Understanding Employment and Labour Law

Many people experience conflicts that require legal assistance but are often unsure how to categorise their issue or identify the relevant area of law. At Counselr, we aim to clarify each area of law and provide basic information to guide you.

As a rule of thumb, the first step to identifying the area of law is to consider who the conflict is with and what your relationship is with that party.

In this article, we explain the basics of employment law and labour law; in Dutch: arbeidsrecht. From a Dutch perspective, all three terms are the same.

Labour Law vs Employment Law vs Arbeidsrecht

• Labour Law typically focuses on the collective aspects of work, such as the rights of workers to unionise, collective bargaining, and participate in strikes. It governs the relationship between trade unions, employers, and employees.
• Employment Law is more centred on the individual relationship between the employer and the employee. It includes aspects such as employment contracts, workplace rights, safety, dismissal regulations, and discrimination.
• Arbeidsrecht in the Netherlands encompasses both employment and labour law. Dutch arbeidsrecht covers the individual rights and obligations of employees and employers, as well as collective agreements and union rights.

Therefore, the terms employent law and labour law are used interchangeably by Counselr.

Legal Framework

Employment and labour law in the Netherlands is a well-regulated framework that balances employee protections with employer responsibilities. It is shaped by both European Union directives and national legislation, creating a system that promotes fair working conditions, job security, and flexibility.

The Dutch employment landscape is primarily governed by the Dutch Civil Code (Burgerlijk Wetboek, Book 7) [1], which sets out the rights and obligations of employers and employees. This framework is supplemented by specific laws such as the Working Conditions Act (Arbeidsomstandighedenwet) [2], managing the rights and obligations of both employers and employees with regard to safe and healthy working, and the Work and Security Act (Wet werk en zekerheid) [3], which regulates termination procedures, flexible contracts, and unemployment benefits.

On a European level, key directives like the Working Time Directive (2003/88/EC) [4] and the Temporary Agency Work Directive (2008/104/EC) [5] are implemented into Dutch law, ensuring compliance with EU standards on working hours, rest periods, and protections for agency workers.

In the Netherlands, the legal framework is predominantly focused on the protection of the employee. Dutch employment law is built around the idea that there is an inherent imbalance of power between employers and employees. As a result, the law includes various protective measures for workers, some of which are explained in the following sections.

Key Employee Protections in Dutch Law:

1. Strict Dismissal Regulations:

Termination of employment can occur through mutual agreement, dismissal, or court proceedings. In some situations, permission for dismissal from the Employee Insurance Agency (UWV) [8] is required. Dutch law provides strong employee protections, requiring valid grounds for dismissal such as economic reasons or long-term incapacity for work. Since January 1, 2020, the rules for transition compensation (transitievergoeding) – not to be confused with severance payments – have changed: Every employee is now entitled to compensation- even if they have been employed for less than two years or if their contract was terminated during the probation period. There are no longer any special provisions for employees with more than ten years of service. [9]

Collective redundancies (employer releases at least 20 employees within 3 months in the same area of work) trigger additional obligations under the Collective Redundancy (Notification) Act (Wet melding collectief ontslag, WMCO) [10]. The employer must adhere to the following[11]:

• • The employer reports the collective dismissal to UWV
  • The employer consults with the unions about the dismissal. This only applies if they respond to the employer’s invitation on time.
  • The employer discusses the plans for the dismissal with the works council, if there is one.

2. Minimum Wage and Holiday Pay:

The Minimum Wage and Minimum Holiday Allowance Act (Wet minimumloon en minimumvakantiebijslag) sets statutory minimum wages [12]. Employees are also entitled to at least four times their weekly working hours in paid annual leave.

Parental leave, sick leave, and other types of special leave are regulated through the Work and Care Act (Wet arbeid en zorg) [13], ensuring employees have access to necessary time off for family and personal care.

