We previously wrote about drawing up an employment contract. In this follow-up, we list some important clauses that can be included in an employment contract. We will discuss the probationary period as well as the penalty and non-competition clauses. It is important for employers to be familiar with the legal requirements before inserting the clauses, so that the contract is legally solid and disputes are avoided later on.
Probationary period
As an employer, you can agree on a probationary period with your employee if the employment contract lasts longer than six months. A probationary period is not legally required, but it is a very common clause in the Netherlands. The probationary period serves as an introductory period during which both the employer and the employee can terminate the employment contract immediately, without notice or giving reasons.
The probationary period must always be agreed in writing. The maximum duration of the probationary period depends on the type of contract:
– Permanent employment contract: maximum of two months;
– Fixed-term employment contract of more than six months but less than two years: maximum of one month;
– Fixed-term employment contract of two years or more: maximum of two months.
A probationary period longer than legally permitted is void.
Penalty clause
A penalty clause allows an employer to impose a financial penalty on an employee if they fail to comply with certain contractual obligations. Examples include a breach of a confidentiality clause or a violation of a non-competition clause. This clause must also be agreed in writing. The employment contract must include at least the following:
– The amount of the penalty;
– The purpose of the penalty;
– The specific rules whose violation will result in a penalty.
Furthermore, a penalty clause must meet the following requirements:
– The total amount of penalties that an employee may be required to pay per week may not exceed the wages for half a working day per week;
– The destination of the fine may not be for the personal benefit of the employer. The fine must be paid into a fund for a good cause.
The latter differs from compensation for damages, which does benefit the employer.
Please note: an employer cannot simultaneously collect a fine on the basis of a penalty clause and claim damages for attributable non-compliance. The employer must therefore choose.
Non-competition clause
A non-competition clause prohibits the employee from performing similar work for a competing employer or for themselves after termination of employment. This clause can be drawn up if:
– It has been agreed in writing;
– It is included in a permanent employment contract;
– The employee is of legal age.
In the case of a fixed-term employment contract, a non-competition clause is only permitted if the employer’s written justification shows that there are compelling business or service interests.
In some cases, the court may (partially) annul a non-competition clause:
– The court may annul the non-competition clause in a fixed-term employment contract in its entirety if it is not necessary due to compelling business or service interests;
– The court may annul the non-competition clause in whole or in part if it unfairly disadvantages the employee in relation to the employer’s interests to be protected.
How can Amice Advocaten help you?
Employment contracts form the basis of every employment relationship in the Netherlands. Do you want to be sure that your contracts are legally sound and in line with the interests of your organization? At Amice Advocaten, we are happy to advise you on all provisions.
Please do not hesitate to contact our office. You can reach us via e-mail at: info@amice-advocaten.nl or telephone: 030 2300 230.