, CAO and pension scope. It would flag the probation problem, assess whether any fixed-term restriction can be justified and organise payroll and sickness support.
The company should also clarify authority to sign customer contracts, access to pricing information and ownership of customer records. Employment and commercial risk meet in the same role. The example illustrates questions to assess; it is not a conclusion that every international sales role has identical legal treatment.
What to prepare before instructing an employment lawyer
Provide the proposed employing entity, role description, expected work locations and previous employment history. Include the draft contract, relevant handbook, salary package, working-hours arrangement and any agency or contractor agreement. Explain whether the role is new or replaces someone.
For an existing dispute, supply the full chronology, correspondence, performance records, sickness information limited to what management may lawfully process, and upcoming deadlines. Mention any pregnancy, representative role or other circumstance potentially affecting dismissal protection. Do not omit facts because they complicate the preferred outcome.
Ask for a scoped assessment separating urgent action from structural improvements. A company with one immediate dispute may also need a better contract register, absence workflow and local approval process to prevent repetition.
Frequently asked questions
Must a foreign employer always establish a Dutch BV?
Not necessarily. Employment, registration, tax and social-security obligations can arise without a Dutch subsidiary. The correct structure depends on the activities and risks and should be assessed across the relevant disciplines.
Can foreign law exclude Dutch employee protection?
Not automatically. The Rome I rules preserve mandatory protection under the law that would apply without the choice. The actual employment relationship and work location must be assessed. [S09]
Can I put probation in a six-month contract?
No valid probation period can be agreed for a contract of six months or less under the ordinary Dutch rules. Longer contracts have their own limits and conditions. [S26]
Does a sick employee always remain on payroll for two years?
The general regime involves up to 104 weeks of continued wage payment, but contract expiry and specific exceptions matter. Reintegration failures can also extend obligations. Review the actual situation rather than applying a single rule mechanically. [S28][S29]
Is a freelancer agreement sufficient to avoid employment law?
No. The label does not replace an assessment of the actual working relationship. The agreement and day-to-day practice must be examined together. [S35]
Can we communicate with an adviser in English or Turkish?
Explain your preferred language when contacting Arslan Advocaten and supply the original documents as well as any translations. The relevant Dutch rules still need to be applied, even when advice and negotiations take place in another language.
Arrange local employment support before problems arise
Discuss your Dutch personnel arrangements with Arslan Advocaten. Coordinate employment advice with payroll, pension, occupational health and any immigration specialist. For wider setup questions, see starting a business in the Netherlands; for related management conflicts, see shareholder disputes.
Sources and legal references
- S09 — Rome I Regulation, especially Article 8 · EUR-Lex
- S11 — Brussels I bis Regulation · EUR-Lex
- S24 — Collective labour agreement (CAO) · Business.gov.nl
- S25 — Employment contracts · Business.gov.nl
- S26 — Hoelang duurt een proeftijd? · Rijksoverheid
- S27 — Notice for fixed-term employment contracts · Business.gov.nl
- S28 — Sick pay · Business.gov.nl
- S29 — Dismissing a sick employee · Business.gov.nl
- S30 — Dismissal procedures · Business.gov.nl
- S31 — Drawing up a settlement agreement · Business.gov.nl
- S32 — Transition payment · Business.gov.nl
- S33 — Non-compete clause · Business.gov.nl
- S34 — Rules on non-compete clauses tightened: proposal · Business.gov.nl
- S35 — Wanneer is sprake van loondienst? · Belastingdienst
- S36 — Duty to report for foreign employers · Netherlands Labour Authority
- S37 — What permits do foreign workers need? · Government.nl