3. Mandatory Sick Pay:

The Dutch Civil Code (Book 7 of the Dutch Civil Code) alongside the Wet Verbetering Poortwachter (Gatekeeper Improvement Act).[14] governs payment rules for sick employees. Employers are legally required to pay at least 70% of the employee’s salary for up to two years if they are sick as well as facilitate their reintegration.

Given the financial burden this rule imposes on employers, insurance options are available to cover salary payments for sick employees.

4. Working Conditions and Safety Regulations :

Health and safety obligations are overseen by the Netherlands Labour Authority (Nederlandse Arbeidsinspectie) [7], which monitors compliance with the Working Conditions Act. Employers must conduct risk assessments, provide safe workplaces, and implement measures to prevent physical and mental strain.

Working hours are regulated by the Working Hours Act (Arbeidstijdenwet),[6] which implements the EU’s Working Time Directive [4]. Standard working hours cannot exceed 60 hours per week, with an average of 48 hours. Employees are entitled to minimum daily and weekly rest periods, ensuring work-life balance and safety.

5. Fixed-term Contract Limitations:

Employment contracts in the Netherlands can be either fixed-term or indefinite-term. Since the introduction of the Work and Security Act in 2015, stricter rules apply to the renewal of temporary contracts to prevent excessive use of short-term arrangements. After three consecutive temporary contracts or a total duration of 36 months, the contract automatically converts into a permanent contract [3].

Enforcement and Institutions

Key institutions involved in employment regulation include:

• Ministry of Social Affairs and Employment (Ministerie van Sociale Zaken en Werkgelegenheid) [15]
• Netherlands Labour Authority (Nederlandse Arbeidsinspectie) [7]
• Employee Insurance Agency (UWV) [8]

Employees and employers can access official resources and submit complaints through government platforms such as Rijksoverheid and UWV.

Conclusion

Dutch employment and labour law provides comprehensive protections while maintaining flexibility for both employees and employers. Grounded in EU directives and national legislation, it safeguards fair working conditions, job security, and responsible termination practices, making the Netherlands a model for balanced labour regulation.

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Disclaimer: The information provided on this website is for general informational purposes only and is not legally binding. Although we strive for accuracy, the content may contain errors. If you notice any mistakes, please let us know by contacting us via the contact form located at the bottom of the page.

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References

[1] Government of the Netherlands, Dutch Civil Code (Burgerlijk Wetboek), Book 7 – Employment Law, accessed 04/26/25
[2] Government of the Netherlands, Working Conditions Act (Arbeidsomstandighedenwet), accessed 04/26/25
[3] Government of the Netherlands, Work and Security Act (Wet werk en zekerheid), accessed 04/26/25
[4] European Parliament, Directive 2003/88/EC (Working Time Directive), accessed 04/26/25
[5] European Parliament, Directive 2008/104/EC (Temporary Agency Work Directive), accessed 04/26/25
[6] Ministerie van Sociale Zaken en Werkgelegenheid, Working Hours Act (Arbeidstijdenwet), accessed 04/26/25
[7] Netherlands Labour Authority (Nederlandse Arbeidsinspectie), accessed 04/26/25
[8] Employee Insurance Agency (UWV),  Situations you need permission, accessed 04/26/25
[9] Mijnontslagvergoeding, My rights in the case of dismissal, accessed 04/26/25
[10] Government of the Netherlands, Collective Redundancy (Notification) Act (Wet melding collectief ontslag), accessed 04/26/25
[11] Employee Insurance Agency (UWV), Collectief antslag, accessed 04/26/25
[12] Government of the Netherlands, Minimum Wage and Minimum Holiday Allowance Act (Wet minimumloon en minimumvakantiebijslag), accessed 04/26/25
[13] Government of the Netherlands, Work and Care Act (Wet arbeid en zorg, WaZo), accessed 04/26/25
[14] Government of the Netherlands, Gatekeeper Improvement Act (Wet verbetering poortwachter), accessed 05/18/25
[15] Ministry of Social Affairs and Employment, accessed 04/26/25